Читать книгу Financial Accounting For Dummies - Maire Loughran - Страница 58

IN THIS CHAPTER

Finding out the difference between business entities

Learning about small business reporting

Managing cash and expenses

Students approach me every session I teach financial accounting to pick my brains about accounting for a small business. I’ve come to find out that a lot of people have a small gig running on the side to make extra money. Sometimes it’s because they want to completely transition from working for “the man” to self-employment. Other reasons include increasing savings, paying off student debt or planning for a big purchase like a house.

To address this occurrence, in this chapter, you learn the difference between the two most common types of business entities selected by small business owners: sole proprietorships and S corporations. Hint: It’s because both are easy to set up and operate! I also discuss the difference in recording revenue and expenses between the two. To round it all out, I offer a brief introduction to the tax applications of both, which is expanded on in Chapter 18.

There’s more! This chapter provides an overview of how to prepare and analyze financial statement data. You discover the difference between costs and expenses and why the distinction is important. The chapter also provides a walk-through on managing cash and preparing a bank reconciliation, a topic you’ll definitely be tested on in your financial accounting course!

Even if you aren’t interesting in accounting for your own business, this chapter is loaded with information relevant to financial accounting homework and test questions. And since every financial accounting course includes at least one chapter about cost accounting, I also go through the necessary lingo to ace that part of your financial accounting class!