Jacksonville CPA | Growing The Business Earnings
Good morning, I welcome to the podcast. This is Brandon Macri, the president of Mineva, a Jacksonville based tax and accounting firm. So if you have a Jacksonville CPA that is just focused on doing a tax return and not giving you any more valuable information than please give them a call so we can help you. So today we’re just going through an accounting lecture to learn basic accounting concepts. So you know, we, we like to focus on education and so this is what we’re doing today or just going through an accounting lecture and I’m getting education. We need to learn about the way numbers work and what they can do to help our business
and then hopefully through profitability and putting money back into the company earnings that we retained for the business. We grow the business earning plus net income minus dividends, which is money that the owners take out of the business for personal use. You can do that equals ending retained earnings. It is the ending retained earnings which then goes on your balance sheet. Okay. And if you look at your balance sheet, balance sheet, show assets, all my assets. Jacksonville CPA again, as we get more into the class, we will learn there is a specific order in which we should present this information, but right now this is more than adequate. We list assets generally speaking in order of liquidity, which means how quickly they can convert into cash. Okay, but this, this, the water is fine and I would accept any order at this early stage as long as you have total assets of $40,000, I have my liabilities. Anytime you see the word payable that tells you what the liability, no panel, which is a loan from the bank, accounts payable, which is to our vendors for day to days, services and purchases, reliable.
So if you are Jacksonville, CPA is not giving you the information you need to run and grow your business and please give Mineva a call so we can help you out.
Well these $12,500 in my stockholders’ equity section, there’s that initial investment of 26,200. We put that in the common or capital stock account. Then there’s retained earnings from my retained earning statement. Okay? Ending retained earnings always put the ending retained earnings on the balance sheet, 1300 total stockholders’ equity 27,500. And then notice on the left, assets equal $40,000 and on the right liabilities and stockholders’ equity, $12,500 plus 27,005 on the right side. Total liabilities and equity equals $40,000. The balance sheet, we have to be imbalanced. The left side has teeth or the right side assets equals liabilities plus stockholders’ equity. Okay, so if you can review this information and truck, learn the various different accounts, all the different assets, all the different liabilities and stockholders’ equity accounts. Then retained earnings, having revenues, expenses, and dividends within retained earnings. Okay, that’s a good start. Then become comfortable with the four financial statements.
Now notice we’re not doing the statement of cash flows. Jacksonville CPA The statement of cash flows is a little bit unique. And to introduce it right now creates more confusion than import. Okay, so we’re gonna. Look at the statement of cash flows at the and have financial accounting. Okay, so right now we’re simply looking at the first three financial statements. The order in which we prepare them and how to actually prepare them. Here’s, you have an example of preparing the three financial statements. Again, you got to remember which accounts go on the various financial statements and that’s just going to be by you putting in the proper amount of time. Okay. That’s it for this lecture.
So if you’re Jacksonville CPA is not helping you, it’s not educating you as knocked a, giving you the information you need to grow your business, then please give them a call. And so we can help fulfill that need. That’s what we’re about filling the needs of a small business owners and um, you know, we’re just going through different, um, accounting terms and, and helping you understand the information that you need to, to help grow your business. So I see a lot of Jacksonville cpas out there that are not focused on helping their clients. They’re not doing planning. They are not sitting down and talking about the things that businesses need to do. They are not being creative in the slightest. So I’m mostly listening again to Mr Robb Smolan and see who, what he has to teach us about the basics of accounting,
talking about the fundamental building blocks of accounting today. This is kind of the nuts and bolts. How do we actually do accounting? We’re going to start by looking at something called accounting equation, which we talked about in the previous lecture, and then we’re going to actually see how we do accounting. How do we actually record all the accounting transactions and how does it flow through the accounting cycle? Okay, so we’re gonna talk about the accounting cycle journal entries that are recorded in the journal, posting the Journal Entries to the General Ledger and then preparing a trial balance. Okay. The first thing we want to look at is something called the accounting equation, and we’re going to see through a variety of examples that all transactions all somewhere into the accounting equation. Every transaction involves at least two accounts, double entry accounting, and there’ll be a lot of different combinations based on the nature of a transaction, but it’s either going to involve assets or liabilities or stockholders equity.
The expanded accounting equation, which is the next slide, shows that within stockholders’ equity, at this early stage in the game, we have two primary stockholders, equity accounts, and those are common stock author called capital stock and retained earnings, and from my previous lecture we said that retained earnings includes three particular accounts, revenues, expenses, and dividends. What I called the red accounts are ed revenue expense dividends, so that’s a good memory tool for you. Okay? Every transaction is going to fall somewhere into this accounting analysis. Now, this is not how we do accounting. This is an exercise to get you thinking about how every transaction always results in the accounting equation, being in balance. Now in my classrooms, I do this quite a bit. Here’s my accounting equation with assets on the left side and liabilities plus stockholders’ equity. On the right side, if the left side increases, the right side has to increase.
The left side goes down, the right side has to go down, so we’re always in balance. Jacksonville CPA That’s the key thing you have to remember as a result of double entry accounting. We are always in balance. If we’re not in balance, you made a mistake. It’s that simple. Okay? And we follow these basic rules and when we apply them consistently and accurately, we see that they work. Okay? So what we’re going to do is we have to start looking at a variety of transactions and these are in your textbooks are not these particular examples necessarily, but, uh, we’re gonna look at every transaction and we’re gonna. See how the accounting equation remains in balance. After we’ve looked at the transactions, we’re going to go through a separate example and we’re going to actually record journal entries, Post them to the General Ledger, and then prepare a trial balance. Okay? On October first cash of $10,000.
So just going through basic accounting transactions here. If your Jacksonville CPA is not giving you this information, then please give them a Neva. A call
is invested in ABC Corporation by investors in exchange for $10,000 in common stock. Now we can record a journal entry and again, later on in this lecture we will record journal entries. But right now what I want you to think about and is every transaction involves at least two accounts and it’s going to be a combination of assets, liabilities, or stockholders. Equity. I remember within stockholders’ equity, it could be common stock and retained earnings, and within retained earnings we have revenues, expenses, and dividends. Okay? So accompany a man or a woman begins accompanied by taking personal money or money from them personally.