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Accounting Definitions

Contra Account: A contra account is used in a general ledger to reduce the value of a related account when the two are netted together. A contra account's natural balance is the opposite of the ass...

Journal Entries for Partnerships

"Anytime a partner invests in the business the partner receives capital or ownership in the partnership. You will have one capital account and one withdrawal (or drawing) account for each partner....

Chapter 5: The Cash Flow Statement

Reports the company's cash in and cash out over a certain period. It is not the same as the income statement 1. Income and expense may be recorded at a different time than when the cash is actually...

  • Updated 4 months ago by vince
T-Accounts

These are used to show activity in a single account over a time period Often a T-account will include the beginning and ending balances Inventory --------...

  • Updated 4 months ago by vince
The General Ledger

Where all journal entries are recorded Usually on accounting software but you can also just use a spreadsheet Extremely important document since a company's financial statements are created from this

  • Updated 4 months ago by vince
Chapter 8: Debits and Credits

For a bank account a debit means decrease and credit means increase -- this is not always true in accounting. A debit or credit to an account can increase or decrease it depending on the type of ac...

Chapter 4: Statement of Retained Earnings

Retrained earnings are the company's undistributed profits over the existence of the company (i.e. dividends that have not been distributed). The statement of retained earnings shows changes in the...

Chapter 3: The Income Statement

This shows the company's financial performance over a period, usually one year A balance sheet is like a photo and an income statement is like a video Also called a Profit and Loss (P&L) statement ...

Accounting 101 with Jimmy Stewart Podcast

Excellent way to learn accounting while driving https://podcasts.apple.com/us/podcast/accounting-101-with-jimmy-stewart/id1435806790 It's also available as an ebook https://www.amazon.com/Fundamen...

Chapter 2: The Balance Sheet

A company's balance sheet is it's financial situation at a particular time. It is just a formal presentation of the Accounting Equation (/7/chapter-1-the-accounting-equation) | Balance Sheet ...

Chapter 1: The Accounting Equation

A = L + E Assets: All property owned by the company Liabilities: All debts the company has outstanding to lenders Equity: The company's ownership interest in assets after debts are paid For example...

Accounting Made Simple

Accounting is a system to track the income, expenses, assets, and debts of a business A business's accounting records tell the true story of a business -- you can learn practically anything about a...

One-State Sales Exemption

Offer and sale of securities is made within one state only. You don't need to file with the federal SEC you have to qualify for a state exemption or register the sale with the state securities agency

Regulation D Exemption

This is a more complicated version of the private offering exemption and requires filing formal exemption paperwork. follow requirements in federal Regulation D statute file Form D with the SEC Ge...

Private Offering Exemption

A private sale of securities, without advertising, to a small group of people (less than 35) is often eligible for a "private offering" exemption. The LLC has a better chance of being eligible for ...

How LLCs report and pay state taxes

Most states follow federal lead and classifies the LLC the same as the IRS. Just as with the IRS the members pay state income taxes, assuming you state has income taxes. Even if the LLC won't have ...

Voting rights

Specify this in your operating statement so the LLC doesn't have to use the state's default which may not be what the members want - for example does each member get an equal vote or it is based on...

Securities law

If the LLC is manager managed interest in the LLC may be classified as securities since non managing members may be investing money in a business they are not actively participating in. Generally w...

Manager Management

Select manager management in your articles or operating agreement. An LLC can be managed by a single or group of managers from: one or more members one or more non-members a combination of the two ...

Member Management

All members manage the LLC. This is common because many LLCs are small and all members are active in the business