Yale Fishman NY – Bookkeeping Basics
Most people probably think of bookkeeping and accounting as the same thing, but bookkeeping is really one function of accounting, while accounting encompasses many functions involved in managing the financial affairs of a business. Yale Fishman Associates report that accountants prepare reports based, in part, on the work of bookkeepers.
According to Yale Martin Fishman bookkeepers perform all manner of record-keeping tasks. Some of them include the following:
- They prepare what are referred to as source documents for all the operations of a business – the buying, selling, transferring, paying and collecting. Yale Fishman explains that these documents include papers such as purchase orders, invoices, credit card slips, time cards, time sheets and expense reports. Bookkeepers also determine and enter in the source documents what are called the financial effects of the transactions and other business events. Those include paying the employees, making sales, borrowing money or buying products or raw materials for production.
- Bookkeepers also make entries of the financial effects into journals and accounts. These are two different things. A journal is the record of transactions in chronological order. An accounts is a separate record, or page for each asset and each liability. One transaction can affect several accounts.
- Bookkeepers prepare reports at the end of specific period of time, such as daily, weekly, monthly, quarterly or annually. In fact Mr. Yale Fishman explains that to do this, all the accounts need to be up to date. Inventory records must be updated and the reports checked and double-checked to ensure that they’re as error-free as possible.
- The bookkeepers also compile complete listings of all accounts. This is called the adjusted trial balance. While a small business may have a hundred or so accounts, very large businesses can have more than 10,000 accounts.
- The final step is for the bookkeeper to close the books, which means bringing all the bookkeeping for a fiscal year to a close and summarized.
Personal Accounting by Yale M Fishman Attorney
If you have a checking account, of course you balance it periodically to account for any differences between what’s in your statement and what you wrote down for checks and deposits. Yale M Fishman starts by saying that many people do it once a month when their statement is mailed to them, but with the advent of online banking, you can do it daily if you’re the sort whose banking tends to get away from them.
You balance your checkbook to note any charges in your checking account that you haven’t recorded in your checkbook. Some of these can include ATM fees, overdraft fees, special transaction fees or low balance fees, if you’re required to keep a minimum balance in your account. You also balance your checkbook to record any credits that you haven’t noted previously. They might include automatic deposits, or refunds or other electronic deposits. Your checking account might be an interest-bearing account and you want to record any interest that it’s earned.
You also need to discover if you’ve made any errors in your recordkeeping or if the bank has made any errors, notes Yale Fishman Attorney.
Another form of accounting that we all dread is the filing of annual federal income tax returns. Yale Fishman ESQ explains that many people use a CPA to do their returns; others do it themselves. Most forms include the following items:
- Income – any money you’ve earned from working or owning assets, unless there are specific exemptions from income tax.
- Personal exemptions – this is a certain amount of income that is excused from tax.
- Standard deduction – some personal expenditures or business expenses can be deducted from your income to reduce the taxable amount of income. These expenses include items such as interest paid on your home mortgage, charitable contributions and property taxes.
- Taxable income – This is the balance of income that’s subject to taxes after personal exemptions and deductions are factored in.