Bookkeeping Help!

Bookkeeping Help

We would like to welcome Donell as the newest accountant to our Firm. I had an interesting experience as we were interviewing accountants for the position. Many of the candidates claimed that they were bookkeepers and accountants. What I discovered is that many think that they are accountants because they can input data into QuickBooks. In reality, they really know very little about accounting principles. When I gave the candidates for our accounting position a little test, I came to realize that many of these so called “QuickBooks bookkeepers” do not understand double entry accounting, i.e. for each debit there has to be a corresponding credit.

Here are the problem areas:

  • Lack of understanding the balance sheet, in particular the equity section;
  • Calculating depreciation and corresponding accumulated depreciation;
  • Managing the company liabilities (payments for loans are incorrectly expensed, interest is not expensed, loan balances are not accurate);
  • Owner income distributions are expensed instead of recorded as equity distributions;
  • Salary and wage expense are recorded at net payments instead of gross (the salary and wage expense on the books and tax returns should equal the amount on the Form W-3).

So if you are paying a bookkeeper to handle your accounting, you might want to have them take a little test just to make sure they understand sound accounting and tax procedures. Your bookkeeper may just be a data entry clerk and your books are really inaccurate.

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