Bookkeeping Workbook For Dummies

If you're preparing for The American Institute of Professional Bookkeepers' (AIPB) bookkeeping certification test, you need an easy- to-follow test-preparation guide that gets you up to speed quickly in all of the bookkeeping basics, from setting up a company's books and recording transactions to managing employee payroll, handling government paperwork, and closing out the books. You need Bookkeeping Workbook For Dummies . With demonstration problems, complementary examples, and multiple-choice questions you'll find in this user-friendly primer, you'll sharpen your bookkeeping skills for the real world as you increase your ability to perform well on any test. Chapter quizzes let check your progress as you go, and step-by-step answers show you where you went wrong (or right) each problem. You'll feel your confidence —and competence—growing as you learn how to: Perform a wide variety of financial transactions Use key concepts and skills with real-world bookkeeping problems Design a bookkeeping system Track day-to-day business operations Keep journals for active accounts Use blank working papers and spread sheets Handle cash entries and develop internal controls Calculate and pay employee withholding taxes Depreciate assets Prove out your books at year's end Prepare tax returns as set up for a new year Complete with Top Ten lists for managing cash, monitoring accounts, and finding additional helpful resources, Bookkeeping Workbook For Dummies is the test-prep guide you need to help you ace the certification test and speed your way into a successful and rewarding career. Bookkeeping Workbook for Dummies 6 About the Author 8 Dedication 10 Author’s Acknowledgments 10 Contents at a Glance 12 Table of Contents 14 Introduction 18 About This Book 18 Foolish Assumptions 19 How This Book Is Organized 19 Icons Used in This Book 20 Where to Go from Here 21 Part I: Exploring Bookkeeping Basics 22 Chapter 1: Deciphering the Basics 24 Using Cash or Accrual Method 24 Sorting Out Assets, Liabilities, and Equity 29 Tracking the Daily Finances 31 Testing Your Work 31 Naming the Financial Statements 31 Keeping a Paper Trail 33 Answers to Problems on Deciphering the Basics 34 Chapter 2: Designing Your Bookkeeping System 36 Introducing the Accounts 36 Cycling Through the Bookkeeping Process 41 Seeing Double with Double-Entry Bookkeeping 43 Differentiating Between Debits and Credits 45 Answers to Problems on Designing Your Bookkeeping System 47 Chapter 3: Sorting Out Your Business Road Map 50 Charting Your Accounts 50 Detailing Your Balance Sheet Accounts 52 Tracking Your Income Accounts 57 Setting Up Your Accounts Road Map 61 Answers to Problems on Sorting Out Your Business Road Map 63 Part II: Putting it All on Paper 64 Chapter 4: Looking at the Big Picture 66 Preparing the Core of Your Financial Details 66 Developing Entries for the Ledger 68 Posting Your Entries 72 Adjusting for Errors 76 Answers to Problems on Looking at the Big Picture 77 Chapter 5: Journaling — The Devil’s in the Details 80 Defining Your Journals 80 Tracking Cash 81 Managing Sales 86 Watching Purchases 87 Dealing with Miscellaneous Transactions 88 Answers to Problems on Journaling — The Devil’s in the Details 91 Chapter 6: Designing Controls for Your Books, Your Records, and Your Money 96 Getting a Handle on Cash 96 Organizing Your Record Keeping 102 Protecting Your Business from Theft and Fraud 104 Taking Out a Bond 105 Answers to Problems on Designing Controls for Your Books, Your Records, and Your Money 106 Part III: Tracking Day-to-Day Business Operations with Your Books 108 Chapter 7: Purchasing Goods and Tracking Your Purchases 110 Detailing and Managing Your Inventory 110 Paying Your Bills 116 Answers to Problems on Purchasing Goods and Tracking Your Purchases 118 Chapter 8: Calculating and Monitoring Sales 120 Taking in Cash 120 Selling on Credit 125 Checking Your Register 129 Discounting Sales 131 Recording Sales Returns and Allowances 135 Monitor Collections from Your Customers 138 Writing Off Bad Accounts 139 Answers to Problems on Calculating and Monitoring Sales 141 Chapter 9: Paying Your Employees 144 Setting Up Payroll 144 Collecting Employee Payroll Taxes 147 Figuring Out Net Pay 149 Calculating Payroll 149 Depositing Taxes 153 Answers to Problems on Paying Your Employees 155 Chapter 10: Paying Employer Taxes and Completing Related Government Reports 158 Paying Social Security and Medicare Taxes 158 Filing Unemployment Reports and Paying Taxes 160 Covering Workman’s Compensation 162 Maintaining Employee Records 164 Answers to Problems on Paying Employer Taxes and Completing Related Government Reports 165 Part IV: Getting Ready for Year’s (Or Month’s) End 166 Chapter 11: Depreciating Your Assets 168 Understanding Depreciation 168 Depreciating Your Assets 172 Setting Schedules 175 Recording Depreciation Expenses 175 Answers to Problems on Depreciating Your Assets 176 Chapter 12: Paying and Collecting Interest 178 Determining Interest Types 178 Determining Interest on Debt 180 Recording Interest on Short-term Debt 183 Separating and Paying Interest on Debt 185 Booking Interest Income 186 Answers to Problems on Paying and Collecting Interest 187 Chapter 13: Proving Out Your Books 190 Checking Cash 190 Closing Journals 191 Reconciling Bank Accounts 195 Posting to the Ledger 198 Answers to Problems on Proving Out Your Books 199 Chapter 14: Checking and Correcting Your Books 202 Doing a Trial Balance Worksheet 202 Making Adjustments 206 Reworking Your Chart of Accounts 212 Answers to Problems on Checking and Correcting Your Books 214 Part V: Putting on Your Best Financial Face 218 Chapter 15: Showing Everything’s in Balance 220 Exploring the Balance Sheet 220 Gathering the Numbers 220 Preparing the Statement for Prime Time 222 Working with Your Balance Sheet Numbers 228 Answers to Problems on Showing Everything’s in Balance 234 Chapter 16: Proving Your Profits 238 Exploring the Income Statement 238 Formatting the Income Statement 240 Preparing the Numbers 242 Analyzing Your Income Results 244 Answers to Problems on Proving Your Profits 248 Chapter 17: Doing Your Business Taxes 250 Exploring Business Types 250 Tax Reporting 252 Determining Sales Taxes 255 Answers to Problems on Doing Your Business Taxes 256 Chapter 18: Getting Ready for a New Bookkeeping Year 258 Finalizing the Ledger 258 Reviewing Customer Accounts 260 Assessing Vendor Accounts 261 Deleting Accounts 262 Preparing to Restart Business Cycle 263 Answers to Problems on Getting Ready for a New Bookkeeping Year 265 Part VI: The Part of Tens 266 Chapter 19: Top Ten Checklist for Managing Your Cash 268 Charting the Way 268 Balancing Your Entries 268 Posting Your Transactions 269 Tracking Customer Collections 269 Paying Bills Accurately and on Time 269 Planning Profits 269 Comparing Budget to Actual Expenses 269 Comparing Sales Goals to Actual Sales 270 Tracking Cost Trends 270 Making Pricing Decisions 270 Chapter 20: Top Ten Accounts You Should Monitor 272 Cash 272 Accounts Receivable 272 Inventory 272 Accounts Payable 273 Loans Payable 273 Sales 273 Purchases 273 Payroll Expenses 273 Office Expenses 274 Owner’s Equity 274 Retained Earnings 274 Chapter 21:Top Ten Problems You Should Practice 276 Identifying Accounts and Using Double-Entry Bookkeeping 276 Keeping Journals 276 Paying Bills and Managing Inventory 276 Tracking Sales 277 Testing Your Balance 277 Reporting Income 277 Closing the Books and Starting Over 277 Index 278 Bookkeeping Workbook for Dummies......Page 6 About the Author......Page 8 Author’s Acknowledgments......Page 10 Contents at a Glance......Page 12 Table of Contents......Page 14 About This Book......Page 18 How This Book Is Organized......Page 19 Icons Used in This Book......Page 20 Where to Go from Here......Page 21 Part I: Exploring Bookkeeping Basics......Page 22 Using Cash or Accrual Method......Page 24 Sorting Out Assets, Liabilities, and Equity......Page 29 Naming the Financial Statements......Page 31 Keeping a Paper Trail......Page 33 Answers to Problems on Deciphering the Basics......Page 34 Introducing the Accounts......Page 36 Cycling Through the Bookkeeping Process......Page 41 Seeing Double with Double-Entry Bookkeeping......Page 43 Differentiating Between Debits and Credits......Page 45 Answers to Problems on Designing Your Bookkeeping System......Page 47 Charting Your Accounts......Page 50 Detailing Your Balance Sheet Accounts......Page 52 Tracking Your Income Accounts......Page 57 Setting Up Your Accounts Road Map......Page 61 Answers to Problems on Sorting Out Your Business Road Map......Page 63 Part II: Putting it All on Paper......Page 64 Preparing the Core of Your Financial Details......Page 66 Developing Entries for the Ledger......Page 68 Posting Your Entries......Page 72 Adjusting for Errors......Page 76 Answers to Problems on Looking at the Big Picture......Page 77 Defining Your Journals......Page 80 Tracking Cash......Page 81 Managing Sales......Page 86 Watching Purchases......Page 87 Dealing with Miscellaneous Transactions......Page 88 Answers to Problems on Journaling — The Devil’s in the Details......Page 91 Getting a Handle on Cash......Page 96 Organizing Your Record Keeping......Page 102 Protecting Your Business from Theft and Fraud......Page 104 Taking Out a Bond......Page 105 Answers to Problems on Designing Controls for Your Books, Your Records, and Your Money......Page 106 Part III: Tracking Day-to-Day Business Operations with Your Books......Page 108 Detailing and Managing Your Inventory......Page 110 Paying Your Bills......Page 116 Answers to Problems on Purchasing Goods and Tracking Your Purchases......Page 118 Taking in Cash......Page 120 Selling on Credit......Page 125 Checking Your Register......Page 129 Discounting Sales......Page 131 Recording Sales Returns and Allowances......Page 135 Monitor Collections from Your Customers......Page 138 Writing Off Bad Accounts......Page 139 Answers to Problems on Calculating and Monitoring Sales......Page 141 Setting Up Payroll......Page 144 Collecting Employee Payroll Taxes......Page 147 Calculating Payroll......Page 149 Depositing Taxes......Page 153 Answers to Problems on Paying Your Employees......Page 155 Paying Social Security and Medicare Taxes......Page 158 Filing Unemployment Reports and Paying Taxes......Page 160 Covering Workman’s Compensation......Page 162 Maintaining Employee Records......Page 164 Answers to Problems on Paying Employer Taxes and Completing Related Government Reports......Page 165 Part IV: Getting Ready for Year’s (Or Month’s) End......Page 166 Understanding Depreciation......Page 168 Depreciating Your Assets......Page 172 Recording Depreciation Expenses......Page 175 Answers to Problems on Depreciating Your Assets......Page 176 Determining Interest Types......Page 178 Determining Interest on Debt......Page 180 Recording Interest on Short-term Debt......Page 183 Separating and Paying Interest on Debt......Page 185 Booking Interest Income......Page 186 Answers to Problems on Paying and Collecting Interest......Page 187 Checking Cash......Page 190 Closing Journals......Page 191 Reconciling Bank Accounts......Page 195 Posting to the Ledger......Page 198 Answers to Problems on Proving Out Your Books......Page 199 Doing a Trial Balance Worksheet......Page 202 Making Adjustments......Page 206 Reworking Your Chart of Accounts......Page 212 Answers to Problems on Checking and Correcting Your Books......Page 214 Part V: Putting on Your Best Financial Face......Page 218 Gathering the Numbers......Page 220 Preparing the Statement for Prime Time......Page 222 Working with Your Balance Sheet Numbers......Page 228 Answers to Problems on Showing Everything’s in Balance......Page 234 Exploring the Income Statement......Page 238 Formatting the Income Statement......Page 240 Preparing the Numbers......Page 242 Analyzing Your Income Results......Page 244 Answers to Problems on Proving Your Profits......Page 248 Exploring Business Types......Page 250 Tax Reporting......Page 252 Determining Sales Taxes......Page 255 Answers to Problems on Doing Your Business Taxes......Page 256 Finalizing the Ledger......Page 258 Reviewing Customer Accounts......Page 260 Assessing Vendor Accounts......Page 261 Deleting Accounts......Page 262 Preparing to Restart Business Cycle......Page 263 Answers to Problems on Getting Ready for a New Bookkeeping Year......Page 265 Part VI: The Part of Tens......Page 266 Balancing Your Entries......Page 268 Comparing Budget to Actual Expenses......Page 269 Making Pricing Decisions......Page 270 Inventory......Page 272 Payroll Expenses......Page 273 Retained Earnings......Page 274 Paying Bills and Managing Inventory......Page 276 Closing the Books and Starting Over......Page 277 Index......Page 278 If you're preparing for The American Institute of Professional Bookkeepers' (AIPB) bookkeeping certification test, you need an easy- to-follow test-preparation guide that gets you up to speed quickly in all of the bookkeeping basics, from setting up a company's books and recording transactions to managing employee payroll, handling government paperwork, and closing out the books. You need Bookkeeping Workbook For Dummies.

With demonstration problems, complementary examples, and multiple-choice questions you'll find in this user-friendly primer, you'll sharpen your bookkeeping skills for the real world as you increase your ability to perform well on any test. Chapter quizzes let check your progress as you go, and step-by-step answers show you where you went wrong (or right) each problem. You'll feel your confidence —and competence—growing as you learn how to:

• Perform a wide variety of financial transactions
• Use key concepts and skills with real-world bookkeeping problems
• Design a bookkeeping system
• Track day-to-day business operations
• Keep journals for active accounts
• Use blank working papers and spread sheets
• Handle cash entries and develop internal controls
• Calculate and pay employee withholding taxes
• Depreciate assets
• Prove out your books at year's end
• Prepare tax returns as set up for a new year

Complete with Top Ten lists for managing cash, monitoring accounts, and finding additional helpful resources, Bookkeeping Workbook For Dummies is the test-prep guide you need to help you ace the certification test and speed your way into a successful and rewarding career.

Master the art of bookkeeping with this valuable study guideIf you're preparing for The American Institute of Professional Bookkeepers'(AIPB) bookkeeping certification test, you need an easy- to-follow test-preparation guide that gets you up to speed quickly in all of the bookkeeping basics, from setting up a company's books and recording transactions to managing employee payroll, handling government paperwork, and closing out the books. You need Bookkeeping Workbook For Dummies. With demonstration problems, complementary examples, and multiple-choice questions you'll find in this user-friendly primer, you'll sharpen your bookkeeping skills for the real world as you increase your ability to perform well on any test. Chapter quizzes let check your progress as you go, and step-by-step answers show you where you went wrong (or right) each problem. You'll feel your confidence —and competence—growing as you learn how to: Perform a wide variety of financial transactions Use key concepts and skills with real-world bookkeeping problems Design a bookkeeping system Track day-to-day business operations Keep journals for active accounts Use blank working papers and spread sheets Handle cash entries and develop internal controls Calculate and pay employee withholding taxes Depreciate assets Prove out your books at year's end Prepare tax returns as set up for a new year Complete with Top Ten lists for managing cash, monitoring accounts, and finding additional helpful resources, Bookkeeping Workbook For Dummies is the test-prep guide you need to help you ace the certification test and speed your way into a successful and rewarding career. A test-preparation guide for The American Institute of Professional Bookkeepers' (AIPB) bookkeeping certification test. It covers various bookkeeping basics, from setting up a company's books and recording transactions to managing employee payroll, handling government paperwork, and closing out the books.