Accounting Related

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  Business Recordkeeping: How Long Should You Keep Your Business Records

  According to the IRS, “You must keep records so that you can prepare a complete and accurate income tax return.” But the Internal Revenue Code doesn’t require any specific kind of records or record keeping system. So how do you know what to keep and for how long to keep it? Read on for some

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  Does Your Business Really Need to Account For Depreciation?

  Simply put, depreciation is both the fact that an item (an asset) loses value over time and the way to expense the cost of that item. If you’re familiar with the concept, you know that an asset is an item – a piece of machinery, equipment, furniture, etc. – that you purchase for your business

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  Tax Reporting of Cost of Goods Sold

  I’ve had a number of small business owners ask me how to calculate cost of goods sold on their tax return. What I generally tell them is that reporting cost of goods sold is not required for most businesses. Read on for information on what cost of goods sold is and when it should be

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  12 More Important Accounting Terms Explained

  My previous post focused on twelve general accounting terms (if you haven’t read it yet, I highly recommend it). The twelve terms explained below deal more specifically with financial reporting. Becoming familiar with these terms will help you to better understand your company’s financial reports and to communicate more effectively with other financial people such

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• 12 Important Accounting Terms Explained

    I think it’s important for all small business owners to know something about accounting so that they can better understand the financial, or money, side of their business; especially if you’re going to undertake your company’s bookkeeping work yourself. Just like every other industry, accounting has its own important terms. Becoming familiar with these

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• Accounting Rules vs. Tax Rules: Tax Deductibility of Travel Expenses

  There are generally accepted accounting principles that are used for bookkeeping purposes and there are tax laws that are used for completing and filing a tax return. These two things are not always the same. Because there are differences between accounting principles and tax law, the amount you can deduct for tax purposes may not

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• Cash Accounting vs. Accrual Accounting: Which should your business use?

  What’s the difference? The concept of cash basis accounting is rather easy to understand: A business records an expense only when cash is spent and recognizes income only when cash is received. That’s pretty much it. Accrual basis accounting on the other hand, is a bit more complex. When you use accrual accounting, your accounting system

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  How to Set Up Your Company’s Books: Understanding the Chart of Accounts

    The terms “books” comes from the old days – before computers – when businesses actually maintained ledger books that the company’s listing of accounts and accounting transactions were recorded in. They were called the books of account. Business owners began to refer to their “books” and the term stuck. Most all businesses these days

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