Founded by a former IRS Agent

Founded by a former IRS Agent

Most Common Bookkeeping Questions

July 7, 2015

Most Common Bookkeeping Questions

Bookkeeping FAQs

#1: What Is Accounts Payable?

Accounts payable is the section of your ledger that must be paid out to vendors for your business. You make payments on these accounts to fulfill your obligations to your vendors, and you will have accounts payable paying out to many different companies at once. Consultants, supply companies, temp agencies and other companies all have a business relationship with you wherein you pay for their services. You must handle your accounts payable in a timely manner for the sake of your credit and reputation.

#2: What Is Payroll Accounting?

You must use a bookkeeping service to handle all your payroll every month. Payroll is not the simple act of writing out checks to everyone who works for the business. Each paycheck has many different line items that must be accounted for before the checks are cut. The people that work for you are using sick days, vacations and paid time off in their checks. The paychecks have deductions for insurance and retirement accounts, and the paychecks have taxes taken out that you submit to the government on behalf of all your employees. A payroll accountant knows how reconcile each paycheck before it is written, and you will have a record of all the different items appearing on each paycheck.

#3: What Are Debits And Credits?

Debits and credits are two sides of the same coin. You are debiting your accounts when you make payments. The payroll account is debited every time you write a payroll check, but your business is credited every time you are paid for a service. Your credits should be higher than your debits by the end of the year if you want to make a profit, and you must check on all debits taken from your accounts. You need to know where your money is going if you want to spend it wisely.

#4: What Are Sundry Expenses?

Sundry expenses are typically paid for with petty cash, and each sundry expense is extremely small. Sundry expenses may be covered by a small line item in the budget made just for petty cash, and sundry expenses may include the dinner you took all your clients to after signing a big deal. You need to have a record of all your sundry expenses, and you must ensure that all the sundry expenses are calculated for your corporate tax return.

Sundry expenses may include travel expenses for your employees, and a sundry expenses could be the flowers your office bought for someone who is pregnant or engaged. You must ensure that you know how many expenses are coming out, and a good bookkeeper is going to watch the sundry expenses carefully.

#5: What Is The Difference Between Expenses And Payments?

Payments for your business go out to companies that you have partnered with for their goods and services. You may payments to a company where you learn bookkeeping online, but you will deduct the expenses required for the books and supplies. Expenses for your business are not planned, and the occur during the course of a work day. Expenses may begin at food or gas, but expenses extend to any unexpected cost you have. The payments coming from your business are expected, and you know exactly how much you will need to pay to cover the payment. Learning about bookkeeping will help you manage the money at your company.

You must understand what you are doing when you are assisting the bookkeeper, or you can go to someone and ask about help from a bookkeeping service in Glendale that may help you with the books.

It’s time to schedule an appointment with Pogosian Nazaryan & Company.