A financial statement that reports revenues and expenses for a fiscal period as a means of determining how well a company has performed in creating profit for its owners. Sometimes called a Profit and Loss Statement or P&L.

A financial statement that identifies the company’s assets and claims to those assets by credits and owners at a specific date. The Balance Sheet can change daily – It is a snapshot in time.

If you’ve been following along lately, you’ve discovered that I love Xero.  I switched my personal and professional finances to it.  However, if you are happy with your current bookkeeping software, you have no trouble working with your accountant at tax time, and your bookkeeper (if any) can get access without obstacles, there is no

A report that includes the activities of the parent company and its subsidiaries as though they were one company. This is rarely used in small businesses.

Reports that summarize the results of a company’s accounting transactions for a fiscal period.

Revenue recognized prior to the receipt of cash. For example, if you are on accrual basis accounting, you recognize revenue when the client is invoiced, not when the cash is received.

Liabilities that record the obligation to make payments for the expenses that have been incurred or for the assets that have been acquired but for which payment has not yet been made. In other words, payment is due, but has not yet been made.

The answer is no, unless you get audited (if you can’t prove it, you can’t deduct it), loose all your bookkeeping files or some other hazard.  Then you will probably wish you’d had saved every scrap of paper you’d ever received after a transactions, if only to ease your mind.  So now you are thinking

If you go to Xero’s site, they will tell you that Xero is simply beautiful accounting software.  And it is.  It is more than that though.  I have always been of the opinion that to use Quickbooks well, you needed to have a basic understanding of double entry bookkeeping.  I good working knowledge of the

Expenses recognized prior to the payment of cash. For example, entering a bill into your accounting software, but not paying it at the same time.