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Aaron Woolley

Aaron Woolley

Bookkeeping Basics

Slide Duration:

Table of Contents

I. Introduction
Bookkeeping Basics

10m 25s

Intro
0:00
The Accounting Equation
0:10
Assets
1:15
Liability
2:19
Equity
3:11
Debit vs. Credit
4:10
T Account
4:40
How Your Bank Treats Your Account
5:02
Your Books
6:08
Chart of Accounts
7:15
Balance Sheet Accounts: Assets
7:25
Balance Sheet Accounts: Liability
7:40
Balance Sheet Accounts: Equity
8:22
Income Statement Accounts
9:03
Income
9:06
Expenses
9:26
Net Income
9:48
Getting Started

16m 34s

Intro
0:00
Using Forms
0:13
How to Edit Customer Form
1:06
How to Edit Vendor Form
1:37
Using Lists
2:34
Customer Lists
2:39
Vendor Lists
2:47
Employees Lists
2:59
Using Registers
3:16
Check Register
3:22
Chart of Accounts
3:40
How to Use Register
6:27
Getting Around QuickBooks
7:54
Navigating Through the Home Screen
8:08
Managing Employees
9:59
Managing Open Windows
11:23
The Menu Bar
12:02
The Icon Bar
12:28
QuickBooks Centers
12:50
Customers, Vendors, Employees Center
12:53
Banking Center
13:06
Report Center
13:38
Lead Center
13:46
Search Information
14:17
How to Search for Information on a Customer
14:28
The Homepage & Workflow
15:12
The Chart of Accounts: Assets, Liabilities, Equity
15:37
How to Access Chart of Accounts
15:45
Setting Up QuickBooks

20m 51s

Intro
0:00
The Express Start
0:23
Create New Company
0:49
Entering Company Information
0:55
Enter Business Contact
2:24
Preferences
4:16
Adding Contacts
4:22
Adding Products and Services
4:28
Adding Bank Accounts
5:26
Review the Chart of Accounts and Customize
6:10
Check Chart of Accounts Set Up
6:48
How to Add To Chart of Accounts
7:20
Entering Bank Accounts and Opening Balances
8:00
Edit New Bank Accounts
8:28
Add New Bank Accounts
8:52
How To Open Balance
9:58
Adding Customers
10:27
How to Add New Customers
11:05
Adding a Job
12:33
Add New Job For Customer
12:50
Adding Vendors
15:01
Access Vendor Center
15:17
Add New Vendor
15:33
Adding Additional Accounts
16:33
Adding New Accounts in Chart of Accounts
16:53
Adding Items (Products & Services)
18:06
Add New Item to Sell
18:45
II. Working With Lists
Working With Lists, Part 1

31m 24s

Intro
0:00
Editing The Chart of Accounts
1:08
Edit Account
5:10
Adding Subaccounts
6:17
New Subaccount
7:50
Working with Customers & Job Lists
11:32
Add new customer
13:25
Providing Additional Customer Information
17:50
Providing Customer Payment Information
22:10
Working with the Vendor Center
24:08
Add new vendor
25:50
Providing Additional Vendor Information
28:28
Working With Lists, Part 2

46m 1s

Intro
0:00
Working with the Employee Center
0:24
Add new employee
2:01
Add contact information
4:02
Additional employee information
5:31
Employment information
6:26
Adding Custom Fields for Customers, Vendors, Employee List
7:28
How Many Lists You Can Add And For Who
8:46
How to Add Customer List
9:35
Define Fields
10:37
Adding Custom Fields for Items
13:26
Open Item List and Edit
14:15
Define Fields/ Setup Custom Fields For Items
15:54
Managing Lists
17:01
Ways to Sort Lists
17:14
Add Items to Chart of Accounts
17:32
Add Owner's Equity, Draw, and Contribution under Equity Account
17:59
Sorting Lists Manually
19:31
Making Sub Accounts
20:35
Sorting Lists
23:26
Sorting Lists in Ascending or Descending Order
23:54
Sort by Name, Balance, etc., Ascending or Descending
24:26
Merging List Items
26:08
Merging Vendor Example
26:53
Renaming List Items
28:55
Renaming Item Example: Checking Account
29:13
Deleting List Items
29:56
Deleting Customer Example
31:19
Viewing Inactive and Active Customers
32:32
Printing a List
33:26
Printing Customer List
33:58
Printing for Just One Customer
34:40
Print Particular Info for One Customer
35:08
Adding or Editing Multiple Items at One Time
37:04
Example: Changing a Zip code
37:39
Working with the Lead Center
41:43
Finding the Lead Center
42:09
Add New Leads
43:05
Add Multiple Contacts to Lead Center
44:34
Convert a Lead to a Customer
45:16
III. Accounts
Working With Bank Accounts

29m 11s

Intro
0:00
Writing a QuickBooks Check
0:30
Amount field
3:59
Other fields
5:27
Print check
7:00
Using Bank Account Register
7:40
Entering a Handwritten Check
9:45
Transferring Money Between Accounts
16:33
Funds Transfer Option
17:24
Transfer with Check Register
19:18
Marking Cleared Transactions
20:57
Bank Statement
23:31
Reconciliation Summary
26:11
Viewing Cleared Checks in the Register
27:05
Searching for Specific Check Amount
27:40
Using Other Accounts in QuickBooks

13m 25s

Intro
0:00
Other Account Types in QuickBooks
0:36
Tracking Credit Card Transactions - Entering Credit Card Charges
0:58
Reconciling Credit Card Statement
3:52
Reconcile Credit Card
5:00
Marking Cleared Transactions
5:57
Paying a Credit Card Bill
8:11
Entering Bills
8:34
Writing a Check
10:15
Using Other Accounts: Assets & Liabilities

30m 16s

Intro
0:00
Working with Asset Accounts: Setting up an Asset Account
1:24
Add New Account
2:30
Enter Opening Balance
4:34
Setup Asset Account to Track Depreciation
7:33
Add Subaccounts: Cost & Depreciation
10:32
Enter in Depreciation of Transactions
13:01
Working with Liability Accounts: Tracking a Loan / Long Term Liability
15:39
Add Long Term Liability / Loan Account
17:09
Tracking Fixed Assets
20:29
Add New Asset
21:36
Recording a Payment on a Loan
24:23
Understanding Equity Accounts
27:03
Add New Equity Account
29:20
IV. Sales Information
Entering Sales Information, Part 1

24m 23s

Intro
0:00
Using Sales Forms - Various Types of Sales Forms
0:07
Invoice Overview
0:56
Sales Receipt Overview
3:09
Generate Statement
4:38
Choosing a Template for Sales Forms
6:00
Filling in Customer Information
7:54
Create an Invoice
8:04
Invoice in Accounts Receivable Ledger
10:28
Repeating a Sale - Memorized Transactions
11:36
Memorize Invoice
12:52
Memorized Transaction List
14:01
Batch Invoices
14:55
Create Batch Invoice
15:21
Entering a New Service Item
20:13
Add new service
21:25
Entering Sales Information, Part 2

12m 33s

Intro
0:00
Using Multiple Price Levels - Create New Price Level
0:07
Create Price Level List
1:49
Associating Price Level with Customers
4:27
Edit Customer
5:53
Using Price Levels on Sales Forms
7:09
Choose Rate
8:56
Assigning Price Levels To Individual Line Items
10:38
Entering Sales Information, Part 3

22m 33s

Intro
0:00
Managing Overdue Customer Payments - Using the Collections Center
0:21
Collections Center
0:39
Create Invoice Letters
2:00
Prepare an Invoice Letter
3:09
Generating Reminder Statements
7:32
Assess Finance Charges
9:14
Preview Statement
9:42
Processing Sales Orders - Invoices Against Sales Orders
10:28
Open Sales Orders by Item
12:04
Create an Invoice
13:24
Tracking Back Orders
14:36
Create Invoice from Sales Order
16:37
Receiving Items
18:21
Check Item List / Inventory
19:22
Create Sales Order
19:58
V. Payments & Deposits
Receiving Payments & Making Deposits, Part 1

12m 40s

Intro
0:00
Recording Customer Payments - Record a Payment in Full for a Single Job
0:20
Receive Payments
0:40
Undeposited Funds Account
2:25
Entering a Partial Payment
3:42
Assign Payment
6:36
Applying One Payment to Multiple Jobs
8:10
Entering Overpayments
9:44
Leave or Refund Amount
10:51
Issue a Refund
11:28
Receiving Payments & Making Deposits, Part 2

15m 8s

Intro
0:00
Handling Down Payments or Pre-payments
0:07
Apply Credits
4:30
Making Deposits - Selecting Payments to Deposit
5:58
Payments to Deposit
6:26
Make Deposit
8:02
How QuickBooks Handles the Deposit
10:16
Entering & Paying Bills

22m 1s

Intro
0:00
Handling Bills in QuickBooks
0:23
Using QuickBooks for Accounts Payable
2:24
How to Bring up the Accounts Payable Register
3:04
Entering Bills
4:03
Enter New Bill
4:30
Add Vendor to List
6:29
See the Balance
8:48
Paying Bills
11:17
Turning on Reminder List
11:49
How to Pay a Bill
13:34
How to Print the Checks
16:21
How QuickBooks Records Your Bill Payment
17:08
How to See Your Checking Account / Bill Payment Check
18:38
VI. Analyzing Financial Data
Analyzing Financial Data, Part 1

11m 42s

Intro
0:00
Understanding Your Business Using Reports
0:11
When to Use a Quick Report
2:41
Creating Quick Reports
3:05
How to Look at Details for Quick Reports
4:05
Zoom In on a Quick Report
5:19
What You See When You Zoom In On An Item
6:06
Customizing Quick Reports
6:53
How to Customize A Report
7:28
How to Add Transaction Number to QuickReport
7:57
How to Move Columns Around
8:14
How to Change Header
9:42
Analyzing Financial Data: Create & Customize Preset Reports

29m 26s

Intro
0:00
Creating and Customizing Preset Reports
0:35
Company & Financial
0:54
Customers & Receivables
1:04
Sales
1:53
Jobs, Time & Mileage
1:55
Vendors & Payables
2:35
Purchases
2:45
Inventory
3:06
Employees & Payroll
3:22
Banking, Accountant & Taxes, Budgets & Forecasts
3:43
Lists
3:49
Industry Specifics
3:54
Using the Report Center
4:37
Categories of Standard Reports Available
5:15
Creating a Balance Sheet Comparison Report
7:29
Filtering Reports
9:50
Customize Report
10:20
Saving Reports in PDF Format
13:58
Creating and Customizing a Sales Report
15:24
How to Change the Date to a Custom Date
16:30
Using Quickzoom in a Preset Report
17:49
What is Quickzoom?
17:55
How to Zoom
18:19
Widening and Narrowing Reports
19:59
Saving Report Settings and Creating Memorized Report Groups
20:50
What are Memorized Reports and What Are They Used For
21:04
Memorized Reports List
21:43
How to Create A New Memorized Report
22:19
Memorizing Preset Reports
22:48
Saving Report
24:14
Adding Reports to Memorized Report Groups
24:42
Adding Reports
26:49
How to Display Reports
28:50
Analyzing Financial Data: Printing, Exporting, and Quickinsight Graphs

30m 12s

Intro
0:00
Printing Reports
0:17
Preview Before Printing
2:34
Processing Reports in Groups
3:38
How to Run Reports in Groups
4:51
How to Display All Reports in a Group
6:09
Exporting Reports to Microsoft Excel
7:15
Purpose of Why People Export To Excel
7:48
Sending the Report to Excel
9:13
Formatting Options
12:08
Changing Filters
14:30
Choosing and Changing Different Filters
16:30
Creating Quickinsight Graphs
17:51
Creating an Income and Expense Graph
18:41
How to Create the Graph
19:46
How to Read the Pie Chart
20:05
Customizing Graph Data
24:16
Choosing by Customer Instead of Account
24:50
Using Quickzoom with Graphs
25:10
How to Zoom on a Particular Customer
26:15
Customizing How Graphs Display
28:31
How to Change Graph Into 2D
29:03
VII. Inventory
Setting Up Inventory

23m 51s

Intro
0:00
Turn On Inventory Feature
0:43
Enter Products Into Inventory
1:44
Entering Product Through Vendor Menu
2:07
Add New Item
2:43
Reordering Item and Reminders
6:00
Ordering Products/ Creating P.O's
7:02
How to Create Purchase Orders
8:05
Look Up Outstanding Orders
10:46
Getting a Report of Purchase Orders
11:34
Choose and Open Quick Reports
12:48
Receiving Inventory
13:47
Receiving Inventory Without an Invoice
14:13
Reviewing the Inventory List
15:38
Entering a Bill for Inventory
15:59
Entering Bill for Received Items
16:45
Manually Adjusting Inventory
18:31
How to Get to the Adjust Quantity On Hand Page
19:16
Add New Account
20:23
Check and Review Inventory List
22:59
Inventory: Tracking Finished Goods

22m 10s

Intro
0:00
Use Group Items or Create Inventory Assets?
1:57
Tracking Items Through Group Items
3:02
Using Inventory Assembly
3:42
What is a Bill Point?
4:58
Setting a Default Markup
6:16
Adding a Basic Mark Up
6:31
Add a Labor Item to Use in Assemblies
7:26
How to Add New Labor Item in Assembly
7:53
Creating Inventory Assembly Items
9:54
Adding New Assembly Item to Inventory
10:40
Adding in Assembly Labor
14:22
Editing the List
14:53
Building Finished Goods
16:05
Changing Sales Price
16:48
How to Build Assemblies
17:51
Understanding the Effects of Building Items
19:24
Run Report to Generate Item List
20:24
Inventory: Units of Measure

13m 14s

Intro
0:00
Setup Single Unit of Measure
2:12
How to Edit Unit of Measure on an Item
3:18
Setup Multiple Units of Measure
5:32
Setting up Preferences to Multiple Units of Measure Per Item
6:13
How to Edit Multiple Units of Measure on an Item
6:49
Assign Units of Measure to Items
8:44
Edit Items to Assign UN Set
9:01
Assign Measure Sets
9:42
Open Purchase Order and Select Unit of Measure
10:41
Use Units of Measure on Sales Forms
12:47
VIII. Tax
Tracking and Paying Sales Tax

21m 41s

Intro
0:00
Setup Tax Rates & Agencies
0:44
Setting Up Sales Tax Code List
0:55
How to Set up Tax Rate for Example City
3:26
Add New Item to Item List
3:46
Checking and Editing Item Through Vendor Center
7:20
Grouping Single Taxes
7:50
Why Taxes are Grouped
8:05
Creating New Sales Tax Group
8:59
Choose Tax Item to Add Into Group
9:51
Indicate Who and What Gets Taxed
10:45
Add New Customer To Assign Tax To
11:06
Invoicing Customer
13:03
Apply Tax to Sales
14:30
Editing Item and Choosing Tax Rate
14:53
Create a Sales Tax Liability Report
15:26
File Sales Tax Return/ Creating Liability Report
15:40
Use the Sales Tax Register
18:14
How to Read the Sales Tax Payable
18:35
Paying Your Tax Agencies
19:34
How to Pay Sales Tax
19:52
Choosing Which Items to Pay For
20:21
Print Checks
21:06
IX. Payroll & Invoice
Payroll Basics

17m 56s

Intro
0:00
Setup Payroll Items
0:54
Add to Subscription
1:07
Add Employee
2:26
Creating and Adding Personal Information
3:41
Adding Payroll/Compensation Information
4:43
Setup Taxes
6:27
Make a Payroll
8:36
Start a Scheduled Payroll
9:49
How to Edit Each Employee's Payroll Summary
10:30
Custom Items on Payroll
12:12
Print Payroll Checks
14:36
Print Later
14:39
Pay Payroll Liabilities
14:49
Forward Taxes to Authorities
15:06
Generate/Sending Check
15:46
IX. Payroll, & Invoice
Estimating & Progress Invoicing

14m 29s

Intro
0:00
Turning On Estimates and Progress Invoicing
0:21
Create a Job
1:30
Adding new job
2:22
Create an Estimate
5:14
Printing Estimate
7:56
Create Progress Billing
8:22
Invoice Estimate
8:32
Run Report: Job Progress Invoice vs. Estimate
10:46
Update Progress on Job Status
12:25
Edit Job Status
12:34
Make an Estimate Inactive
13:20
X. Time Tracking
Time Tracking

17m 16s

Intro
0:00
Turn on Time Tracking
0:23
Entering Time Data
1:27
How to Enter Time for Labor Per Job
2:45
How to Start Time Ticker While On Job
4:22
Recording Employee Time on a Weekly Timesheet
5:40
Use Weekly Timesheet
6:17
Enter Reimbursement Costs
7:59
Write the Check
8:38
Invoice a Customer for Time and Costs
10:19
Create an Invoice
10:33
Invoice for Time for Labor
11:54
Reports: Time by Job Reports
13:13
Paying Non Employees for Time Worked
14:27
Using Time Sheet & Jobs
16:37
XI. Customizing Forms & Writing QuickBooks Letters
Customizing Forms and Writing QuickBooks Letters

13m 43s

Intro
0:00
Customizing Invoices
0:10
Create Invoice
0:34
Customize Invoice
1:10
Downloading New Layouts
2:50
Create New Design
3:10
Designing Custom Layouts for Forms
5:11
Layout Designer
7:08
Using QuickBooks Letters
9:56
Create an Invoice Letter
10:22
Collection Center
11:49
Email From Collection Center
12:31
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Lecture Comments (3)

0 answers

Post by Benjamim Ferris on January 27, 2015

Why am I getting "network errors" on so many of of the lectures?

0 answers

Post by Foley Public Library on August 22, 2014

Are there practice files to download or do I build set of company files as I go?

0 answers

Post by Alex Moon on September 5, 2013

Finally! Quickbooks is here! I have been waiting for this for the past 6 months. Thank you!

Bookkeeping Basics

Lecture Slides are screen-captured images of important points in the lecture. Students can download and print out these lecture slide images to do practice problems as well as take notes while watching the lecture.

  • Intro 0:00
  • The Accounting Equation 0:10
    • Assets
    • Liability
    • Equity
  • Debit vs. Credit 4:10
    • T Account
    • How Your Bank Treats Your Account
    • Your Books
  • Chart of Accounts 7:15
    • Balance Sheet Accounts: Assets
    • Balance Sheet Accounts: Liability
    • Balance Sheet Accounts: Equity
  • Income Statement Accounts 9:03
    • Income
    • Expenses
    • Net Income

Transcription: Bookkeeping Basics

Welcome back to educator.com. This is Bookkeeping Basics.0000

Accounting 1 on 1. All you need to know to use QuickBooks.0004

Now, the thing that we need to do with accounting or in QuickBooks is, we need to understand a little bit about the basics of accounting equation.0008

Everything starts off with this: assets equal liabilities plus equity.0018

So, it is a little equation that you need to understand.0023

That all of our assets are the same or equal to our liabilities less equity.0026

Or in the reverse we can actually sit there and say our assets minus our liabilities will equal our equity.0033

Well, let us not get ahead of ourselves.0042

What this means is that left side must always equal the right side.0045

We must always be in balance when are dealing with accounting. Everything has to be in a balance.0048

So, if we have a $1000 in assets we may have $1000 in equity. So, that would be in balance0054

If we have $1000 in cash therefore we have a $1000 in equity.0061

If we have a $1000 vehicle and a loan or liability of $1000 is still in balance.0067

So, assets. An asset is something that is valuable.0075

And we benefit from or have use of that particular asset to generate income.0080

So, an asset truly is a tool that we can use to generate income.0085

A vehicle, a truck, cash, money. Those are all assets.0092

It is something that an entity has enquired or purchased.0098

And that has money value, its cost or book value, market value or residual value.0101

An asset can be something physical such as cash machinery, inventory, land and building.0106

An enforceable claim against others such as accounts receivable. People owe us money.0113

Or a write such as copyright, a patent, trademark or an assumption such as goodwill.0119

We assume that there is goodwill to the name Coca-Cola and there is value just in that name alone.0126

So, it assists us in generating an income.0135

Liabilities. What is a liability?0139

Is a claim against the assets or legal obligations or a person or an organization.0141

Arising out of past or current transactions or actions.0148

For instance, if we buy a truck and we get a loan for it.0151

Therefore that transaction creates a liability.0155

Liabilities require mandatory transfer of assets or provisions of services.0157

That specific dates or undeterminable feature.0164

Accounts and wage payable. Account is payable or the wage is payable.0168

Accrued rent and taxes. These are all liabilities.0172

Trade debt or short term or long term loans.0178

Owners equity is also turn as a liability because it is an obligation that the company has to its owners.0181

So, a liability is something you own.0188

Equity is the ownership or interest or claim of a holder of common stock or shares.0192

And some types are preferred stock or preferred shares.0199

At a company on a balance sheet equity represents funds contributed by the owners or stockholders.0201

Plus retain earnings or minus the accumulated losses.0208

So, equity truly it includes our income and expenses less equity.0213

The net value of our income less our expenses is part of equity. It goes into that.0219

Net worth of a person or a company is computed by subtracting the total liabilities from the total assets.0225

So, our total assets minus our total liabilities give us our equity.0230

Equity represents members, investment plus retain earnings or minus losses.0236

So, an asset minus liabilities equals equity.0241

Debit versus credit. We have always heard these things.0248

The T account. What is this?0253

Let us understand what a debit is and a credit is.0255

Now, to understand this let us think about how your bank works.0261

You have a bank account with Joe bank.0264

So, we are going to show you how your bank account works.0269

And how your books and check register works in relationship to that.0271

So, the T account. Let us look at that. It is called the T account.0275

On one side is debit which is the left side and on the right side is the credit column.0279

So, the right side versus left side.0284

Left side is debit. Right side is credit.0287

And what you do on the left must equal what you do on the right.0290

Everything needs to be in balance like a scale, if you notice.0293

Debit and credit. How your bank treats your account.0301

When you make a deposit your paycheck you get a $1000.0308

You debit on the left side your check. They will take your cash and they will debit their cash.0313

Now, they have your cash -- $1000 -- they put it and they debit their cash.0321

But at the same time they will record a liability on the right side your account number.0326

So, they are going to do cash and there is going to be a credit on the other side there.0336

So, they will debit the $1000 in their cash and credit a $1000 in their liability to you.0345

So, whenever you put money into your bank account the bank owes you money.0355

Therefore you are a liability to the bank. They look at you as a liability.0360

Whatever your bank account is they owe you that money.0365

But, on the reverse side how do you handle the same thing?0368

Well, when you get your income you are going to record your income as a credit and you are going to debit your bank account.0371

Wait a minute. I have been going through up my entire life.0381

So, the bank it is going to credit my account by my deposit.0386

What does that mean? Well in their books you are a liability.0389

But in your books it is an asset so therefore it is a debit.0392

So, you are going to debit your bank while the actual bank it is going to credit a liability that they owe to you.0396

Ok? So, now you are an asset.0405

And your income you are going to credit that $1000 of income.0410

So, you are going to credit income and record income to your business that you have made money or your paycheck.0414

You are going to say I have got income, your wage income.0421

And I am going to debit my bank account to show that I have increased my bank account by $1000.0424

But, to the bank you are a liability.0431

Now, the most important thing here next is your chart of accounts.0433

The balance sheet accounts and income statements. What are all these?0437

The balance sheet accounts, assets, liabilities and equity?0441

Assets such as cash that counts receivable.0447

Current assets like inventory. Fixed assets like the truck, machinery.0451

There are liabilities. What are liabilities? Accounts payable.0460

What is an Accounts Payable? Accounts Payable are things like we owe money to our cell bill.0464

We get an invoice in the mail. We owe them money but we are not going to pay it right away.0470

We will put it in as an Accounts Payable to be paid in a short term later.0475

The short term liabilities. Maybe we have a short term loan that is due in 6 months.0480

There is payroll liabilities.0484

And we owe the federal government there the taxes that we even hold or credit cards.0486

We might pay that within a year.0491

Long term liabilities. We might have a car or a loan that is due in 3 or 5 years.0494

There is a mortgage or just 30 year mortgage.0498

Now, we look at equity. What is equity?0502

Well, it is capital. What we invest in our business.0504

What we put in. That is capital.0507

Our owners contribution is capital.0509

There is retain earnings. What is retain earnings?0512

That is our net income. That is our income minus our expenses.0514

That is over a period of time when we have left in the business.0520

We create and retain onto those earnings. We retain them.0523

Our net income flows into the income statement. Flows from the income statement.0527

Our income less our expenses. Retain earnings is our previous years of earnings or loss.0531

And then we have retained and our net income is our current income for that current year.0537

Part of the income statement of course or income statement or our income which could be sales and products and services.0546

Our cost to good sold is part of our income. It is our product less the cost of that product.0553

So, it is our inventory cost purchased price of the item sold.0562

Then we have our expenses, advertising cost, auto, bank charges, and payroll expenses.0566

Payroll which could be wages. Payroll taxes, employer like in state an unemployment insurance.0575

And there is our insurance costs etc. There is many different types of expenses that we have.0583

So, an income statement is our income minus our expenses equals net income or loss. Hopefully it is an income.0589

Now, our net income figure flows to the balance sheet.0601

Under the equity section is net income for the current year.0605

And then the following year that net income value just changes name to retain earnings.0610

That is our basics in bookkeeping basics.0618

Thanks for visiting educator.com. We will see you next time.0622

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