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Accounting Basics by Hector Garcia, CPA, Hector explains accounting basic and Financial Statements basics with QuickBooks reports.

Hector explains in a very simple way, how accounting works. We cover Accounting Principles, Profitability, Solvency, and Liquidity. Reports: Profit & Loss and Balance Sheet. And finally, discuss the concept of DEBITS/CREDITS for Journal Entries. We use QuickBooks to illustrate a few examples of reports and how to do the Journal Entry.  It is extremly important for any business owner, bookkeeping, or staff member working in QuickBooks to understand accounting basics, specially identifying the differences betwen Cash and Accrual Basis of Accounting.  This course will teach you those.

Cash Versus Accrual Basis of Accounting:

• Cash Basis is when you only report sales when you receive payments and recognize expenses only as you actually pay them. Many taxpayers file their tax returns in  “cash basis”, but they should still manage their business/accounting in accrual basis

• Accrual basis means we recognize sales when they are earned regardless of us receiving a payment or not. Expenses are recognized as they are incurred regardless of us paying them. Accrual basis wants to measure activities not payments; we still asssume payments will eventually be made.