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SQ-1 Week 5--Finance

SQ-1 Week 5--Finance. Judy Ballard. Chart of Accounts. Income Expense Assets Liabilities Equity. The Four Basic Financial Statements. Profit & Loss (Income Statement) Balance Sheet Statement of Cash Flows Statement of Changes. What is a P & L?. Profit & Loss (Income Statement)

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SQ-1 Week 5--Finance

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  1. SQ-1Week 5--Finance Judy Ballard

  2. Chart of Accounts • Income • Expense • Assets • Liabilities • Equity

  3. The Four Basic Financial Statements • Profit & Loss (Income Statement) • Balance Sheet • Statement of Cash Flows • Statement of Changes

  4. What is a P & L? • Profit & Loss (Income Statement) • Shows all revenues and expenses • Reflects a period of time

  5. What is a Balance Sheet? • Balance Sheet • Reflects Assets, Liabilities, Equity • Reflects a point in time

  6. Putting it together: • The income statement shows your income for the month and how you spent it • The balance sheet will show you the value of your bank accounts, assets and if you owe money

  7. Other Financial Statements • The Statement of Cash Flows is divided into three areas • Operating activities • Investing activities • Financing activities • Statement of Retained Earnings • Reconciles changes in the retained earnings account • Details the change in owners' equity 

  8. Bookkeeping vs Accounting • Bookkeeping is the recording of daily transactions in a consistent way • Entering & paying bills • Invoicing & recording payments • Journal entries • Payroll • Reconciling accounts • Accounting is a higher level process that uses financial information to produce financial models • Analyze costs of operations • Tax preparation • Audit • Provide advice concerning the impact of financial decisions

  9. Do I need a Bookkeeper? • Doing your books is taking away from the time you can spend on your business or you’re not keeping up to date • You are not sure you are keeping the records correctly • Your accountant is performing bookkeeping duties

  10. Do I need an Accountant? • Preparing a corporate tax return • Performing audits • Advice concerning stock issuance • Consultation concerning Licencing agreements

  11. How Do I Work With A Bookkeeper? • COMMUNICATE • Keep your receipts • Share information concerning debt and equity • Send invoices and approvals in a timely fashion

  12. Thank you! Judy Ballard info@right-on-site.com CIC@CET 20 S Sarah St. Louis, MO 63108 Tell everyone what you want to do and someone will want to help you do it. – W. Clement Stone

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