Phoenix Arizona CPA | Arizona Tax Accountant | Arizona Income Tax

Many of small business owners would rather focus on making and selling their products than on keeping their books and records. However, bookkeeping is just as important as marketing and doing business. Many a great business ideas has failed due to a poor bookkeeping system. And ultimately, won’t be keeping up if money going out is more than money that is coming in. Apart from business owners desire to stay in business, two other reasons why book keeping system is most important are: Read the rest of this entry »

Financial accounting’s focus is on the financial reports distributed to people outside of the company. The major component of financial reporting is the financial statements: income statement, balance sheet, statement of cash flows, and the statement of stockholders’ equity.       The income statement indicates a company’s profitability during a specified time period such as one year, three months or one month. Read the rest of this entry »

In the modem world no business can afford to remain secretive because various parties such as creditors, employees, taxation authorities, investors, public and government etc., are interested to know about the affairs of the business. Affairs of the business can be studied mainly by consulting final accounts and the balance sheet of the particular business. Final accounts and the balance sheet are end products of book-keeping. Because of the importance of these statements it became necessary for the accountants to develop some principles, concepts and conventions which may be regarded as fundamentals of accounting. Such fundamentals having wide acceptance give reliability and creditability to the financial statements prepared by the accountants. The need for ‘generally accepted accounting principles’ arises for two reasons: First, to be logical and consistent in recording the transactions and second, to conform to, the established practices and procedures. Read the rest of this entry »

Assets

An asset may be defined as anything of use to future operations of the enterprise and belonging to the enterprise. For example, building, land, machinery, cash, debtors (amount due from customers) goodwill etc.

Equity

In broad sense the term equity refers to total claims against the enterprise. It is further divided into two categories:

(1) Owners claim-capital and (2) Outsiders’ claim-liability (3) Liability: Amounts owed by the enterprise to the outsiders i.e. to all others except the owner. For example, trade creditors, bank overdraft etc. (4) Capital: The excess of assets over liabilities of the enterprise. It is the difference between the total assets and the total liabilities of the enterprise. For example, if on a particular date the assets of the business amount to $ 1,00,000 and liabilities to $ 30,000 then the capital on the date would be $ 70,000. It is also known as net worth. Read the rest of this entry »

Accounting vs. Book-keepingBook-keeping concerns itself with the recording (correctly and in a set of books) of those transactions that result in the transfer of money or money’s worth. Whereas accounting is comprehensive in perspective. It extends to classifying, summarizing, presenting and even analyzing accounting information .

Accounting vs. Accountancy

Body of knowledge (consisting of principles, postulates, assumptions, conventions, concepts and rules) governing the science of recording classifying and analyzing financial transactions is accounting. Whereas the practice and art of the Read the rest of this entry »

A balance sheet may be defined as “a statement prepared with a view to measure the exact financial position of a business on a certain date.

“It is prepared from the trial balance after all the balances of nominal accounts are transferred to trading and profit and loss account and corresponding accounts in the ledger are closed. The balances now left in the trial balance are either personal or real accounts. In other words, they either represent assets or liabilities existing on the date of closing of accounts. Read the rest of this entry »

Receiving a Notice of Audit from the IRS is just the beginning of a stressful, worrisome, and possibly even fearful, situation. While you may feel like panicking, that’s the last thing you should do! So, take a deep breath and read on. You can survive your IRS audit by following these tips for before, during, and after the audit.

Before the Audit –>

Here’s something on the internet that’s a godsend:  free online bookkeeping courses.  Do you think bookkeeping is confusing?  If you’re like me, you can balance a checkbook or household budget just fine, but when you start trying to figure out assets and liabilities, it gets confusing.  It might be easier if they used minus signs instead of parentheses to indicate negative amounts.  Or if they didn’t add liabilities.  But it is what it is, and, if you have a home business, you can screw things up badly if you can’t keep your books right. Read the rest of this entry »

Last year, more than 50 million people use various software programs to help in filing for income tax. In fact, the developers have projected an increase in the years to come because this makes the task easier than doing it by hand or with the help on accountant.

There are a lot of companies offering similar features when it comes to filing tax using the computer. Some have to be purchased from the store while there are those that can be downloaded from the net. Read the rest of this entry »

Income tax filing preparations can be a very complex process. There are different tax situations that entail different treatments. You will need the necessary know how and skills to be able to prepare your income tax for filing. This complex situation can be even more compounded by the fact that you need to do income tax preparations for a corporation or business. In this case, the already complicated process of tax filing preparation can be come even more complex. Read the rest of this entry »