Business Administration & Management

Mr. Bernstein

Record Keeping – Time Consuming but Important,

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May 7, 2015

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Business Administration & Management

Mr. Bernstein

Accounting SystemsBusinesses keep score

GAAP: Generally Accepted Accounting PrinciplesThe Accounting Equation: Assets = Liabilities + Owner’s Equity

Assets are anything of value (ie cash, equipment, accounts receivable)

Liabilities are anything the business owesOwner’s Equity is the net worth of the business

(Assets – Liabilities = Owner’s Equity)

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Business Administration & Management

Mr. Bernstein

Accounting SystemsGreatly aided by automationCan be in-house or outsourcedLegal Requirements can be found at:http://www.irs.gov/Businesses/Small-Businesses-

&-Self-Employed/Recordkeeping

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Business Administration & Management

Mr. Bernstein

Accounting SystemsAccounting Procedures

Create accountsRecord entries into journalsUse cash basis or accrual basisPost to ledgers

Journals should be updated daily if not constantlyJournal entries should be posted to ledgers weekly or more often

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Business Administration & Management

Mr. Bernstein

Examples of Accounts for JournalsSalesOffice SuppliesRentUtilitiesPurchasesPayrollDepreciation

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Business Administration & Management

Mr. Bernstein

Examples of Accounts for Journals: Payroll Data