Entrepreneurship Mr. Bernstein Financial Record Keeping, pp December 12, 2014

Entrepreneurship Mr. 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) 2

Entrepreneurship Mr. 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 3

Entrepreneurship Mr. Bernstein Examples of Accounts for Journals Sales Office Supplies Rent Utilities Purchases Payroll Depreciation 4

Entrepreneurship Mr. Bernstein Examples of Accounts for Journals: Payroll Data 5