Payroll is one of the most vexing parts of bookkeeping. This is because the rules keep changing and there are many parts to understand. Some brave souls tackle it head-on and master the beast. Others think the software programs will do it all for them. Many shy away from the whole process and turn it [...]
Category Archives: John’s Comments
Payroll: In-house or out-source?
20-Dec-04Journalizing Depreciation
30-Nov-04One of the students taking my Real Life Accounting for Non-Accountants online accounting course e-mailed me with a question about “Accumulated Depreciation”. He was having a real hard time comprehending why that account existed. To me, it was clear as a bell. To him, he simply could not see it. I tried explaining it from [...]
For some sole proprietors, there is confusion between the money taken out for personal use (Owner’s Draw) and the Net Profit earned by the business. One is taxable and the other is not. Let’s clear it up now. First, read my article, “Understanding the Bottom Line”. As I mention in the article, there is a [...]
What’s there to discuss about the general journal? I’ve explained why it is your most versatile accounting tool in the articles section of the blog. So what else is there to talk about? Well, here are some tips that may be helpful: When writing general journal entries it is a good idea to work with [...]
Let’s talk about Bank Reconciliations
13-Oct-04There are bank reconciliations and then there are bank reconciliations. Computer accounting software programs can do them automatically now, but what do you get? You get a confirmation that you are “in balance” with the bank. Is that all you need? Not for me! I still do them the old fashioned way, e.g., by hand. [...]
Let’s talk about Debits and Credits
04-Oct-04Having worked in the field of accounting for over twenty-years, I have found that many people tend to shy away from memorizing the “Accounting Model”. See my article titled, “The Accounting Model – Accounting’s Rosetta Stone” in the articles section of this blog. The Accounting Model is the formula for how debits and credits work. [...]
Detecting Accounting Errors
04-Jan-05The beauty of using double-entry accounting is that your books are designed to be “in-balance”. If they are not in balance there is an error. Therefore, after running a set of financial statements, it is important to check the general ledger (GL) account balances on the Balance Sheet. There are some “at-a-glance“ figures to check [...]