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Bookkeeping & Write-up

What is the disclosure principle ?

Asked Wednesday, December 27, 2000 by an anonymous user
The disclosure principle requires that the financial statements inclusive of the income statement, balance sheet and cash flow statements present the most useful material amount of relevant information. Notes may be included to the financial statements for additional disclosure. All information that is necessary in order not to be misleading and for investors to make informed decisions if applicable.
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Bookkeeping & Write-up

What are examples of required accruals to adhere to the matching principal ?

Asked Wednesday, December 27, 2000 by an anonymous user
Once bookkeeping procedures have been completed, the bookkeeper or CPA prepares certain adjustments to recognize events that, although they did not occur in conventional form where there was exchange of money, are in substance already completed transactions. The following are the most common examples that require adjustments, accrued revenue such as interest earned on a bank account but not yet received. Accrued expenses such as wages or rent or utilities incurred but not yet paid. Unearned revenue such as earning subscription revenue that had been collected in advance. Prepaid expense such as expiration of a prepaid insurance premium. Depreciation is the recognizing of the cost of a asset as expense spread over its useful economic life. Inventory when recording the cost of goods sold on the basis of a period's purchases and the change between beginning and ending inventory balances. Receivables recognizing bad-debt expenses on the basis of expected uncollected amounts.
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Bookkeeping & Write-up

What is a Petty Cash account ?

Asked Wednesday, December 27, 2000 by an anonymous user
When a company has lot of small, recurring expenses that need to be paid right away in cash, A petty cash account is set up. Examples of small expenses are to buy stamps, give tips, buy newspapers or magazines or buy a computer power cord etc. A fund of $100 may be set up and used until almost gone and then re set up for $100. You might establish this fund by writing a check to the fund, and noting on the check that it goes to the "petty cash" fund. For internal control you will withdraw from the fund by filling out a voucher that describes who took the money, how much, for what purpose and on what date. The accountant will then use the information on the petty cash slip to categorize the expenses for the financial statements.
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Bookkeeping & Write-up

I started a new business . Where do I find information on how to file Forms W-2 ?

Asked Friday, December 22, 2000 by an anonymous user
W-2 forms should be furnished to your employees by January 31. It is your responsibility as an employer to file Forms W-2 with the Social Security Administration (SSA) for your employees which will show the wages paid and taxes withheld for the year. You must send Copy A to the SSA with Form W-3 by February 28. Form W-3 is a summary form that shows the total of all W-2's being sent. Go to the IRS website http://www.irs.ustreas.gov/prod/forms_pubs/forms.html or get Publication 15, Circular E, Employer's Tax Guide or Forms and publications can be requested by calling 1-800-829-3676.
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Bookkeeping & Write-up

What is the first year limitation on expensing business equipment ?

Asked Monday, December 18, 2000 by an anonymous user
You can elect to expense part or all of the cost of section 179 property (defined earlier) that you placed in service during the tax year and used predominantly (more than 50%) in your trade or business. Generally, the maximum section 179 expense deduction is $500,000 for section 179 property placed in service in 2010 during the tax year beginning in 2010. Qualified real property that is elected to be treated as section 179 property is limited to $250,000 of the maximum section 179 deduction of $500,000 for 2010. If you elect to expense section 179 property, you must reduce the amount on which you figure your depreciation or amortization deduction (including any special depreciation allowance) by the section 179 expense deduction.
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Bookkeeping & Write-up

How do I prepare to get a business loan ?

Asked Monday, December 04, 2000 by an anonymous user
The basic three questions a lender will ask you is, how much do you want to borrow?, how will you use the loan?, and how will you repay the loan?. You must be prepared to answer these questions. When you apply for the loan, you must be able to provide prior, current and projected financial statements and a business plan which includes the name of the business, location, production facilities, business goals and legal structure. A description of your business experiences and management capabilities as well as the expertise of your key personnel will also be needed.
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Bookkeeping & Write-up

What expenses should be capitalized?

Asked Thursday, November 23, 2000 by an anonymous user
Generally, expenditures for things which have a useful life over a period of years are capitalized and then systematically expensed over the useful life of the asset. Expenditures with a life less than 12 months can be fully expenses in the current year.
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Bookkeeping & Write-up

What is depreciation or amortization ?

Asked Thursday, November 23, 2000 by an anonymous user
Depreciation and amortization is the systematic write-off of an asset over the useful life of the asset. Amortization refers to intangible assets and depreciation refers to the write-off of tangible property.
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Bookkeeping & Write-up

Can Form 941 or Form 944 be filed over the Internet ?

Asked Thursday, October 26, 2000 by an anonymous user
Yes. Now, more than ever before, businesses can enjoy the benefits of filing and paying their federal taxes electronically. Use E-File at www.irs.gov/efile and (EFTPS) the Electronic Federal Tax Payment System at www.eftps.gov or call EFTPS Customer Service at 1-800-555-4477.
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