Now that you know how to track income and costs specifically related to generating that income, you also need to make room in your chart of accounts for the other expenses related to running a business. After you calculate these expenses, you subtract that amount from the gross profit to find the company’s net profit.
Question: How is your daughter doing in accounting class?
Answer: Great. Now instead of asking us for her allowance, she bills us for it.
Most of these expenses are tax-deductible and are grouped here in categories you need to figure those deductions. However, you may find that your business ...