Basics of Accounting : The owner's right or claim to assets is expressed by the word equity, or investment. Other terms that may be used include capital, net worth, or proprietorship. Liabilities represent debts and obligations of the business. The business may have a liability to the owner, however, creditors? claims to the assets have priority over the claims of the owner.
An equation expressing the relationship of these elements is called the fundamental accounting equation.
Assets = Liabilities + Owner's Equity
Revenues are the amounts of assets that a business or other economic unit gains as a result of its operations. For example, revenues represent earnings derived from fees earned for the performing of services, sales involving the exchange of goods, rent income for providing the use of property, and interest income for the lending of money.
Expenses are the amounts of assets that a business or other economic unit uses up as a result of its operations. For example, expenses represent the amount of cash paid for services received, such as wages expense rent expense, interest expense and supplies expense.
Revenues and expenses directly affect owner's equity. If a business earns revenue, there is an increase in owner's equity. If a business incurs or pays expenses, there is a decrease in owners equity. So, we place revenue and expenses under the ?umbrella? of owner's equity.
Steps to be followed for good Bookkeeping Systems : Many methods may be used. At a minimum, certain procedures should be done on a monthly or other periodic basis to make sure that your accounting records are accurate. Some of these steps are as follows:
*All checks written and deposits made should be entered into a check register.
*A monthly bank reconciliation should be done to make sure that all transactions have been recorded (including bank originated charges) and that the ending cash balances to the adjusted bank balance.
*All expenses should be classified into business expense categories to record the various expenditures.
*All deposits made to the account should be identified and classified (e.g., boarding income, interest income and owner contributions).
*A financial statement should be prepared on a periodic basis to understand the results of your operation.
it is extremely important to identify all the sources of deposits to make sure that actual income from operations is not confused with contributions of working capital from the owner.
Advantage of Computerised bookkeeping : Computerized accounting systems allow you entry of transactions into an automated system to provide a variety of information. Simple accounting packages can be very powerful tools to assist in understanding the results of business operations. After the entry of the basic transactions, the data is available in a number of reports (e.g., cash disbursements register, income statement, balance sheet.) These systems help ?non-accountants? automatically produce standard financial statements without much technical accounting background. Good habits in computer processing procedures must be used to make sure that all the transactions are recorded. Otherwise, the financial information presented may not be accurate.
We have all had them, those great inspirational ideas that wake us up in the middle of the night wanting to come alive and make us money. Many of these ideas even look good later in the light of day. Unfortunately, all too often as the days and weeks move on, the idea becomes lost in the daily grind. What could have been a profitable thought is all too soon forgotten because it wasn't acted upon. Do not let that happen to you again!
Ideas that come to us in the night as we sleep are frequently some of the best because they have been conjured up by our subconscious mind while our conscious mind takes a rest. These are the creative ideas that have been rolling around in your head waiting to be discovered when you slow down. The difference between success and failure is simply acting on the ideas you believe to be the most relevant in the current climate and that offer potential reward.
Here are three steps to follow to make the most of your idea.
1. Protect it.
Protection for your idea will generally fall under one of four categories: patents, trade secrets, trademarks and copyrights.
Some of the protection for your idea can be accomplished easily by yourself such as copyrighting an article, like this one. A copyright does not protect the idea, but it does protect the manner in which the idea is expressed. These expressions may be in the form of writing, music, art, computer programs, photographs and other tangible forms of artistic expression.
Trademark law protects your right to exclusively use a name, logo or slogan that identifies and distinguishes the origin of your idea. This concept extends to the "trade dress" of the idea, which means its appearance, and how the idea you have, ultimately becomes packaged or configured.
Trade secrets are the information used in the implementation of your idea, which gives you an advantage over your competition. The key to this protection is that you must treat the information with secrecy. If you make a public disclosure of the information, then others will be free to use it.
Patents are the intellectual property right that protects inventions. For all practical purposes, and outside the field of botany, patents fall into two basic categories. On the most basic level, design patents protect how the invention looks and utility patents protect how the invention works. Patents are the most complicated protective device to secure, but they offer strong protection once you are awarded them.
2. Market Your Idea.
Great ideas are plentiful, but getting the idea to market and making money with it is what separates the casual inventor from the profitable entrepreneur.
Marketing your idea takes two basic roads. You can do it yourself or you can license someone else to do it for you. Which road you should take depends on your own skill set and the amount of money required to get the product to market. If you have neither the skill set to market nor the money to do it, then you should consider licensing your idea or product to someone who does.
A license is the grant of rights for your idea/invention to someone who is willing to spend the time and money to market it for you. As you might imagine, there are big companies that license products and there are entrepreneurs who make their living licensing ideas of others. This classic paring of two different skill sets (creating and marketing) has resulted in many successful projects. In some cases, the inventor takes a royalty for his ideas and does nothing but collect checks in the future. In other situations, the inventor remains involved in the projects. The combinations of how to structure license agreements are seemingly endless, and the answer as to which is best for you is determined by what you and the person who gets your license (licensee) are able to agree to.
A well-structured license agreement can be extremely profitable for both licensor and licensee and is big business today in everything from character licensing to sports licensing of naming rights and apparel. Licensing is a terrific way to make passive income for the rest of your life and offers true rewards for the creative person with a great idea.
3. Enforce Your Rights.
While enforcing your rights is not as exciting as the thought of creating or marketing a hot idea, do not forget that you will have to be vigilant and enforce your rights to keep them.
Music and movie piracy are only two of the more-common forms of intellectual property theft that is all too prevalent in our culture, especially overseas. Anytime there is big money to be made in something, there will be others ready to take what is yours. While this means you may have to one day spend money to enforce your intellectual property rights to protect your ideas, that is not a reason to miss out on the opportunity to gain from your ideas. A considerable body of law has developed in the area of intellectual property rights and protection and the creator who has exercised care in legally protecting his rights should feel comfort that his rights will be enforced.
Both Bhaskar Thakkar & Nick Nanton are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Bhaskar Thakkar has sinced written about articles on various topics from Property Guide, Accounting Bookkeeping General Svc. Mr.Bhaskar Thakkar is a qualified Chartered Accountant and professional bookkeeper from India. He is a president of M/s. BT Associates, Chartered Accountants. The said firm provides Book keeping, Accounting, Auditing and Tax preparation services to variou. Bhaskar Thakkar's top article generates over 720 views. to your Favourites.
Nick Nanton has sinced written about articles on various topics from Limited Liability Company, Physical Therapy and Accounting Bookkeeping General Svc. JW Dicks & Nick Nanton, founders of publish the Business Growth ezine monthly covering topics that every business, start-up to. Nick Nanton's top article generates over 6600 views. to your Favourites.