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Copyright 2006 Bookkeeping R Us All Rights Reserved
At last the newest and greatest QuickBooks becomes available for pre-ordering on September 24! That’s only one short week away. As the release date nears I will be bringing you highlites of what has improved and what is new. And on the 24th I will be providing you direct links that will save you $$$$’s on your purchase of the 2008 QuickBooks software and supplies.
Copyright 2006 Bookkeeping R Us All Rights Reserved
A full charge bookkeeper within a business is the person who can perform all the necessary bookkeeping tasks required by a business. These tasks would include recording all cash, accounts payable and accounts receivable transactions as well as performing payroll functions. One would be responsible for filing all payroll tax returns as needed as well. This designation would also include the responsibility of making general journal entries, reconciling bank and credit card accounts, analyzing certain key accounts, posting adjustment transactions, budget tracking and preparing in-house reports such as a trial balance, balance sheet and income statement. A full charge bookkeeper might also be responsible for monthly and year end closing entries. He or she might have supervisory responsibilities and would report directly to the controller or CFO or in smaller companies directly to the principal owner. And might find them selves working closely with the CPA who prepares the company’s tax returns and perform audits.
Copyright 2006 Bookkeeping R Us All Rights Reserved
When you are setting up a set of books for a partnership there are equity accounts needed that are unique to a partnership. An equity account for each partner needs to be set up. When the investment is received by the partnership the entry is debit cash and credit the appropriate partner’s equity account. Should the partner’s investment be in the form of property not cash then the debit would be to a fixed asset account instead of cash. These partner capital accounts should not be posted to again unless there is an increase in the partner’s investment or the partner withdraws from the partnership.
The other accounts to be set up are draw accounts for each partner. When a partner receives a distribution of the partnership’s profits then the entry would be to debit each of the partner’s draw account and credit cash.
The net of each partner’s investment account and draw account equals the individual partner’s equity in the partnership.
Copyright 2006 Bookkeeping R Us All Rights Reserved
A limited partner is a member of a partnership and as such incurs limited responsibility of the partnership’s obligations. The limited partner’s liability is limited to the amount of their individual investment in the partnership. Also a limited partner is not allowed to take an active part in the management of the partnership.
Copyright 2006 Bookkeeping R Us All Rights Reserved
Interest computed on only the original principal. For example a deposit into a savings account that accumulated simple interest of 3% would only have the interest yield a yearly amount of $30 ($1000 x 3%) and interest would not be paid on the interest that accumulates in the account. Simple interest computation is also sometimes used with a short term promissory note payable.
Copyright 2006 Bookkeeping R Us All Rights Reserved
GAAP stands for Generally Accepted Accounting Principles and represents standards, conventions and rules to be followed by accountants in recording and summarizing financial transactions and preparation of financial statements. These rules and standards come from various authoritative organizations and documents such as the AICPA, FASB statements, APB opinions, AICPA Accounting Research Bulletins and the AICPA Industry Guides as well as industry practices, traditions and accounting books and articles.
Copyright 2006 Bookkeeping R Us All Rights Reserved
An account that is funded, used and then replenished and the cycle starts all over again. The most common example of this type of account is a Petty Cash Fund. A Petty Cash Fund is set up with a designated amount of money. Through out a period of time the fund is used to reimburse small expenses, pay for miscellaneous postage and deliveries, etc. At a pre-determined time such as once a month or when the funds are reduced to a pre-determine amount the fund is replenished.
When funding the Petty Cash Fund for the first time the entry is Debit Petty Cash Fund and Credit Cash. Prior to replenishing the fund a report is prepared dividing up the expenses by type and to determine how much money is needed to replenish the fund to its original amount. The entry to replenish the fund is Debit the appropriate Expense Accounts (such as Postage or Office Supplies) and credit Cash.
The Petty Cash Fund account is never posted to again unless the original amount assigned to the account is changed. For example you determine that the amount of money residing in the fund is inadequate to meet the monthly expenses or the fund is retired.