1. What is the best way to maintain accounting records?
The best option is to use services of an accountant with online bookkeeping experience to help and maintain accurate transaction data, using accounting software to help an accountant in performing various accounting activities.
2.What does the term double entry mean in accounting?
Double entry means basically two aspects of every transaction. For instance, when you buy a product or an item, you pay the cash. Similarly, when you sell a product, you get the money.
3.What types of accounts are involved in double entry bookkeeping?
Double entry bookkeeping involves five types of accounts:
– Income accounts
– Expense accounts
– Assets accounts
– Liability accounts
– Capital accounts
4.What is the difference between Public and Private Accounting?
Public accounting is a business that provides accounting expertise, auditing, and tax services to their clients.
Private accounting is done for your own company.
5.What is a general ledger account?
A general ledger account can be defined as an account or record used to sort, store and summarize a company’s transactions.
General ledger accounts include:
– Asset accounts — cash, accounts receivable, equipment
– Liability accounts — accounts payable, accrued expenses payable
– Revenue accounts — sales and service fee
– Expense accounts — salaries expense, rent, electricity, advertising
– Income accounts — gain on sale of assets, interest expense
6.What is bank reconciliation?
Bank reconciliation is a statement showing the comparison of the balance in a bank statement with the balance of a bank account in the accounting records of the business.
7.What is account receivable?
Account receivable is amounts of money due to a business within specific period of time for goods or services delivered to a client.
8.How do I know what expenses are tax-deductible?
Tax-deductible expenses are common small businesses’ expenses that are listed below:
– Business expenses which include office supplies, electricity, rent, business insurance, machinery maintenance
– Employees expenses such as salaries, wages, bonuses, payroll taxes, insurance contributions, life and medical insurances
– Miscellaneous – advertising costs, accounting fees, bank loan interest;
The best way to take advantage of all the tax-reducing benefits available to your business is by working with a qualified bookkeeping or accounting professional.