Bookkeeping Services for thr General Ledger
Bookkeeping NYC provides expert general ledger services for NYC, Manhattan, NJ in Bergen County, Westchester County, Rockland County and Nassau County in Long Island. Our experienced bookkeepers can meet you at your business or provide general ledger services by downloading your data to our secure location for more efficient processing.
We offer general ledger set-up and maintenance services to clients who do not want the burden of creating or maintaining their general ledger. Our expertise can assist you in making your general ledger a detailed and accurate repository which will guarantee your income statement and balance sheet accurately reflects your company’s financial information.
We can assist on the creation and coding of your general ledger accounts if you are moving to new accounting software. Our knowledge will assure the necessary accounts exist in the general ledger and confirm the accounts are coded properly.
General Ledger Maintenance
The general ledger encompasses all of the transactions your business conducts during the period. Entries are recorded by posting a journal entry. A journal entry always requires a debit and a credit to be logged. A debit is written first and is the entry appearing to the far left. A credit is written below the debit transaction and is slightly indented to the right. See below for an example of a journal entry.
The entry below demonstrates how revenue is recorded; the first example illustrates the journal entry posted when cash is received and the second example illustrates the journal entry posted when a customer pays on account:
Example 1: sale of goods with customer paying cash
Example 2: sale of goods with customer paying on account
Accounts Receivable – Johnson
The general ledger consists of the following categories:
Assets are your company’s cash and cash equivalents and are categorized as short-term and long-term. Some of the most common asset accounts are listed below and are discussed in more detail in the balance sheet services:
Liabilities consist of your company’s short and long term debt. Some common liabilities are listed below and are discussed in more detail in the balance sheet services section:
- Notes/Loan payable (short and long term)
Shareholder equity represents the value of the company and consists of investments received from stockholders and retained earnings. Shareholder’s equity is described in more detail in the income statement services section.
Revenue consists of the money earned by your business from the sale of goods or services performed for the period. Revenue is discussed in more detail in the income statement services section.
Expenses consist of money your business spends in order to conduct business and generate revenue. Expenses for your business commonly include salaries, rent and utilities, cost of purchases and interest paid on loans. Expenses are discussed in more detail in the income statement services section.
Gains and Losses
Gains equal the additional money received on the sale of investments or assets. When your stock value goes up and you decide to sell, the additional money received is recorded as a gain. When a fixed asset (i.e., building or truck) is sold for a price higher than the book value, the difference is recorded as a gain.
Losses equal the money lost on the sale of investments or assets. When your stock value decreases and you sell the stock at a price lower than what you paid for it, the difference is recorded as a loss. When a fixed asset is sold for a price lower than the book value, the difference is recorded as a loss.
We typically record your company’s transactions using the accrual basis accounting method. This is the preferred method according to the generally accepted accounting principles. Transactions are recorded when it occurs even if no money is exchanged at the time. For example, when you purchase a building on account, the money owed for the building is immediately posted to your general ledger as a liability and the building is posted to your asset account. Using the accrual method, your records accurately reflect your company’s position at any given time.
For non-publicly traded companies, the cash basis accounting method is an alternative to the accrual method. The cash basis method records revenue when cash is received and records expenses when cash is paid out. The general ledger does not have accounts receivable or accounts payable since sales and purchases are only recognized when they are paid for. The cash basis method is much simpler than the accrual method but it less accurately reflects your company’s position.
For example, if your company sells $1,000,000 in product to a customer on March 22nd but doesn’t receive the cash from the customer until April 4th, the sale won’t appear in March’s financial records (i.e., income statement and balance sheet), the sales revenue will be recorded in April’s financials. If your company’s fiscal year-end was March 31st then the sales for the year would be understated by $1,000,000 as a result of using the cash basis method.
Please contact us for a free consultation of our bookkeeping services.