Friday, March 20, 2009

Other Accounting Statements | Reviewing the Common Financial Statements

Other Accounting Statements

You can probably come up with examples of several other popular or useful accounting reports. Not surprisingly, a good accounting system such as QuickBooks produces most of these reports. For example, one very common report or financial statement is a list of the amounts that your customers owe you. It's a good idea to prepare and review such reports on a regular basis to make sure that you don't have customers turning into collection problems.

Table 1 shows how the simplest sort of accounts receivable report may look: Each customer is named along with the amount owed.

Table 1: An Accounts Receivable Report at End of Day



W. Churchill


G. Patton


B. Montgomery


H. Petain


C. de Gaulle


Total receivables


Table shows another common accounting report — an inventory report that the hot dog stand may have at the start of the day. An inventory report like the one shown in Table 2 would probably name the various items held for resale, the quantity held, and the amount or value of the inventory item. A report such as this is useful to make sure that you have the appropriate quantities of inventory in stock. (Think of how useful such a report would be if you really were planning to sell thousands of hot dogs at major sporting events in your hometown.)

Table 2: An Inventory Report at Start of Day










Plain buns



Sesame buns



Total inventory


Putting it All Together

By now, you should understand what an accounting system does. When you boil everything down to its essence, it's straightforward, isn't it? Really, an accounting system just provides you with the financial information that you need to run your business.

Let me add a tangential but important point. QuickBooks supplies all this accounting information. For the most part, preparing these sorts of financial statements in QuickBooks is pretty darn easy. But first, you'll find it helpful to learn a bit more about accounting and bookkeeping. I go over that information in the coming chapters. Also, note that the big picture stuff covered in this chapter is the most important knowledge that you need. If you understand the ideas described in this chapter, the battle is more than half won.

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