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BookkeeBookkeepingping is a function of accounting.  It refers to the actual entry of transactions into the books of record for a business.  This section of the website introduces bookkeeping and teaches proper entry methods related to the various economic activities in small business.  There are a series of lessons separated into three groups.

The first group consists of  fundamental lessons that introduce bookkeeping and explain the basic concept of debits and credits and how a chart of accounts works.

The second group of lessons go into the separate functions of regular business entries and explains how these are entered into the books of records.  This includes entering bills, creating invoices, running a payroll, reconciling the bank account and creating some basic reports for management.

The final group of lessons are for more advanced subjects and include why general journal entries exists; how to reconcile more advanced accounts and how to enter purchases of fixed assets and corresponding long term debt.

  • Basic Bookkeeping – Lessons 1 – 28 cover the core fundamentals of types of accounts and their arrangement.
  • Regular Activity – Lessons 29 – 67; these lessons explain daily activities of bookkeepers and the respective entries.
  • Advanced Bookkeeping – Lessons 68 – 125 get into closing procedures, special accounts; rules and tax accounting.

Throughout each article are links to other articles on the site that support the lesson.

These lessons are free and if you find them helpful, consider donating to the site via any of the lesson pages.  On the right side of the page is a donation button and I have increments of $5, $7 and $10 as options.  In addition, if you need help with more advanced industry specific issues; go to ‘My Services’ in the footer and contact me.

Thank you in advance and if you have a specific question, feel free to send me an e-mail to dave (use the standard ‘AT’ symbol)  I generally respond within three days and often the answer is in the form of an article.  So the more detailed you are with your question the more descriptive I am with my response. 


  • Bookkeeping – Account Types (Lesson 1)

    Account TypesTo fully grasp the concept of accounting a bookkeeper must accept that there are six (6) different types of accounts. All the reports, ledgers, journals and entries revolve around these six types of accounts. Bookkeeping is the function of entering data based on the economic transaction into the respective type of account.
  • Bookkeeping – Dual Entry System (Lesson 2)

    Dual EntryIn accounting the term dual entry is used often. Other names include Double Entry and Offsetting Entry.  It refers to the process of entering an economic transaction as an equation. Remember in math an equation refers to a two sided mathematical statement. Examples include 4= 2 X 2 or more complex equations such as E= MC ...
  • Bookkeeping – Ledgers and Journals (Lesson 3)

    Ledgers and JournalsMany bookkeepers are confused about how an entry is made to the books of record for a business.  Well to more easily understand this, the bookkeeper needs to understand the difference between a journal and a ledger as they pertain to bookkeeping.
  • Bookkeeping – Debits and Credits in Asset Accounts (Lesson 4)

    Debits and credits are two words that are the most recognized terms synonymous to bookkeeping and accounting.  I have read over 30 different articles as to how other authors define debits and credits with bookkeeping.  Several authors try to get the reader to visualize the terms as the left side and the right side of ...
  • Bookkeeping – Debits and Credits in Liability Accounts (Lesson 5)

    Liability AccountsTo truly be successful in business you will need others.  For most businesses this refers to employees and suppliers. Whenever a business commits to purchase time or product and that employee delivers their time or the supplier delivers the product, you owe them money.  This is a liability.
  • Bookkeeping – Debits and Credits in Revenue Accounts (Lesson 6)

    Revenue AccountsRevenue accounts are the most fun to watch as a bookkeeper.  Revenue is the lifeblood for success.  Without revenue, the company is doomed to go bankrupt.  After all, you are in business to sell your services or products and the revenue accounts are where we get to see the results of activity. 
  • Bookkeeping – Debits and Credits in Cost of Sales Accounts (Lesson 7)

    Cost of Sales AccountsThe Purchases Journal keeps track of the entries related to the cost of sales (cost of goods sold) accounts.  As with all journals, the entries are in chronological order by date and identify both the debit and credit sides of the equation.  In this case, cost of sales is customarily recorded via debits.
  • Bookkeeping – Debits and Credits in Expense Accounts (Lesson 8)

    Expense AccountsExpense types of accounts are the easiest to understand in bookkeeping.  In general only debits are entered in expense types of accounts.
  • Bookkeeping – Financial Statement Relationships (Lesson 9)

    The financial reports illustrate changes in the businesses’ financial condition over time.  Just as man has evolved, a business grows over time.  Naturally most small businesses want to be highly successful and the reports are issued to evaluate change.
  • Bookkeeping – Debits and Credits in Equity Accounts (Lesson 10)

    Equity AccountsThe equity section of the balance sheet identifies the approximate dollar value of net worth accrued to the owners/investors.  Equity type accounts can have both credit and debit balances.  By far the most preferred is a credit value.  Debit values does not mean that something is wrong, actually it can be a great sign of ...
  • Bookkeeping – Chart of Accounts (Lesson 11)

    Chart of AccountsTo properly create a set of ledgers there must be a list of accounts.  This list is referred to as the ‘Chart of Accounts’ or for shorthand – COA. 
  • Bookkeeping – Contra Accounts (Lesson 12)

    Contra accounts are utilized to help present clearer information to readers of financial reports.  They are used to improve the decision model. This lesson provides several different methods to exercise the advantages of this accounting ledger.
  • Bookkeeping – Debits and Credits with Parenthesis on the Balance Sheet (Lesson 13)

    Contra information is always reported in parenthesis. Well, other information in the two primary financial statements is also reported using parenthesis. This lesson explains parenthesis in balance sheet accounts.
  • Bookkeeping – Debits and Credits in Parenthesis with the Profit and Loss Statement (Lesson 14)

    Both contra and atypical values are reported with parenthesis.  The same presentation format is used when reporting contra and atypical values on the profit and loss statement (income statement).
  • Bookkeeping – Complex Entries (Lesson 15)

    Complex EntryMany bookkeepers are initially misinformed about the dual entry accounting system. They think that based on the wording that accounting entries have only two lines of information, one line for a debit and a second line for a credit. What the words dual entry mean is that debits must equal credits.
  • Bookkeeping – Debits and Credits with the Trial Balance (Lesson 16)

    The primary report used by accountants is the trial balance. It is the job of the bookkeeper to make sure that it is in balance and that there are no abnormal values within the respective types of accounts. This lesson sums up the prior 15 lessons and illustrates the trial balance with a condensed version ...
  • Bookkeeping – Parent–Child Accounts (Lesson 17)

    Parent-Child Accounts (Lesson 17)When one account is fed information from several sources based on function or location, this account is referred to as a ‘Parent’ account.  The sub accounts are called ‘Child’ accounts. 
  • Bookkeeping – Chart of Accounts Using the Numbering System (Lesson 18)

    Chart of AccountsUp to this point in this series about bookkeeping I’ve only mentioned accounts (ledgers) by name.  To speed up the process of entering information accountants converted names to numbers.   This made it easier to enter information in the original journals. Instead of long hand written words for the particular ledger, you simply entered a ...
  • Bookkeeping – Other Expenses and Revenue (Lesson 19)

    Other Expenses and RevenueIn accounting sometimes an extraordinary event occurs.  When this happens the associated revenue and expense is recorded in the expense type of accounts.  There are two different methods used to record this transaction – gross or net.
  • Bookkeeping – Proper Balance Sheet Presentation (Lesson 20)

    Balance Sheet PresentationThe balance sheet serves as an historical report.  It identifies the accumulated change in value since inception.  The balance sheet is organized into two halves and both sides must be equal in value.  In addition, the balance sheet is a snapshot of the financial condition at a single moment in time along the lifetime timeline ...
  • Bookkeeping – Proper Income Statement Presentation (Lesson 21)

    Basis for Tax PurposesThe income statement presents information over a period of time.  This time period is referred to as an accounting cycle.  Most small businesses use a monthly cycle for regular reporting purposes and an annual cycle for reporting to outside creditors and the government.
  • Bookkeeping – Control Accounts (Lesson 22)

    Control AccountsControl accounts are used when there are multiple third parties interacting with the business in regards to similar function.  Control accounts reduce the workload for bookkeeping by using subsidiary accounts or schedules *.   The aggregated value is reported as one line of value on the financial report.
  • Bookkeeping – Schedules (Lesson 23)

    SchedulesIn accounting there are books (journals) and ledgers for source entry of information.  A trial balance is used to monitor the types of accounts.  With the use of parent-child accounts and control accounts bookkeepers can generate a wide array of reports.  Unfortunately this still lacks the breath of supporting information needed.  So the profession uses ...
  • Bookkeeping – The Accounting Equation (Lesson 24)

    Accounting EquationThe accounting equation is a simple formula used frequently in business.   The formula is: Assets = Liabilities plus Equity OR Equity = Assets minus Liabilities.
  • Bookkeeping – Cash or Accrual (Lesson 25)

    Cash or AccrualGenerally Accepted Accounting Principles (GAAP) advocates using the accrual basis of accounting over cash basis.  The difference between the two methods is important to understand as a bookkeeper.
  • Bookkeeping – Various Terms (Lesson 26)

    Sales Via Debit and Credit CardsIn the previous 25 lessons I covered a lot of different terms and this lesson is merely a summary of the various terms a bookkeeper encounters.
  • Bookkeeping with QuickBooks (Lesson 27)

    QuickBooksThere are multiple positive benefits of QuickBooks for the business and directly for the bookkeeper too.   In addition many of the various issues covered in Lessons One through Twenty-Five  are distinguishable in the features offered in QuickBooks.
  • Bookkeeping – You are a Bookkeeper Now (Lesson 28)

    There really is no undergraduate degree program for bookkeeping.  So nobody has a college diploma from an accredited institution for bookkeeping; accounting yes, bookkeeping no.  There are some programs in community colleges.  They teach basic accounting principles, dual entry, payroll and lightly touch on the chart of accounts.


  • Bookkeeping – Accounting Cycles (Lesson 29)

    Economic CyclesThe bookkeeping cycle is like a huge giant clock with several dozen gears from a multiple cog gear rotating the most frequently turning cog cascading into the one large gear that once turned changes the timer one year forward.  The bookkeeper’s job is to make all the gears click and keep the system lubricated.  At ...
  • Bookkeeping – Payroll Structure (Lesson 30)

    Payroll StructureEvery bookkeeper needs to understand how to process a payroll. This is one of the many regular tasks in the bookkeeping cycle.  In this lesson I’m going to illustrate a payroll structure as it pertains to the chart of accounts. 
  • Bookkeeping – A Simple Payroll (Lesson 31)

    A Simple PayrollIn Lesson 30 I explained the payroll account structure using parent-child accounts.  This lesson is a part of the daily operations section of bookkeeping illustrating an actual payroll entry.  If you haven’t done so yet, please read: Payroll – An Introduction.  T
  • Bookkeeping – Payroll Cycles (Lesson 32)

    Similar to the bookkeeping cycle, the payroll cycle has many frequent activities, fewer incremental requirements and one important end of the year report.  This lesson explains these respective cycles and how they tie together for the final year end report. 
  • Bookkeeping – Payroll Compliance and Documentation (Lesson 33)

    Payroll ComplianceThe key to success with payroll accounting is properly documenting all aspects of payroll thus complying with the various legal requirements.
  • Bookkeeping – Quarterly and Annual Payroll Reports (Lesson 34)

    Payroll ReportsFederal and state compliance requires the filing of several different reports by certain deadlines.  In this lesson I explain the various reports, filing deadlines and best practices to comply with the law.  I’ll explain the quarterly set of reports first then the respective annual requirements.
  • Bookkeeping – Employee Benefits (Lesson 35)

    One of the best parts of being a bookkeeper is seeing employees smile when they utilize employee benefits.  There are a multitude of different employee benefits out there including: 1) Health Insurance, 2) Retirement, 3) Life Insurance, 4) Dental Care, 5) Vision Care, 6) Cancer Insurance, 7) Disability Insurance and 8) Child Care.
  • Bookkeeping – Tracking Invoices (Lesson 36)

    Tracking InvoicesEvery small business should track their sales in order to evaluate performance, opportunity and trends.  In a good system sales will identify date and time of purchase; customer’s name and demographic information; items purchased with quantity and dollar values and finally, methods of payment. 
  • Bookkeeping – Accounts Receivable Management (Lesson 37)

    Accounts Receivable ManagementIn my mind accounts receivable management is the highest priority duty of a bookkeeper.  Cash is the lifeblood of small business.  Most small businesses are thinly capitalized and depend solely on collecting cash to remain solvent.  Collection of money is a process, if done daily the bookkeeper can maximize the efficiency of collecting money for ...
  • Bookkeeping – Sales Via Debit and Credit Cards (Lesson 38)

    Sales Via Debit and Credit CardsHistorically the only two forms of payment were either cash or check.  Then credit card payments became very popular in the eighties and today the preferred method is debit.  Debit payments are an instaneous removal of value from the customer’s account and suspended by the banking system until deposited into the business checking account. 
  • Bookkeeping – Tracking Returns and Allowances (Lesson 39)

    Returns and AllowancesNot every customer is satisfied with the product they purchase. The old saying of ‘You can’t please everyone all the time’ is true. This is reality and business management must accept this basic principle.  What is important is the trend involved with returns.  If they continue to increase from one period to the next, something ...
  • Bookkeeping – Tracking Sales Tax (Lesson 40)

    Sales TaxMany businesses especially retail have to collect sales tax as a function of their legal mandate from state governments.  In effect the business is a collection agent for the state.  If properly set up, this collection process is automated using modern retail accounting software. 
  • Bookkeeping – Tracking Purchases (Lesson 41)

    PurchasesIn business purchases describes the process of acquiring the necessary goods and materials for operations.  Many novice business individuals believe the term is strictly limited to those materials purchased for resale.  In reality it is much broader in scope and encompasses all forms of expenses too.  When a company buys insurance, it is making a ...
  • Bookkeeping – Purchases Via Credit Cards (Lesson 42)

    Purchases Via Credit CardsIt is more common in small business, especially small contractors, to buy materials using credit cards.  Often the credit card accounts are the owner’s personal accounts.  Sometimes the cards are merchant cards.  As the bookkeeper it is your job to keep this information organized and up to date.
  • Bookkeeping – Accounts Payable Management (Lesson 43)

    Accounts Payable ManagementWith small business the biggest hearache for the bookkeeper is addressing the daily phone calls and letters (bills, statements and notices) related to purchases.  Vendors regulary communicate with the accounts payalbe manager wanting to know payment cycles and status of their respective account. 
  • Bookkeeping – Petty Cash (Lesson 44)

    Petty CashPetty cash is cash kept in the office in a lockbox or with staff for instant and emergency purposes.  It is actual cash and not checks.  There is a process to keep track of purchases paid with petty cash and to refill the depleted amounts of cash. 
  • Bookkeeping – Cash Disbursements (Lesson 45)

    Cash DisbursementsCash disbursements is the process of remitting payment to vendors, suppliers and third party contractual obligations.  Better managed offices pay bills in regular cycles including weekly and monthly obligations.  Preparation, reconciliation and actual check writing is commonly referred to as cash disbursements. 
  • Bookkeeping – Tracking Cash (Lesson 46)

    Tracking CashOf all the assets in business cash is the most valuable and coveted.  Keeping track of how much is available and where it goes is the responsibility of the bookkeeper.  Often owners have no idea of how much they really have nor how much of the existing cash is earmarked for certain items. 
  • Bookkeeping – Bank Reconciliations (Lesson 47)

    Bank ReconciliationsAn essential task of bookkeeping is making sure the ledger accounts for cash reconcile to the bank.  Your average person believes that this is a monthly task.   Well in the private world, this may be true.   But in small business, this is a daily task.
  • Bookkeeping – Controlling Cash (Lesson 48)

    Controlling CashIn small business, cash is almost always the number one issue. There is simply never enough. This is primarily attributable to growth.  Growth requires both physical assets to produce more and expansion of accounts receivable.  Technically the expansion of accounts receivable is the economic equivalent of lending cash.
  • Bookkeeping – Fixed Asset Purchases (Lesson 49)

    Every now and then management authorizes the purchase of a long-term producing asset.  This could be a vehicle, piece of equipment or real estate.  These purchases are referred to as fixed assets.  Recording of these entries is a little different and this lesson explains the entire recording process associated with fixed assets.
  • Bookkeeping – Introduction to Depreciation (Lesson 50)

    DepreciationDepreciation is the process of allocating the initial capital outlay for fixed asset purchases over time to the income statement.  The basic principle is that any fixed asset has a predetermined lifetime based on time, usage or fair market value.  Your job as the bookkeeper is to assign depreciation expense to the respective asset and ...
  • Bookkeeping – Depreciation Schedules (Lesson 51)

    Depreciation SchedulesWhen a small business purchases fixed assets two financially based opposing forces come into play.  The first is the financial reporting desire to present information in a fair manner so management can make good financial decisions.  The opposing force has to do with taxation.  Here the business desires to report less profit to reduce the ...
  • Bookkeeping – Book and Tax Depreciation (Lesson 52)

    Book and Tax DepreciationOne of the differences between book income and taxable income is depreciation.  In general Section 168 of the Internal Revenue Code allows businesses to accelerate their depreciation for tax purposes.  This increases the expenses of the business thus reducing profit for tax purposes.
  • Bookkeeping – Amortization (Lesson 53)

    AmortizationAmortization is similar to depreciation whereby an asset’s cost is allocated to the expense over time.  There are several differences with amortization.  Amortization is used with intangible assets and the method is almost always straight line.  As a bookkeeper it is your job to maintain the amortization schedules, report the information correctly and interpret the ...
  • Bookkeeping – Loan Accounting (Lesson 54)

    Loan AccountingAlmost every small business borrows money.  The most common reason is to purchase a fixed asset of some sort.  The amount borrowed is most often a long-term liability.  There are several steps involved in recording the original loan and then processing the respective payments.
  • Bookkeeping – Suspense Accounts (Lesson 55)

    Suspense AccountsWhen bookkeepers face an unknown variable with a transaction and don’t know where to place the debit or credit, they use a temporary account to hold the value.   This is called the ‘Suspense’ account.   There is a suspense account for each of the types of accounts.
  • Bookkeeping – Meals Tax (Lesson 56)

    Meals TaxA major source of local government revenue is the meals tax.  Most states authorize the right of local governments to raise revenues utilizing a meals tax.  It is defined differently in each state.  If a business is involved in the food service sector the bookkeeper needs to grasp the fundamental concepts of how the food ...
  • Bookkeeping – Franchise Fee and Revenue Taxes (Lesson 57)

    This lesson focuses on the accounting procedure for franchise fees and the formula used for revenue taxes   What is interesting is that in some states, one affects the other.  To fully grasp this accounting nuance, I’ll first explain the franchise fee.
  • Bookkeeping – Tracking Income Taxes (Lesson 58)

    It is important for the bookkeeper to track income taxes for the business and the owners.  Tracking includes apprising management of current status and pending obligations.  In addition, the bookkeeper must make sure the payments are made to the correct authority for the proper amount and assigned to the appropriate federal identification number.  
  • Bookkeeping – Other Taxes (Lesson 59)

    Other TaxesThere are several more taxes that small businesses must adhere to each year.   This lesson explains these other taxes including: Real Estate Taxes, Business Property Tax, State Franchise Tax, State Licenses or Fees, Unique Production or Consumption Taxes, and Assessments.
  • Bookkeeping – Vehicle Operations and Accounting (Lesson 60)

    Vehicle OperationsThe Internal Revenue Service authorizes two different methods to deduct expenses for vehicle operations. The most commonly used method in small business is the mileage reimbursement method explained in Lesson 61.  The second method is the actual cost of vehicle operations which is explained and illustrated here.
  • Bookkeeping – Mileage Reimbursement (Lesson 61)

    Mileage ReimbursementSome small businesses manage transportation costs in incremental payments by utilizing mileage reimbursement.   It is a very advantageous system if used correctly.   Other small businesses augment their existing vehicle fleet by paying employees via mileage reimbursement for the use of the employee’s automobile.
  • Bookkeeping – Auto Costs Related to Owners and Family Members (Lesson 62)

    Deductible Auto CostsThe Internal Revenue Service scrutinizes expenses that can and often are benefits to owners.   The most common benefit is the use of a company owned car for personal travel including using the car to get to and from work.   Owners would love to have this cost of travel paid by the company and deductible for ...
  • Bookkeeping – Other Transportation Costs (Lesson 63)

    Transportation CostsThere is much more to transportation with bookkeeping than accounting for vehicle operations, addressing mileage reimbursements or tracking auto costs related to owners and family members.   Bookkeepers must track the following too:
  • Bookkeeping – Charitable Giving (Lesson 64)

    Charitable GivingMany small business owners are actively involved in the community and thus donate time and money to their favorite cause.  In almost every case the owner believes the donation is a business deduction.   It is NOT a business deduction for tax purposes except under the C-Corporation status; however, the business is still writing the check. ...
  • Bookkeeping – Recurring Entries (Lesson 65)

    Recurring EntriesEvery day bills arrive from vendors that are mere repetition like the electric or phone bill.  They basically recur every so often (mostly monthly).  The bookkeeper must create a new entry as a part of his/her  daily functions.  This repetition consumes time and is a nuisance.
  • Bookkeeping – Complex Entries Expanded (Lesson 66)

    Complex EntriesA journal entry with multiple lines of entry affecting several different ledgers (accounts) is commonly referred to as a complex entry.  Many bookkeepers shy away from them as they feel intimidated by the difficulty involved and do not want to make an error.  This lesson helps the bookkeeper understand how to break the complex entry ...
  • Bookkeeping – Adjusting Journal Entries (Lesson 67)

    Adjusting Journal EntriesOne of the many tasks for bookkeeper in their daily operations is reconciling accounts including bank accounts, accounts receivable, accounts payable and many others.  Invariably, the balances are off and need adjusting.  To reset or balance the account the bookkeeper must use an adjusting journal entry.
  • Bookkeeping – Trial Balance Advanced Concepts (Lesson 68)

    Trial BalanceThe trial balance is a special report used by accountants and bookkeepers.  It is NOT a management nor a financial report.  Its primary purpose is verification of account balances and compliance to the dual entry system (debits equal credits).  It is generally utilized as the first step in the closing process for interim and annual reporting.  ...
  • Bookkeeping – Closing the Books (Lesson 69)

    Closing the BooksThe closing process is designed to finalize the financial information for that period of time.   It involves correction of errors, posting omissions and confirming balances of accounts.   Once done, the bookkeeper and management can prepare reports with a high level of confidence with their accuracy.
  • Bookkeeping – Advanced Skillsets (Lesson 70)

    Accounting SkillsetsThe next section of bookkeeping (advanced skillsets) introduces the bookkeeper to the different organizational methods and explains why certain kinds of transactions are handled differently than standard entry practices.   In addition some tax knowledge is infused throughout as the tax code impacts much of how accounting is performed.


  • Bookkeeping – Departmental Accounting (Lesson 71)

    Departmental AccountingOne of the goals of accounting is to report to management performance results, specifically financial performance.   Since most businesses sell more than one product or render more than one service, management is interested in understanding the performance of the respective products or service.   To successfully report this information, the accountant uses departmental accounting to divide the ...
  • Bookkeeping – Project (Job) Costing (Lesson 72)

    Job CostingAnother tool used by accountants to evaluate financial performance is project costing.   It is also referred to as contract or job costing.   This lesson uses the term ‘job’ throughout.   Job costing focuses on a specific long-term project customarily associated with a contract signed with a customer.
  • Bookkeeping – Phase Costing (Lesson 73)

    Phase CostingPhase costing takes accounting to the next level.   Phase accounting (costing and accounting are interchangeable at this level of detail) can only be used with job costing.   It is designed to break a job down into distinct functions (stages) for analysis.   It is a tool to identify discrepancies from estimates.
  • Bookkeeping – Percentage of Completion Method (Lesson 74)

    Percentage of CompletionIn project accounting there are two different methods of accounting used. The first is the completed contract method which is explained in more detail in Lesson 75. The second and the focus of this lesson is the percentage of completion method of accounting. This method is an advanced skill for accountants and requires knowledge of its proper ...
  • Bookkeeping – Completed Contract Accounting (Lesson 75)

    Completed Contract MethodA second and easier method of accounting with project accounting (construction) is the completed contract method.  This method does not utilize an engineering or detailed production schedule (chart) like the percentage of completion method.  It works well with any duration for project timelines.
  • Bookkeeping – Retail Accounting with Item Tracking (Lesson 76)

    Item TrackingThe retail business is interested in what sells well, not how well something performs against an estimate (project accounting).  The retail business uses a different type of accounting to analyze financial performance.
  • Bookkeeping – Cost Accounting (Lesson 77)

    Cost AccountingThe science of calculating the actual costs of manufacturing is known as cost accounting, a.k.a managerial accounting.  Unlike traditional accounting which records economic transactions after they occur, cost accounting identifies all underlying costs associated with the production of a single unit.
  • Bookkeeping – Temporary Accounts (Lesson 78)

    Temporary AccountsTemporary accounts are financial and process control tools used by management to achieve financial goals.  They are composed of internal, regulator and restrictive accounts.  They are opened at the beginning of an accounting period and closed prior to the end of an accounting cycle.
  • Bookkeeping – Internal Accounts (Lesson 79)

    Internal AccountsInternal accounts are used by management to clarify information, account for interdepartmental activities and address temporary bookkeeping issues.
  • Bookkeeping – Regulator Accounts (Lesson 80)

    Regulator AccountsRegulator accounts are non trial balance accounts used to guide and compare actual results against projected amounts.   These projections are customarily stored in regulator accounts.  The most common regulator account is a budget account.   Other regulator accounts include counters and identifiers.
  • Bookkeeping – Restricted Accounts (Lesson 81)

    Treasury StockThe third group of temporary accounts comprise restricted accounts.  These accounts are classified with the term ‘restricted’ due to a legally mandated or contractual obligation to limit access to their funds.  Most often, restricted accounts consist of cash or some physical asset.
  • Bookkeeping – Estimates (Lesson 82)

    EstimatesThere are many transactions in accounting requiring the accountant to use estimates for the respective debits and credits.  The following five lessons cover how estimating is performed with depreciation, payroll benefits, bad debts, warranties and extraordinary items.  This lesson explains why estimating is needed and used in business.
  • Bookkeeping – Estimating Depreciation (Lesson 83)

    Estimating DepreciationDepreciation is a form of an allowance for the wear and tear (exhaustion) of property used in a trade or a commercial enterprise.   The idea is to match as well as possible the actual use (utility) of the asset  to its change or reduction in fair market value due to that utility.
  • Bookkeeping – Estimating Employee Benefits (Lesson 84)

    Estimating Employee BenefitsEmployee benefits consist of vacation, sick time, retirement benefits, healthcare and other de minimis benefits.  As a function of accrual accounting these benefits are estimated and posted as a deferred liability in the accrued payroll section of the current liabilities section of the balance sheet.  This lesson explains how to calculate the respective benefits and ...
  • Bookkeeping – Estimating Bad Debts (Lesson 85)

    Estimating Bad DebtTolerating non-payment is simply a part of doing business.  To assist in measuring this dollar value, the accountant must estimate bad debts.  This is the fifth part in the series of bookkeeping estimates within the advanced skills section of bookkeeping. 
  • Bookkeeping – Estimating Warranties (Lesson 86)

    Estimating WarrantiesWarranties are assurances to customers that the product sold or service rendered will perform as stated or contracted.  Often products or services are defective and therefore require replacement or repair.  To properly match the cost of warranty work against the revenue generated an estimate of costs is made and recorded to cost of sales. 
  • Bookkeeping – Estimating Extraordinary Items (Lesson 87)

    Estimating Extraordinary ItemsThe final type of estimating relates to unusual and infrequent items.  These are commonly referred to as extraordinary items.  Basically, they rarely occur but do happen once or twice over an economic cycle.
  • Bookkeeping – Employee Benefits (Lesson 88)

    Employee BenefitsThere are a multitude of employee benefits employers provide to their employees.  This series covers several groups of benefits and explains the legal and accounting issues related to them.  This particular lesson introduces the concepts behind employee benefits and the basic accounting process.
  • Bookkeeping – Employee Health Insurance Mandate (Lesson 89)

    Employee Health Insurance MandateAfter three decades of discussion, in-fighting and wrangling, Congress passed a health insurance mandate along party lines of vote.  This health insurance mandate changed the rules for employers and affects the accounting department and in particular, the proper bookkeeping for the respective amounts paid by both the employer and employee. 
  • Bookkeeping – Employer Provided Retirement Plans (Lesson 90)

    For the longest time the retirement benefit was the most important employee benefit to offer.  Today it is number two behind health insurance which is mandated by law.  Still, it is a sought after benefit by employees and an excellent recruitment and retention tool for employers. There are two broad groups of retirement plans.
  • Bookkeeping – Health Savings, Reimbursement and Flexible Spending Accounts (Lesson 91)

    One of the drawbacks to the health insurance mandate for small business employers is the cost of the premium for the plan. To alleviate and reduce the cost of these premiums, employers provide alternatives in the form of health savings, reimbursement and flexible spending accounts.
  • Bookkeeping – Cafeteria Plans (Lesson 92)

    Cafeteria PlansCafeteria plans, a.k.a. Section 125 plans, are employer sponsored benefit packages that allow employees to choose from a menu of options and allocate their allotted share to the items they pick.  With this type of plan the employer agrees to an allowance per employee to contribute to the package.  The employee may either take the allowance ...
  • Bookkeeping – Other Employer Provided Benefits (Lesson 93)

    Other employer-provided benefits are composed of three groupings of benefits: welfare, other (Life Insurance, Auto & Education) and fringe.
  • Bookkeeping – Employer Provided Vehicle (Lesson 94)

    Employer Provided VehicleWith small business it is very common to provide a vehicle to the owner and key employees.  It is often done in the construction industry and transportation sector.   The idea is to provide transportation for not only the convenience of the employer but as retention tool for employees.
  • Bookkeeping – Controls in Accounting (Lesson 95)

    Controls in AccountingJust as manufacturing uses controls to ensure quality of product, controls are used in accounting to generate accurate information, maintain security over assets and comply with Generally Accepted Accounting Standards. The company implements various controls to assure accurate and timely information. 
  • Bookkeeping – Policies and Procedures (Lesson 96)

    Policies and ProceduresAt the peak of the hierarchy of internal controls sits policies.   Policies are written by the highest echelon of management for a company, its Board of Directors or Trustees.   The upper tier and mid level management of a business develop procedures to carry out the policies of the company.