ACCOUNTING ADVISE - GAAP and OCBOA

ACCOUNTING ADVICE

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Here’s some accounting advice.

The purpose of this site is to provide practical how-to comments.

About the author: Jack Le Moine, CPA has over 20 years experience and manages an accounting firm in Atlanta, Georgia. More information about him is on our web site.

This site is not a complete accounting course. Nor will it keep up with every latest accounting pronouncement, though we will keep it current. We recommend some books that will do this.

What we will discuss:

Major areas of concern to bookkeepers and accountants.

Practical tips for the working accountant.

Background information on accounting topics.

Recommendations on book purchases..

Links to other useful sites.

About that last item: When we do a search on “accounting” or “GAAP”, up comes lists of thousands of web sites. Most are commercial entities that want to sell you something. Few give how-to information. The links page will provide a short list of links to sites that the authors have found to be useful. This page not only gives you the links but also tells you why we found them useful and what to look for on these sites.

Here is our Table of Contents. You don’t need to click on the pages in any particular order. Just click on the topics that interest you.

TOPIC	DESCRIPTION
BACKGROUND
History of Accounting	It started with a Franciscan monk in the time of Columbus.
GAAP vs. OCBOA	Generally Accepted Accounting Principles vs. Other Comprehensive Basis of Accounting.
Types of Accountants	What is the difference between a bookkeeper and an accountant?
International Accounting	Globalization hits accounting and more mundane stuff like currency differences.
The Future of Accounting	We extrapolate current trends and gaze into Kathy's crystal ball.
BASIC INFORMATION
The Financial Statements	These are what it's all for. What are they and what do they do?
Assets, Liabilities, and Equity	These are the basic parts of the Balance Sheet.
More Debits Than Credits	This is the most important and the most difficult concept in all of accounting. Are you ready for Accounting Boot Camp?
Double Entry Bookkeeping	Here's where we put those debits and credits to work!
Software for Accounting	We opine on the major brands and give you some tips.
GENERAL BOOKKEEPING
Accounts Receivable and Payable	These are what customers owe you and what you owe vendors but how do you keep track?
Depreciation	Judi takes on Jack. How can two people argue about such a simple thing as this?
Inventory	It shows up on the Balance Sheet and in the Cost of Goods Sold. Welcome to the world of LIFO, FIFO and % of Sales!
Leases	Do you capitalize or just expense them? And if you must put them on the Balance Sheet, where do you get a value for them?
Payroll	It would be so easy if it just weren't for all of those pesky deductions!
ASSETS
Cash	This is the most important and sensitive item in the Financials.
Other Current Assets	What are current assets and what do you do with them?
Fixed Assets	We suggest a list for the major categories.
Investments	The major issue here is realized and unrealized gains and losses.
Intangible Assets	Patent Rights, Goodwill, and Start Up Costs are examples. Amortize Intangible Assets.
LIABILITIES AND EQUITY
Current Liabilities	Short term debts and the mysteries of accrued expenses.
Long Term Debt	Amortization is the name of this game.
Equity	Users can tell a lot about the organization of the entity by looking at the Equity Section.
Different Kinds of Companies	One of the most important decisions management can make is the form of organization.
THE INCOME STATEMENT
Revenue	These are the total earnings for the period (unlike net income).
Expenses	Our rule here is: Keep It Simple!
Cost of Goods Sold	This also covers "Cost of Sales" and "Gross Profit."
Automobile Costs	Accounting for autos can be tricky. The main thing is to keep those log books!
Gains/Losses on Asset Disposals	How to account for assets when you get rid of them.
ACCOUNTANT'S TOOLBOX
The Workbook	The key to controlling your accounting system is to organize your paperwork.
General Ledger Reports	They are the heart of the accounting system. It shows what went on for each line item in the financial statements.
Adjusting Entries	What to consider? Read on.
Journals	The accountant's diary. They form the link from the receipts to the books.
COST ACCOUNTING
Methods of	Job Cost, Process Cost, and Activity Based Cost Accounting Methods.
Manufacturing	Where inventory aren't bought but made.
Overhead	This is like cancer. It will grow to kill the company unless controlled. Step One: Keep track of it's amount.
Construction	When to recognize revenue and expenses? And then how much?
Government Contracting	Under Construction.
OTHER TOPICS
Ratio Analysis	Under Construction.
Combining Companies	Under Construction.
Non-Profit Accounting	The entire concept of profit and loss is gone. This is Non-Profit Accountingdom! The entire base of accounting is different here.
Auditing: The Expectation Gap	Under Construction.

Parting Comment

Independent accountants: what to look for.

People who will care about you.

Competent.

Finish your work on time.

Respond to your questions.

Proactive – will suggest ways to save you money on taxes, etc.

They don’t need to be local. In this day of faxes, e-mail, and overnight air express, proximity isn’t as important as it used to be. While there is still a comfort in being able to go to a person’s office and harangue him/her in person for screwing up, it is much better to have a good accountant in the first place.

When engaging the services of a CPA or other accountant for your accounting and tax needs, think more of how good they are rather than how close to you they are.