One frequent problem I see in people's accounting records is how they record money they take out of the business as their "paycheck." I'd like to explain how to do this correctly.
I came across a question today on Intuit's forums about how to clean up old open balances, both for vendors and for customers, without messing up the financial statements. This is something I've been meaning to write about for a while, but I haven't gotten around to it until now. So here is at least the first part of Backyard Bookkeeper's guide to cleaning up old mistakes.
As I've contacted prospective clients recently, I keep hearing the same complaint, which goes something like this: "My accountant just isn't very helpful. I know I'm missing out on some tax breaks, but they don't ever give me any ideas on what else I can deduct, and I for sure haven't earned as much as my profit and loss statement says I have."
Newton's third law is as follows: For a force there is always an equal and opposite reaction: or the forces of two bodies on each other are always equal and are directed in opposite directions.