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1 Lita Epstein, MBAB ookkeepingWorkbookFORDUMmIES 01_169834 8/31/07 8:17 PM Page 8/31/07 8:17 PM Page 01_169834 8/31/07 8:17 PM Page 8/31/07 8:17 PM Page Lita Epstein, MBAB ookkeepingWorkbookFORDUMmIES 01_169834 8/31/07 8:17 PM Page Workbook For Dummies Published byWiley Publishing, River , NJ 2007 by Wiley Publishing, Inc., Indianapolis, IndianaPublished simultaneously in CanadaNo part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means,electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Sections 107 or 108 ofthe 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization throughpayment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923,978-750-8400, fax 978-646-8600.

2 Requests to the Publisher for permission should be addressed to the Legal Department,Wiley Publishing, Inc., 10475 Crosspoint Blvd., Indianapolis, IN 46256, 317-572-3447, fax 317-572-4355, or online :Wiley, the Wiley Publishing logo, For Dummies, the Dummies Man logo, A Reference for the Rest of Us!, TheDummies Way, Dummies Daily, The Fun and Easy Way, and related trade dress are trademarks or registeredtrademarks of John Wiley & Sons, Inc. and/or its affiliates in the United States and other countries, and may not be usedwithout written permission. All other trademarks are the property of their respective owners.

3 Wiley Publishing, Inc., is notassociated with any product or vendor mentioned in this OF LIABILITY/DISCLAIMER OF WARRANTY: THE PUBLISHER AND THE AUTHOR MAKE NO REPRESENTATIONSOR WARRANTIES WITH RESPECT TO THE ACCURACY OR COMPLETENESS OF THE CONTENTS OF THIS WORK ANDSPECIFICALLY DISCLAIM ALL WARRANTIES, INCLUDING WITHOUT LIMITATION WARRANTIES OF FITNESS FOR A PAR-TICULAR PURPOSE. NO WARRANTY MAY BE CREATED OR EXTENDED BY SALES OR PROMOTIONAL MATERIALS. THEADVICE AND STRATEGIES CONTAINED HEREIN MAY NOT BE SUITABLE FOR EVERY SITUATION. THIS WORK IS SOLDWITH THE UNDERSTANDING THAT THE PUBLISHER IS NOT ENGAGED IN RENDERING LEGAL, accounting , OROTHER PROFESSIONAL SERVICES.

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5 Some content that appears in print may not be available inelectronic : 978-0-470-16983-4 Library of Congress Control Number: 2007934458 Manufactured in the United States of America10 9 8 7 6 5 4 3 2 101_169834 8/31/07 8:17 PM Page the AuthorLita Epstein,who earned her MBA from Emory University s Goizueta Business School, enjoyshelping people develop good financial, investing and tax-planning skills. While getting her MBA, Lita worked as a teaching assistant for the financial accountingdepartment and ran the accounting lab. After completing her MBA, she managed finances fora small nonprofit organization and for the facilities management section of a large medicalclinic.

6 She designs and teaches online courses on topics such as investing for retirement, gettingready for tax time and finance and investing for women. She s written over 20 books includ-ing Reading Financial Reports For Dummiesand Trading For Dummies. Lita was the content director for a financial services Web site, , and man-aged the Web site, Investing for Women. As a Congressional press secretary, Lita gained first-hand knowledge about how to work within and around the Federal bureaucracy, which givesher great insight into how government programs work. In the past, Lita has been a dailynewspaper reporter, magazine editor, and fundraiser for the international activities of formerPresident Jimmy Carter through The Carter Center.

7 01_169834 8/31/07 8:17 PM Page 8/31/07 8:17 PM Page my father, Jerome Kirschbrown, who taught me the importance of accounting , bookkeep-ing, and watching every s AcknowledgmentsMany people were involved in making this book a reality. First, a special thank you to StacyKennedy, my acquisitions editor at Wiley, who successfully championed this book throughthe editorial board process. Also at Wiley, a special thanks to Jennifer Connolly, my projecteditor, whose helpful and insightful comments, as well as her expert editing, helped makethis book the best it could be. In addition, I want to thank my agent, Jessica Faust, who helps me regularly with all my book projects.

8 And finally, last but not least, my husband, Wolpin, who puts up with all my craziness as I try to meet 8/31/07 8:17 PM Page s AcknowledgmentsWe re proud of this book; please send us your comments through our Dummies online registration form located of the people who helped bring this book to market include the following:Acquisitions, Editorial, and Media DevelopmentProject Editor: Jennifer ConnollyAcquisitions Editor: Stacy KennedyCopy Editor: Jennifer ConnollyTechnical Editor: Ken MorrowEditorial Manager: Michelle HackerEditorial Supervisor:Carmen KrikorianEditorial Assistants:Erin Calligan, Joe Niesen, David Lutton, and Leann HarneyCartoons: Rich Tennant ( )Composition ServicesProject Coordinator: Patrick RedmondLayout and Graphics.

9 Carl Byers, Denny Hager, Jennifer Mayberry, Melanee Prendergast, Julie TrippettiAnniversary Logo Design:Richard PacificoProofreader: Linda QuigleyIndexer: Broccoli Information ManagementPublishing and Editorial for Consumer DummiesDiane Graves Steele, Vice President and Publisher, Consumer DummiesJoyce Pepple, Acquisitions Director, Consumer DummiesKristin A. Cocks, Product Development Director, Consumer DummiesMichael Spring, Vice President and Publisher, TravelKelly Regan,Editorial Director, TravelPublishing for Technology DummiesAndy Cummings,Vice President and Publisher, Dummies Technology/General UserComposition ServicesGerry Fahey,Vice President of Production ServicesDebbie Stailey,Director of Composition Services01_169834 8/31/07 8:17 PM Page at a I: Exploring Bookkeeping 1: Deciphering the Basics.

10 7 Chapter 2: Designing Your Bookkeeping 3: Sorting Out Your Business Road II: Putting it All on Paper ..47 Chapter 4: Looking at the Big Picture ..49 Chapter 5: Journaling The Devil s in the 6: Designing Controls for Your Books, Your Records, and Your III: Tracking Day-to-Day Business Operations with Your Books ..91 Chapter 7: Purchasing Goods and Tracking Your Purchases ..93 Chapter 8: Calculating and Monitoring 9: Paying Your Employees ..127 Chapter 10: Paying Employer Taxes and Completing Related Government Reports ..141 Part IV: Getting Ready for Year s (Or Month s) End ..149 Chapter 11: Depreciating Your Assets.