Deardorff Bookkeeping LLC

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A ledger is the master record where all financial transactions are organized by account. Think of it as the brain of the bookkeeping Every dollar that moves through a business eventually lands in the ledger, sorted into categories. Transactions happen first. Then they get classified and stored in the ledger. For example: Date Description Debit Credit Mar 1 Office supplies $50 Mar 1 Cash $50 The entry eventually lives insi

What is Cash in and Cash out? Cash-in and Cash-out refer to the inflow and outflow of money is a business Cash-in represents deposits and revenue into a system Cash-out represents withdrawals or expenses Cash out can sometimes mean to convert assets, investments. & winnings into actual numbers Cash is the lifeblood of your business It's very important to understand how money moves in and out of your business so that you can Avoid shortages Make informed business decisions

Continuing on from our last video, I wanted to go over some major components of the Profit and loss statement Gross Profit: The money you earned before subtracting the cost of goods sold. Such as the money inside the register COGS (cost of goods sold) which lists the prices of all products sold in store Revenue: The cash left after subtracting COGS from Gross Profit Operating Expenses, the money used to keep the business operational, such as utilities or rent or salaries. Fi

A profit and loss statement (also called a P&L or Income Statement) is used for calculating profit by comparing revenue to expenses Cost of goods sold & Operating expenses To determine how much money your business made you can use these equations Gross Profit - Cost of goods sold - operating expenses = Profit or a loss HERE'S AN EXAMPLE: You sell your products at your store leaving you with a total gross profit of “X” This gross profit (“X”) is then subtracted by the cost

Assets = Liabilities + Equity The balance sheet equation can be rewritten depending on the answer you need Assets are things that a business owns or that generate revenue Liabilities are debts the business owes to another entity. It’s important to remember that liabilities such as loans can help owners finance their companies So, what is Equity? Equity is an investment. The money you have left over after you subtract liabilities from your assets. A good way to understand th

What is Bookkeeping? Bookkeeping is the systematic daily process of recording, categorizing, and summarizing a business's financial transactions. builds a solid foundation for business growth by maintaining organized and accurate financial records. It can help you make informed business decisions. It's more than just a way to stay organized, it can help you save money, make money, and make good decisions. Many owners dread this responsibility, but it is a vital part of own

The fourth step is to prepare the financial statements. There are 3 important reports that need to be completed. 1) Income statement or Profit and Loss ( monthly, semiannually, yearly) 2) Balance Sheet (aka snapshot of business' net worth) 3) Statement of Cash flow (span of time) The fifth step is to review the financial statements. 1) Income Statement--Revenue, COGS, and Operating expenses *This is a great

Bookkeeping as a whole relies on a few concepts that are necessary to the business. Some of these terms include Assets, Liabilities, Equity, Revenue, Expenses, & Profit & Loss . Today I wanted to help define an asset to help you better understand your finances. Remember, Assets = Liabilities + Equity. Assets are the property and cash your business owns that has value. What are some forms of assets, Logan? Some forms of assets are Cash, Vehicles, Tools & Equipment, Buildin

Remember Assets = Liability + equity A liability is what your company owes to another entity, whilst an asset is the opposite. Liabilities can come in many forms just like assets. Some of these are Accounts Payable which is the money you owe such as a pending invoice, Or even Credit card payments and Loans. Some other liabilities are Wages owed, Rent payments, and even Taxes. Not all liabilities are bad and some can even help leverage your own assets for profit.