QuickBooks 2021 For Dummies

Appendix B

If Numbers Are Your Friends

You don’t need to know much about accounting or about double-entry bookkeeping to use QuickBooks — which, as you know, is most of its appeal. If you’re serious about this accounting business or serious about your business, consider finding out a bit more; setting up QuickBooks and understanding all the QuickBooks reports will be easier, and you’ll be more sophisticated in your accounting, too.

Just because the accounting in this appendix is a little more complicated doesn’t mean that you can’t understand it. To make this whole discussion more concrete, I use one running example. I hope it helps you! If nothing else, it’ll inspire you to get into the rowboat-rental business.

Keying In on Profit

Start with the big picture. The key purpose of an accounting system is to enable you to answer the burning question “Am I making any money?”

Accounting is that simple. Really. At least conceptually. So throughout the rest of this appendix, I just talk about how to calculate a business’s profits in a reasonably accurate but still practical manner.

Let me introduce you to the new you

You just moved to Montana for the laid-back living and fresh air. You live in a cute log cabin on Flathead Lake. To support yourself, you plan to purchase several rowboats and rent them to visiting fishermen. You’ll probably need to do quite a bit of fishing too, of course, but just consider it the price you pay for being your own boss.

The first day in business

It’s ...