Question..how do I track my daily cash register income AND bank deposits in the checkbook without having both post as income on my P&L?

There are a couple of ways to handle this . I will give you one expample:. 

1-Make sure you have set up sales items in your items list.  2-Create a sales receipt for that days sales, ( set up a customer called “Daily Sales”) Choose “daily sales” for the customer, fill in the rest of the information on the sales receipt.  At the bottom you will need to select the “Deposit to” account.  Select undeposited funds.  3-go to banking and make deposits.  Select the sales receipt you just entered.  On the Deposit screen select the bank account you will be depositing funds to. Select the deposit date.  in the body of the deposit field, the first line should have already pulled in the amount from your daily sales receipt.  On the second line, select your Cash in Register account.  Under the amount column put a negative number for the amount you will be keeping in the cash register,  On the 3rd line, select your Cash in Safe account. Under the amount column put a negative number for the amount you will be keeping in the safe for change.  Now your net deposit should equal what you are actually depositing to the bank.

How do I run an unpaid bills report and capture the amounts due from 12/31/2010 to match my balance sheet at the same date?

Are sales discounts debited or credited in a general Journal?

When you make the intial sales, the “Sales” income account is credited and any discounts would be debited to “Sales Discounts and Allowances”

How do you record an accrued expense?

Make a journal entry and debit the expense account and credit the liability account(generally the liability account is setup as a current liability and called accrued expenses)

Reverse the journal entry in the month that the expense is actually paid

Where should capital assets be listed?

Capital assets are set up as “Fixed Asset” accounts on the balance sheet

Part 1: What are Payroll Taxes?

Payroll taxes are those taxes withheld from your employees’ paychecks, as well as those taxes you pay as an employer based on the wages you pay your employees. These include:

• Social Security and Medicare
• Federal and state unemployment
• Personal income tax (federal and state)
• Miscellaneous other state taxes

Most payroll taxes, such as income tax, apply to all earnings. However, some taxes have what is called a wage cap–the maximum annual earnings per employee that is subject to that tax. These caps may be adjusted by the governing agency (typically annually).

Social Security and Medicare

Social Security and Medicare taxes are paid by both employers and employees. As an employer, you withhold the employee’s part of the taxes and also pay a matching amount.

The employee tax rate (amount withheld) for Social Security is 6.2%. The employer tax rate for Social Security is also 6.2% (12.4% total). This is a tax with a wage cap, which means that the tax is calculated only up to a maximum dollar amount of wages per employee each year. For 2010, the wage cap for Social Security is $106,800.

The employee tax rate (amount withheld) for Medicare is 1.45%. The employer tax rate for Medicare tax is also 1.45% (2.9% total). There is no wage cap for Medicare tax, which means the tax is paid on all of the wages that the employee earns. (The exception is exempt wages–see “Special Tax Exemptions” below.)

Personal Income Tax

The amount of federal income tax withheld from employees’ paychecks depends on their marital status, the number of withholding allowances (exemptions) they claim on Form W-4, and their projected annual income.

In addition, all but nine states have a personal income tax (exceptions are AK, FL, NV, NH, TN, TX, SD, WY, and WA). It may be a flat tax rate (as in Illinois), regardless of projected income, or a graduated tax rate based on annual income, like the federal income tax.

In some states, employees also pay local tax (to cities, school districts, or counties) through their paycheck.

Form W-4. An employee reports several items on Form W-4:

• Filing Status. This is the marital status that dictates which tax table will be used to calculate income tax withholding. For federal income taxes, there are four filing status options: single, married filing jointly, head of household, and married filing separately. 
• Withholding Allowances. Also called exemptions, withholding allowances reduce taxable income by a designated amount per allowance. The IRS updates allowance amounts periodically. Factors such as number of dependents influence how many allowances an employee will claim. 
• Additional Amount to be Withheld. This amount is added to the income tax calculated for each paycheck. It is on top of the amount of income tax withholding based on the employee’s filing status and withholding allowances. An employee working multiple jobs might choose to have an additional amount withheld to compensate for understatement of annualized wages (and therefore understatement of his real tax rate) by each employer.

The W-4 includes several worksheets intended to help the employee arrive at the most accurate projection of tax liability possible. Some states have similar forms for state tax liability.

Federal Unemployment (FUTA)

The Federal Unemployment Tax Act (FUTA), along with the state unemployment systems, provides for payments of unemployment compensation to workers who have lost their jobs. For 2010, the effective FUTA tax rate is 0.8%. The tax applies to the first $7,000 employers pay to each employee as wages during the year, so your maximum FUTA liability per employee is $56.00 per year.

However, if any of your employees are exempt from State Unemployment Insurance (for example, they are Directors or Officers), your FUTA tax may be higher. Also, if your state has borrowed funds from the federal government to cover shortfalls in its unemployment insurance program, all employers in your state may be subject to additional tax liability at the end of the year to repay those loans.

State Unemployment Insurance (SUI)

All states maintain a reserve for unemployment that is funded through an unemployment insurance tax. In most cases, SUI is paid only by the employer. Employees in some states, such as New Jersey and Pennsylvania, also contribute to SUI through their paychecks.

Most states have established a starting SUI rate for new employers. (Wherever possible, we provide this rate to you.) After a designated period of time, employers are assigned an experience rate, which may be higher or lower than the new employer rate depending on the employer’s reserve account balance. You will receive a notice from the state if your rate changes.

Other Payroll Taxes

Some states administer disability insurance (SDI) or workers compensation as a tax collected through payroll. Many states also have a tax paid jointly with SUI that is used to fund job training programs. Where applicable, we calculate these taxes for you.

Special Tax Exemptions

Some types of employees are exempt from one or more payroll taxes, which means that they do not pay those taxes. For example, a minor working for a parent who is a sole proprietor does not have to pay social security, Medicare, or FUTA.

In addition, certain portions of regular employees’ wages may be exempt from one or more payroll taxes. For example, tax-sheltered or pretax insurance plans save both the employer and the employee money by exempting premium amounts from all federal taxes and some state taxes. Some fringe benefits, like S-Corporation owners’ health insurance, are also taxed differently from regular wages.

If your company is a not-for-profit 501(c)3 corporation, you do not pay FUTA at all–regardless of who your employees are.

An Introduction to Payroll and Taxes

As a new employer, you probably have questions about what it means to “do payroll.” This document will provide you with an introduction to payroll processing and some background about your obligations as an employer.

There are three main things you need to do related to payroll:

1. Pay your employees: calculate gross pay and taxes withheld each pay period 
2. Pay taxes: pay taxes withheld from employees’ paychecks as well as tax liabilities you incur as an employer to the appropriate government agencies, such as the IRS or your state’s department of revenue 
3. File tax forms: these must be dealt with every quarter. Even if you’ve paid everything you owe, you still have to file tax forms that report your liabilities.

Second Look at your W4

It’s always a good idea to periodically review the Form W-4 you have on file with your employer. Form W-4 is the form that determines how much income tax your employer will withhold from your paychecks. Changes in your personal situation, such as a wedding, divorce, or new baby, can affect your tax liability for the year. Thus, you need to review Form W-4 to make sure that your employer is not withholding too much or too little.

 A Form W-4 review may be particularly appropriate right now. There have been recent changes in the tax law that may also affect your 2009 tax bill. You may want to adjust your withholding up or down to bring it closer to your revised tax liability.

 For example, you probably noticed that your paycheck took a jump in April. That jump was a reflection of the new “Making Work Pay” tax credit enacted by Congress earlier this year. However, for some taxpayers, their paychecks may have taken too big a jump, Because of the way the new withholding tables work, these taxpayers may be getting a bigger reduction in withholding than the new tax credit entitles them to. This means that they are being under withheld and may owe tax when they file their 2009 returns next year. Taxpayers who may be under withheld include working couples and individuals who work at two jobs. If you are being under withheld you can file a new W-4 to adjust your withholding upwards.

 Other taxpayers may be entitled to new tax breaks for 2009 and may want to reduce their withholding by claiming additional withholding allowances on Form W-4. For example, if you buy a new automobile this year, you may be entitled to a deduction for the sales tax you pay on your purchase. Or if you buy a new home, you may be entitled to an up-to-$8,000 tax credit on the purchase. You can get an immediate benefit from these new breaks by filing a revised Form W-4 that adjusts your withholding downwards.

Five QuickBooks Keyboard Shortcuts

Shortcut One: Keyboard Tips Working with Dates

When in a date field there are many ways to change the date. Of course you can type the date or you can pull up the calendar but there may be faster ways to get to a specific date.Changing by a Few Days.If you only want to change a few days try using the Plus (+) or Minus (-) key to move forward or backwards. You can hold the key down and change dates quite quickly but I generally recommend this for a change of a few days. Changing by Weeks.You can go back to the first day of the week by using the letter W and forward to the last day of the week by using the letter K. Note:Recognizing that these are the first and last letters of the word WeeK gives you a clue as to how you can move forward or back within the week. Changing by Months.You can go back to the first day of the month by using the letter M and forward to the last day of the month by using the letter H. Note:Recognizing that these are the first and last letters of the word MontH gives you a clue as to how you can move forward or back within the month. Changing by Year.You can go back to the first day of the year by using the letter Y and forward to the end of the year at a time by using the letter R. Note:Recognizing that these are the first and last letters of the word YeaR gives you a clue as to how you can move forward or back wtihn the year. Today.By now you will probably not be surprised to learn that you can return to today’s date at any time by pressing the letter T. Tips　copyright　©　2009　by　Caren　Schwartz,　and　used　by　Intuit　with　permission.　Notes　©　2009　by　 Intuit　Inc.　All　rights　reserved.　　 1

Shortcut Two: Saving Transactions from Keyboard

When working in a transaction and tabbing from field to field, you eventually get to the point where you want to save the transaction.

If you do not wish to take your hands off the keyboard to move the mouse to the Save & New Button, try holding down the CTRL key while pressing the Enter key. This combination will execute whatever is highlighted, almost always the Save & New Button.

Shortcut Three: Calculations on the Fly

How often have you worked in QuickBooks and needed to do add up numbers? Windows and QuickBooks both have calculators that you can pull up, but you really don’t need them.

If you are in an amount field on a check or other transaction, just pressing the number keys followed by a mathematical symbol (+, -, /, *) you will pull up the calculator. You can continue to enter numbers and math functions until you are done.

Note: Just remember to press the Enter key to enter the amount into the number field. If you press the tab key you will lose the amount.

Shortcut Four: Working with Check Numbers

Many people don’t realize you can enter something other than a check number in the check number field.

I like to use the word Debit for all transactions that I do online. Then I put the online confirmation number in the memo field. This makes it easy to track the transactions and they show up grouped together on the bank statement reconciliation screen.

Note: Just be sure to be consistent with the word and the spelling, including capitalization or they won’t be grouped together.

Shortcut Five: Making the Icon Bar Work for You

Last but not least, you can customize the icon bar at the top of the screen to hold the functions you use most often. Just right click on the icon bar and click on Customize.

Ten Steps to Sell Your Business

Ten Steps to Sell Your Business

If you’re thinking about selling your business now, make sure you get things in order to get the most out of the sale.

Here are 10 key steps in the process, according to Kaulkin Ginsberg Co., a Rockville, Md.-based mergers and acquisitions advisory firm.

1. Get an information memorandum ready for potential buyers. This document shows buyers the key aspects of the business. Its background, markets served, client base, financial results and management are among the items that should be included. Give possible buyers a clear picture of past and expected future cash flows.

2. Find out likely buyers and how to reach them. Buyers can run the gamut from strategic buyers in the industry who see synergies with their current business to financial buyers who simply see a good opportunity to turn a profit on the deal. Mergers and acquisitions intermediaries can help identify likely candidates. Keep in mind how you want to get paid: stock in the buying company, cash or a mix. Many owners like to target buyers that would be most likely to keep the company and employees intact. It’s their baby they’ve raised over many years.

3. Contact the buyers. Expect to take about a month from the point you decide to sell until you can contact targeted buyers. Be sure you’re dealing with people who have authority to decide whether or not to get serious about buying your firm. At this stage, you probably don’t yet need to tell buyers the selling firm’s identity. Just give a short description of the company to gauge interest.

4. Gain confidentiality. In order to make sure word doesn’t leak out, get potential buyers to sign confidentiality agreements. As soon as potential buyers show interest, make sure they sign the pact. If word gets out that your firm is for sale, it can hurt business. Competitors can use that knowledge to steal clients. It can be unsettling to your staff members, some of whom might start looking for other jobs. This also ensures that sensitive financial information doesn’t get out. Once you have the confidentiality agreement in hand, you can provide potential buyers with the memorandum.

5. Conduct Q&A with buyers. Buyers will usually want more specific information beyond the memorandum. Meet with them and answer questions by phone or e-mail. Set deadlines for each key step, including this one. Depending on your selling timeframe, you might want to move the process along fairly quickly. But give potential buyers enough time to feel comfortable with what they’re looking to acquire.

6. Receive offers / letters of intent. These could take several forms, such as a formal letter of intent or a less formal offer, either verbally or in some written manner. They should include price and terms of the acquisition, how the buyer will fund the buyout and any contingencies that go along with the offer.

7. Conduct management meetings. Meet with management of the bidding companies. This not only gives you a better idea of the cultural fit with the buyer, but it also gives potential buyers a chance to further evaluate the company. You can provide updated financial information. And a more-detailed explanation of the company can help lift the purchase price. You might get final offers from possible buyers. Finally, settle on one buyer with whom to sign a letter of intent and proceed.

8. Engage in due diligence. This is where everything gets put out in the open. The buyer will likely bring in accountants, attorneys and operations people. They’ll likely want to visit your company’s various sites, if it has multiple locations. A specific deadline is typically set for exclusivity. The seller can also do due diligence on the buyer. In many cases, the seller will remain with the buying company for a period of time, so be sure you know what you’re getting into.

9. Negotiate definitive purchase agreement and other agreements. If all goes well in the due diligence process and both sides opt to proceed, attorneys for both sides will come up with a detailed definitive purchase agreement. This specifies every aspect of the deal. Employment and noncompete agreements are often also included.

10. Close the deal. Once everything else is agreed upon and financing is in place, it’s simply a matter of each side signing the documents to finish the acquisition. Any cash involved at closing is usually wired to the seller’s bank. The entire process often takes four to six months, and you’ve finished the sale!