If you’re using QuickBooks Online as your bookkeeping tool, but you’re not keeping track of your fixed assets, you’re missing an important step in helping reduce your tax burden. This article includes step-by-step instructions on how to record fixed assets in QuickBooks Online.
Usually, around the last week of January, I receive panicked emails about missing W-9 forms, missing social security numbers, or vendors who simply refuse to fill out W-9s. If this is you, do not worry. In this article, I have…
Amortization is similar to depreciation but focuses on the costs of intangible assets. It allows businesses to account for the cost of intangible assets over time. Intangible assets are non-physical assets that are expected to provide value to a business for more than a year. The most common way to amortize is to divide the cost of an intangible asset over the number of years you expect it to provide value to your business.
Accrual accounting records a monetary transaction when the good or service is delivered—so when you send an invoice or receive a bill. Cash accounting records monetary transactions when the money actually moves—so when bills or invoices are paid. Cash accounting can be preferable for tax purposes since you’re only taxed on the money you’ve actually received. Accrual accounting can make your revenue look more steady since it doesn’t represent time lag in payments.
Dividend payments do not count as an expense! In order to account for dividend payments, you must use a Statement of Retained Earnings. The statement of retained earnings is a bridge between the income statement and the balance sheet, subtracting your dividend payments from the net income in order to calculate the retained earnings.