A fancy term. Used really to create an easier way to track expenses and costs that are associated with a SPECIFIC department, location, property, event, or project. Think of a construction company that does new house build outs and remodels. Class tracking will help with organization and details, specific to those departments.
Independent contractors are self-employed, while employees perform services that can be controlled by an employer (what will be done and how it will be done). The employer has the legal right to control the details of how the services are performed by an employee. If an employer-employee relationship exists (regardless of what the relationship is called), workers are not independent contractors and their earnings are generally not subject to Self-Employment Tax. An employer must withhold income taxes and pay Social Security, Medicare taxes, and unemployment tax on wages paid to an employee. Independent contractors receive a form 1099 at the end of the year, which reports to the IRS how much money was paid to the contractor. In contrast, employees receive a W-2.
These break down the depreciation of the firm’s long-term assets. They calculate the depreciation expense for each asset and allocate the cost of each asset over its useful life. Accountants use these schedules not only to compute the
You can also say GL. This is essentially the place where all the financial info is stored, sorted, and digested. Think of this as a book, and the chart of accounts as the table of contents section. Contains a debit and credit entry for every transaction recorded within it, so that the total of all debit balances in the general ledger should always match the total of all credit balances. If they do not match, the general ledger is said to be out of balance and must be corrected before reliable financial statements can be compiled from it.
A journal entry is a recording of a transaction into a journal like the general journal. Journal entries for accounting require that there be a debit and a credit in equal amounts. Oftentimes, an explanation for the transaction will be included. The transaction affects both the balance sheet and income statement.
Nothing specifically different for non-profits versus for-profits outside of the fact that non-profits are REQUIRED to get financial reviews and audits at certain thresholds. It varies state by state, so keep that in mind. Here’s a good resource to check in a pinch: Non-Profit Audit and Financial Review Check. Also, the term 501C3 will be used instead of non-profit. That’s just the IRS code indicating it’s a non-profit.
Making sure the numbers sync up across the board. Typically, it means making sure the accounting software and bank accounts are showing the same numbers. Balancing a checkbook! Reconciliations confirm whether the money leaving an account matches the amount that's been spent, and allows you to make sure the two are balanced at the end of the recording period. Differences may include uncleared deposits/checks, bank service charges, etc.
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