By John A., CPA Tracy
Examine the fundamentals of sensible accounting simply and painlessly with Accounting For Dummies, 4th variation, which good points new details on accounting tools and criteria to maintain you brand new. With this advisor, you could stay away from accounting fraud, reduce confusion, maximize earnings, and make feel of accounting fundamentals with this plain-English consultant for your accountant’s language. know the way to control stock, record source of revenue and costs for public or inner most businesses, review revenue margins, learn company strengths and weaknesses, and deal with budgets for a greater final analysis.
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Extra resources for Accounting For Dummies, 4th edition
Business managers get paid to make profit happen. If the business fails to meet its profit objectives or suffers a loss, its managers may be replaced (or at least not get their bonuses). As an author, I hope my publisher continues to make profit so I can keep receiving my royalty checks. Your investments in businesses, whether direct or through retirement accounts and mutual funds, suffer if the businesses don’t turn a profit. I hope the stores I trade with make profit and continue in business.
2 million total of liabilities and owners’ equity. The balance or equality of total assets on the one hand and the sum of liabilities plus owners’ equity on the other hand is expressed in the accounting equation, which I discuss in Chapter 1. Generally speaking, five or more assets are reported in a typical balance sheet, starting with cash, and then receivables, and then cost of products held for sale, and so on down the line. Generally five or more liabilities are disclosed, starting with trade credit liabilities (from buying on credit), and then unpaid expenses, and then proceeding through the interest-bearing debts of the business.
Profitmaking activities cause changes in the financial condition of a business — but maybe not the changes you suppose. Many people assume that making a profit increases a business’s cash balance by the same amount and that’s the end of it. That’s simply not true. Making profit leaves many footprints on the financial condition of a business. Also in this chapter, I briefly discuss financial accounting and reporting standards. Businesses comply with established rules for recording revenue, income, expenses, and losses; for putting values on assets and liabilities; and for presenting and disclosing information in their financial reports.