![]() ![]() Statement of Revenue and Expense is also a term used for the income statement. This statement summarizes how a business typically incurs its revenues and expenses over a fiscal quarter or year. You will learn an income statement is a financial statement that summarizes the amounts of revenue earned and the expenses incurred by a business or entity over a period, which measures the financial performance of a business. When we are finished, you will better understand how these methods will help your business run more efficiently. These terms all involve money or the use of money in some form. In Module Five of bookkeeping class, you will learn about the income statement, cash flow statement, capital statement, and budget versus actual. You will learn the accounting equation, double-entry accounting, types of assets, liabilities, and equity. The balance sheet will ultimately provide a snapshot of the company’s current financial condition. Assets and liabilities are usually listed first, followed by equity, which is the difference between the assets and the liabilities. It helps keep everything organized and on point.Ī balance sheet is a financial statement that shows the assets, liabilities, and owner’s equity at a specific point in time. In Module Four, you will learn the balance sheet will help provide balance to your business. In total, it is called the general ledger and is considered a permanent, classified record for each business account. Each account is recorded on separate sheets in a book or binder. You will learn the general ledger is a record of all the accounts of a business. You will learn the journal is the way to keep track of all inputted information or data concerning a business to allow the books to be properly balanced. The best way to keep track of these records is to set up a separate accounts receivable record for each customer. Such money can come from extending credit to a customer who purchases the business’s products or services. You will learn this type of record is used to keep track of money owed to a business. Though the business will likely be billed regularly by its creditors for the balance on the account, having your records will allow the business to be aware of its financial standing with the creditors at any given time. You will learn this type of record is used to keep track of debts owed by a business to creditors for purchased goods or services on an open account. In Module Three, you will learn about accounts payable, accounts receivable, the journal, and the general ledger. Under the accrual method, you will learn income is counted when the sale occurs, and expenses are counted when you receive the goods or services. ![]() Under the cash method, you will learn that income is not counted until cash (or a check) is received, and expenses are not counted until paid. The cash method is the more commonly used method of accounting in small businesses. In Module Two of bookkeeping class, you will learn about the two accounting methods: In Module One, you will learn the basic terms you will then be well prepared to make sense of basic written reports, communicate with others about important financial information, and cope with a common business problem: imprecise or even wrong use of financial terminology. Basic TerminologyĪ big part of understanding the bookkeeping of a business consists of nothing more than learning the language. In small businesses, the accountant may be the owner or Chief Financial Officer (CFO), or the accounting function may be outsourced. In most businesses, the bookkeeper operates under the accountant. It also consists of the presentation and financial health and control functions of the company through various statements. ![]() Of the bookkeeper’s numbers to determine the firm’s financial health.
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