2011.04.30 Bookkeeping - not all deposits are income

Income seems like such a straight-forward concept, and it's easy to think of all deposits as income.
But not all deposits are income
even though you are adding money to the business's checking, savings, or other financial account.

The company borrows money.
This could be from a bank or other lending institution, a cash advance on a credit card, or
the owner(s) personally loan the company money.
When the company borrows money, regardless of the source, it is not income.
A liability account should be set up because this money will be repaid at some point.
It may be a Current Liability (short-term) or a Long-term Liability (a year or greater).
It may be repaid on a regular schedule or as a lump sum payoff.
As the company pays down (or totally pays off) this loan,
the liability account (the amount the company owes) will decrease.
These payments do not have any impact on income or expenses.
It all happens in the asset and liability accounts.

Another example:
The company owns rental property(s).
Generally, when a property is rented to a new tenant, a security deposit is required.
This security deposit is not income.
It, too, is a liability for the company.
At some time in the future, when the tenant leaves,
some or all or none of the security deposit may be returned to the ex-tenant.
The liability account for the security deposit(s) would be reduced  because
the company no longer owes the money to the ex-tenant.
When the tenant leaves and no security deposit is returned because of damages,
the liability account is still reduced in full (the original security amount)
and that amount will now be considered income.
Expenses will be incurred when the repairs are actually made.
The same is true for a partial refund of the security deposit;
the entire security deposit amount will be removed from the liability account.
Part of it will be returned to the ex-tenant (by writing a company check to the ex-tenant)
and the remainder will be treated as income.
Again, expenses will be incurred when the repairs are actually made.


2011.04.29 De-clutter, simplify and organize . . . the after . . .

. . . of the display shelves above the games and crafts cabinets.

Isn't all that empty space appealing?

I saved three empty frames, have at least a dozen to give away,
condensed some things in the library to make room for
the photo albums and scrapbooks.

I did a quick de-clutter and organize on the cabinets below.
One section was emptied (more for giving away)
and now the backpack and diaper bag have a convenient, but hidden home.

Also did a quick de-clutter of the hang bar in the entry closet
so that the "coat chair" is gone.
 Just a week or so ago, Vince said "Do you actually NEED all those jackets?"
(Yeah, they were mostly mine.)
But, they are leaving now
so the kids' coats have hanger space and pegs available.
Again, convenient to use, but put out of sight.

There are several other areas
which have become "hot spots" on my de-cluttering radar.
Their turns will come.

A side-by-side comparison . . .

Did you notice the tables?
Theresa asked if we could switch the square one from the library
with the oval one originally here.
Theresa:  Change is good.
I agree.

2011.04.29 De-clutter, simplify and organize . . .

. . . the display shelves above the games and crafts cabinets.

Now that I'm not working 6 days a week (tax season),
I'm ready for some spring cleaning and de-cluttering.
For me, the de-cluttering and organizing is much more enjoyable than the cleaning,
but cleaning a shelf is so easy when there is nothing on it :)

First step, mull it over in my mind and decide what's leaving.
Study the area for a couple of days to figure out the good and bad,
what's still functional, and what isn't.
Maybe the purpose of the area should be totally changed?
Am I just moving some things somewhere else?
Have things gotten old?  boring?  not needed?

Here's the before photo . . .

I've never been able to figure how areas become cluttered, but I know they do.
There is a very small storage room upstairs and I think stuff multiplies in the dark.

The top two shelves are mostly decorative and include the CD/radio.
The short third shelf has always been a challenge because it's only 5 1/2 inches high.
The table in front is an "extra" table for games, puzzles, craft projects,
and extra seating during family holidays and celebrations.
But, right now, it's mostly a catch-all for backpacks, diaper bags,
library make-and-take projects, and just stuff.

What I've decided so far ~ always subject to change ~
is to move all the photo albums and scrapbooks to the library
which will free up the cabinet top.
I love empty surfaces; they look so ready for projects and activities.
I also want to condense the display photos.
Condense means remove the photo(s) and file them in a photo box;
sell, pack, or give-away the frames.
Definitely keeping the decorative lamps and the CD/radio.

Problem:  there isn't any "free" space in the library for the albums.
This will require a quick de-clutter of a shelf in the library.

The after photo will be posted soon (I hope).

2011.04.29 Doublefile viburnum . . .

. . . so named because the flowers are in pairs
and seem to be marching down each branch . . .

[  Happy birthday, jan :)  ]


2011.04.28 Ferns . . .

2011.04.28 Bookkeeping - which business type are you?

A simplified (no pun intended) guide to the types of legal business entities:

An entity is just a catch-all term for all companies, regardless of business type.

For-profit businesses have three basic types:  sole proprietor, partnership, and corporation.
Sole proprietor is exactly what it appears to be,
     a single person responsible for reporting the net income of the business.
Partnerships are two or more people joining together,
     where each partner is responsible for reporting their portion of the net income
     and each partner is liable for the actions of every other partner.
Corporations come in two varieties, C corps and S corps.
     The "C" and "S" refer to the governmental sub-chapter where the rules are defined.
     The C corp is a legal, stand-alone "person" responsible for reporting its net income.
     The S corp is a legal, pass-through entity
          which means the net income flows proportionately to the shareholders.
     If a small business is set up as a corporation, it is probably an S corp.

Sole proprietorships are the easiest to start.  No legal paperwork to be filed.
Partnerships and corporations each require legal paperwork
     and each has specific bookkeeping requirements as well as tax filing requirements.
For each of the above, there are legal steps you may want to take even if it is not required.
Check your state requirements so your company will be compliant with state law.

Wait!  My business isn't any of those!  My business is an LLC.
Limited Liability Companies are a recent phenomenon created
     to allow an option of "limited liability" for the owner(s).
Every LLC must declare itself one of the three business types for tax reporting purposes.
If you use Schedule C on Form 1040 to report and file your LLC's financial activities,
     you are a sole proprietor for tax reporting.
If you use Form 1065 to file, your LLC is a partnership for tax reporting.
If you use Form 1120S to file, your LLC is an S corp for tax reporting.

Selecting a business type is extremely important; get the advice of a professional.


2011.04.27 FYI Online learning sites

A couple of web sources for anyone who wants to learn:

Heavy on math and the sciences, but also includes history and finance:  Khan Academy

Videos to spark thinking and creativity:  TED - Ideas Worth Sharing


2011.04.26 Quote ~ Get Going! Now!

To change one’s life:  Start immediately.  Do it flamboyantly.  No exceptions.
William James


2011.04.25 Bookkeeping . . . the beginning

Is your business making a profit?  Are you sure?  How much of a profit?

How do you track your business's profits?
There's only one way:  bookkeeping / accounting.

Bookkeeping and accounting, simple yet complicated.
They are not the same thing although they are often used interchangeably.
Both use the same methods, but accounting goes further and includes reporting for tax preparation.

I'll only be using the term bookkeeping just to keep things simple.

As with many specialties, understanding the jargon is a first step.
Chart of accounts, assets, equity, balance sheet ~ they all have specific meanings.
Understanding the meanings will assist you in running your business or your home finances.
That understanding will also be beneficial during discussions with your accountant for tax purposes.

Let's start:
The Chart of Accounts is just a listing of the 5 categories of accounts.
There are only 5, but each category may have sub-types.
The 5 categories are asset, liability, equity, income, and expense.
Four of these categories are familiar terms in everyday use; equity's meaning is a bit more fluid.
You may not know the exact definition, but you may think it has something to do with net worth.
You're correct; it does.

Assets:  checking and savings accounts, vehicles, money owed to you by customers (Accounts Receivable), buildings, land, machinery
Liabilities:  money the company owes to others (credit cards, loans, mortgages), money owed to vendors/suppliers (Accounts Payable)
Income:  customers' received payments, interest/dividends on financial accounts
Expenses:  operating expenditures such as rent, supplies, insurance, salaries/wages

And, then there is Equity:  capital/cash used to start the company, additional capital, this year's net income, retained earnings (which may require a complete blog post later)

2011.04.25 FYI Did you know that a Kindle . . .

. . . app can be downloaded to certain models of cell phones, iPads, AND to computers!
Both PCs and Macs.
Did everyone know this but me?
Go here: - Free Kindle Reading Apps

Now . . . if you have ever felt passionately about starting something, but have doubts . . .
download this free ebook (for your new Kindle app) "Do the Work" by Steven Pressman.
There are some mild 4-letter words (I'm half-way through reading this ebook),
but there is lots of encouragement and enthusiasm here.


2011.04.24 Easter! and some rainy day photos

A slow, steady rain in the early afternoon
left raindrops which looked like diamonds when seen from the side on this bleeding heart . . .

The hostas . . .
Under the redbud tree . . .

Under the open sky . . .

Next to the [very] small pond . . .


2011.04.23 Changes . . .

. . . are coming to this blog.
In the next few weeks, I'll be adding . . .
     full-resolution give-aways of my Blessings cards ~ see some here: Picasa - Blessings Cards 1-25
          (there are 75 total in three separate Picasa albums)
     simple bookkeeping help for small businesses and individuals
     simple ideas from my life to de-clutter, organize, and simplify
     organizing and simplifying ideas from other blogs
I considered having three separate blogs:  personal, simplifying/organizing, and bookkeeping
and then I realized the complicated task of managing and posting to three separate blogs.
Complicated, not simple.
So, I'll be using labels to distinguish between the posts.
My mission statement will now apply to my web-life, too:
     "Bless and simplify the daily lives of others."
I hope you enjoy, use, and are blessed by the changes.


2011.04.21 Last night, I dreamed . . .

Thirty years ago, I was an avid amateur photographer.
Before the digital photography era, I used a Nikon F2 and had a darkroom.
For 10 years, it was my passion.  Then, the passion faded.  It happens.

In the summer of 2006,
I was given Anne's point-and-shoot digital camera when she upgraded to a DSLR.

To encourage myself to learn this new technology, I started a Project365 in 2007 ~
     daily photographs which needed to be printed, displayed, or blogged.  My choice.
(see the tab at the top of this blog "Previous Project365s/Project52s)

The photography passion came back.
In the last few weeks, I've been mildly toying with the idea of buying a DSLR.
My current point-and-shoot is almost 3 years old.  My phone is just a phone.
There are pros and cons to buying and owning a DSLR.

Last night, I dreamed I owned a DSLR, was using it, and loved it.  Loved it.
This is significant because I am a very sound sleeper
     and will only remember a dream once or twice a year.
So . . . last night, I dreamed . . .



2011.04.14 More low-light evening photos

The apple tree in the pasture . . .

And another blooming shrub I've never identified . . .

2011.04.14 Lower-carb eating . . . part 4

Just as at the beginning many lifestyle changes, eating fewer carbs starts with a list of "don'ts".
don't eat potatoes.
don't eat white rice.
don't eat corn.
don't eat anything made with white flour.
don't eat anything made with corn meal.
don't eat anything made with sugar.
don't eat...
don't eat...

Whoa!  What can i eat?
As it turns out, lots of things.
Lots of foods that are really healthful for my body.
Reading online about low-carb diets may produce quite a few scare tactics
     about the dangers of low-carb eating.
As if I'm going to replace the foods I'm not-eating with a bunch of foods which are unhealthful.

What we are eating?
More veggies.
More veggies.
More veggies.


2011.04.13 Quote

Worry never robs tomorrow of its sorrow; it only saps today of its strength.
A. J. Cronin


2011.04.12 Lower-carb eating . . . part 3

Unexpected side effects.
IF these changes actually are side effects of low-carb eating, that is.
I don't really know.
What I do know is that these things started after
we changed our eating habits.

I drink more liquid, mostly iced tea.
Maybe I'm just recognizing thirst as thirst and before I thought I was hungry?

I used to be hungry (and eat) every 3 hours or so.
I wasn't particularly overweight.
I usually didn't eat lots of food each meal or snack.
But, every 3 hours, there is was again . . . hunger.
Now, it's 5 hours or so before I get hungry.

Minimal intestinal gas; no heartburn.

 I'm warmer.
For as long as I can remember, I've been "cold-natured".
Everyone else in the room would be temperature-comfortable
and so would I, but I would be wearing a sweater
or have a throw or comforter on my lap.
Not anymore.

This may be an amazing coincidence,
but I haven't had a sinus headache since we began.
I had my first sinus headache decades ago and
they regularly happen, usually triggered by a quick weather change.
Storm front moving in?  My head knows 24 hours in advance.
Sometimes the headaches are just annoying,
other times I become non-functioning for a morning or an entire day.
So, maybe just a coincidence . . .
but not a single headache in 5 weeks.
in Indiana?  in the springtime?
This has NEVER happened before.
I could wake tomorrow with pain.  Or not.

There may be other side effects which I haven't yet recognized.
Oh, yeah . . . my energy level?
It's good.


2011.04.11 Low-light photos on a rainy evening

It rained most of today, cleared just before sunset.
Great contrast for photos so I did a walk around the front garden after dinner . . .

And, finally, me and my point-and-shoot at the pond . . .


God seldom delivers…virtues all wrapped in a package and ready for use.
Rather He puts us in situations where by His help we can develop those virtues.
C. R. Findley


2011.04.10 Lower-carb eating . . . part 2

Just over 4 weeks ago, my son (John) , daughter-in-law (Theresa),
husband (Vince) and I began eating fewer carbohydrates.
It began with eliminating most high carb foods
such as bread, crackers, pasta, potatoes, and corn.
Not all, but most.
The obvious result has been weight loss.
Theresa lost 6 pounds, Vince lost 5 pounds, and I lost 4 pounds.
John didn't weigh himself, but has punched a new hole
in his belt so he can make it tighter.
We are continuing . . .


2011.04.08 Lilac

Budding common lilac . . .

2011.04.08 Quote

Have courage for the great sorrows of life and patience for the small ones;
and when you have laboriously accomplished your daily task, go to sleep in peace.
God is awake.

Victor Hugo


2011.04.06 Lower-carb eating . . . part 1

Four weeks ago, my family started an experiment.
It began because of this ~
[Reader's Digest magazine, February 2011]

As we (John, Theresa, Vince, and I) were talking around the dinner table,
(yes, we have family dinners most every evening)
conversation moved though lots of things,
but ended up on low-carb eating.
The science behind eating lower amounts of carbohydrates
includes how carbs affect insulin and blood sugar.
The positive effects on the human body are significant.

We decided to try lower-carb (not low-carb which is more stringent)
eating for our dinners for just a week to try this.
Theresa, who does all the cooking, and I did the meal planning
together to find new recipes and to modify existing ones
(yes, we have a meal plan each week
which greatly simplifies grocery shopping as well as dinner prep).

After four weeks, the benefits are obvious by stepping on a scale.
The unexpected side effects are also interesting.
More to come . . .


2011.04.02 Sisters . . .

I love my sisters.

Yesterday was Pam's birthday.
The three of us had dinner together.
We are each so blessed.


2011.04.01 Be a blessing . . .

7:40 a.m.
The sun is a perfect circle of neon orange.
The horizon is gray blue.
As if I was looking out on an alien sky.
A reminder of my small existence in a small planetary system.
God's universe.
God's love.
What can I do today to be a blessing to someone?
What can you do?