1. QuickBooks
Accounting 101

2. Accounts Used to track a company’s finances
Separates income or expenses for individual totals
Some are physical – bank accounts
Some are “virtual” – income or expense accounts

3. Types of Accounts Asset Accounts – cash or things owned by company
Liability Accounts – debts owed by the company
Income Accounts – money the company has made
Expense Accounts – money the company has spent

4. Assets, Liabilities, and Equity
Assets – cash or things that can be converted to cash
Current Assets – cash or cash equivalents
Fixed Assets – land, buildings, machinery, etc.
Liabilities – debts of the company
Current Liabilities – paid off within one year
Long-term Liabilities – mortgages, loans, etc.
  Equity – the net worth of the company    

5. Assets, Liabilities, and Equity
Assets - Liabilities = Equity Assets = Liabilities + Equity

6. Assets, Liabilities, and Equity: An Example
Company A: Assets $1,000,000 Liabilities $750,000 Equity $250,000 Company then earns $100,000: Assets $1,100,000 Liabilities $750,000 Equity $350,000 Company then borrows $500,000: Assets $1,100,000 Liabilities $1,250,000 Equity -$150,000

7. Financial Reports Balance Sheet Profit and Loss Statement
“Freezes” a company’s assets, liabilities, and equity at a point in time.
Profit and Loss Statement
Lists income and expenses for a specific time period.

8. Fiscal Years Calendar Year – Jan. 1st through Dec. 31st
Fiscal Year – established by company
May be mandated by law.
Can be calendar year or another 12 month period.
Tax Year - the 12-month period for which taxes are due.

9. Cash vs. Accrual Accounting
Cash accounting
Income is recorded when the money is deposited in the bank.
Expenses are counted when the check is written to pay for them.
Accrual accounting
Income is recorded when the invoice is created.
Expenses are counted as of the date of the bill from the vendor.