Recording and reporting of financial transactions, including the origination of the transaction, its recognition, processing, and summarization. Financial statements are prepared in the form of a balance sheet and profit and loss to summarize these transactions. For accounting to be useful it must be timely.
A period designated for the process to measure business transactions and transform the measurements into financial for a measure of time.
Accounting Principles Board (APB)
Senior technical committee of the AMERICAN INSTITUTE OF CERTIFIED PUBLIC ACCOUNTANTS (AICPA) which issued pronouncements on accounting principles from 1959-1973. The APB was replaced by the FINANCIAL ACCOUNTING STANDARDS BOARD (FASB).
Accounts Payable Subsidiary Ledger
A financial record of all individual accounts call creditors that a business owes.
This subsidiary ledger is represented by one account in the general called Account Payable Control.
Accounts Receivable Turnover
Used to measure a company’s ability to collect cash from credit customers. Formula: divide net sales by average net account receivable balance.
The recognition of an expense or revenue that has occurred but has not yet been recorded in the books of account.
The attempt to record the financial effects of transactions and other events in the periods in which those transactions or events occur rather than only in the periods in which cash is received or paid by the business,
Method of ACCOUNTING that recognizes REVENUE when earned, rather than when collected. Expenses are recognized when incurred rather than when paid.
An expense that has occurred but is not recognized in the accounts because it has not been paid as at the end of the accounting period..
Total DEPRECIATION pertaining to an ASSET or group of assets from the time the assets were placed in services until the date of the financial statements or tax return.
Profits that are not paid out as DIVIDENDS but are instead added to the company’s capital base. Companies do this to reserve cash for future expenditure.
Income Tax Returns Preparation for small business and individuals
DONE BY AN ENROLLED AGENT
Enrolled Agent (or EA) is not an employee or contractor of the IRS but is an individual who is a federally authorized tax practitioner empowered by the U.S. Department of the Treasury. Enrolled Agents represent taxpayers before the Internal Revenue Service (IRS) for tax issues including audits, collections and appeals.
Enrolled agent status is the highest credential awarded by the IRS. The EA credential is recognized across all 50 U.S. states. Attorneys and certified public accountants (CPAs) are licensed on a state by state basis, and are also empowered by the Department of the Treasury to represent taxpayers before the IRS.
IRS INFORMATION ON ENROLLED AGENTS
"An enrolled agent is a person who has earned the privilege of representing taxpayers before the Internal Revenue Service by either passing a three-part comprehensive IRS test covering individual and business tax returns, or through experience as a former IRS employee. Enrolled agent status is the highest credential the IRS awards. Individuals who obtain this elite status must adhere to ethical standards and complete 72 hours of continuing education courses every three years.