If you are a sole-proprietor, you may have wondered about the Owner’s Draw account and how it works. I’ll try to explain it in a way that makes sense to people who use QuickBooks.
Owner's Draw is an equity account on the Balance Sheet. It represents the sum of personal money that the owner has added and removed from the business. I recommend that sole proprietors do the following. 1. Change the name of Retained Earnings to Owner's Draw. If there is already an Owner's Draw, Owner's Investment, or … Continue reading Everything you want to know about Owner’s Draw in QuickBooks
Let’s review the traditional cogs equation. It’s very easy to understand. I call this the old-fashioned way to compute cogs since it's not the formula used by modern accounting software such as QuickBooks, which relies on the perpetual inventory system. Even though it seems old fashioned, it's a good formula to memorize. The cogs equation's … Continue reading COGS equation: calculating cost of goods sold
As I have mentioned before, I am studying for the CPA exam. I hope to take REG before the testing window closes for this quarter (September 2018). The whole exam has a reputation for being very difficult. I'm sure is true. However, I just came across something that seems to make it even more confusing: … Continue reading The CPA exam uses 2016 and 2017 tax law
Here I explain a very efficient way to get a lot of transactions inputted quickly into QuickBooks. I honestly believe it is faster than relying on downloads. It uses a single window, the General Journal, to enter every transaction for a statement for the month.
Years ago, I was looking to buy a document stamp that said Reconciled. Seemed logical to me to have one, and I knew I'd use it a lot. I looked and looked, but when I couldn't find one I decided to have one custom made. I thought it would be cute to have a little image on it, so that's what I did. Imagine my delight at seeing it again today after not seeing it for a long time.
It makes sense to think of the OCI statement as sort of like a reconciliation statement. It accounts for the difference between the FMV reporting and the amortized cost reporting on the two financial statements. But off the top of my head, there is something inconsistent about this. The two most important financial statements used by large firms and investors are required to be reported on different bases.
Good bookkeepers are not merely data entry clerks, because QuickBooks is not merely a database.
There is a trend in bookkeeping and accounting for small businesses to rely on bank and credit card feeds to handle the bulk of transaction processing. While I applaud the advancement of technology, this trend has two significant limitations.
The trend in the small business arena is for non-accountants to choose the tool that their accountants will use.