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This section offers a comprehensive overview of financial record keeping essential for entrepreneurial success. It emphasizes the importance of Accounting Systems and the Generally Accepted Accounting Principles (GAAP). The article introduces the fundamental accounting equation: Assets = Liabilities + Owner’s Equity, defining each term's significance. It outlines practical accounting procedures, including maintaining journals, ledgers, and the importance of timely updates. Real-world examples of accounts such as sales, payroll, and utilities showcase the application of these concepts in business practices.
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Entrepreneurship Mr. Bernstein Financial Record Keeping, pp 428-436 May 16, 2014
EntrepreneurshipMr. Bernstein Accounting Systems Businesses keep score GAAP: Generally Accepted Accounting Principles The Accounting Equation: Assets = Liabilities + Owner’s Equity Assets are anything of value (ie cash, equipment, accounts receivable) Liabilities are anything the business owes Owner’s Equity is the net worth of the business (Assets – Liabilities = Owner’s Equity)
EntrepreneurshipMr. Bernstein Accounting Systems Accounting Procedures Create accounts Record entries into journals Use cash basis or accrual basis Post to ledgers Journals should be updated daily if not constantly Journal entries should be posted to ledgers weekly or more often
EntrepreneurshipMr. Bernstein Examples of Accounts for Journals Sales Office Supplies Rent Utilities Purchases Payroll Depreciation
EntrepreneurshipMr. Bernstein Examples of Accounts for Journals: Payroll Data
