I was asked to write an article on Accounting. This is a VERY BROAD topic. There are also very significant differences in performing accounting for a security in receivership or a corporation or even a trust. I try to perform all the duties that I am APPOINTED to do, but this one is quite the challenge. So I have a better idea. Let’s have an interactive thread on strictly ACCOUNTING. Ask your questions here and I will try to show you what the answers are and how you can verify them.

Remember, these are GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. Its not like they are written in stone or anything, they seem to be generally accepted.

Also, if you are afraid of getting audited or afraid of the questions that may arise, go join a freedumber group. Enforcing your rights takes a little balls. An audit doesn’t automatically mean that you did something wrong. It means that the people who’s signature is on the money want to check and make sure that everything ADDS UP….that is what accountants do

Comments:

Yes…everytime that a transaction goes from one party to another (such as a bank deposit), one parties debit is the others credit. For example, when SGMI does a job for $1,000 and receives payment, A/R is credited and the Bank account is Debited. On the customers end, the Bank Account is Credited and the A/P is Debited.

Now, they have all lied to you by showing you how to keep a CHECKBOOK REGISTER. You can go look and THIS IS NOT A LEDGER.

Your register is backwards…I suspect that this is so you wouldn’t realize the value of Debits and Credits. These Registers are opposite of the Ledgers.

The big thing to understand is that this is how you follow the money. You have to realize that Assets have a Debit balance, BUT BOTH Liabilities AND Equity/Capital Accounts have a Credit balance.

There are no synonyms in law and there are no homonyms. Liabilities and Equity/Capital Accounts BOTH HAVE A CREDIT BALANCE.

You will be fucking pissed when you follow the money.

So a CREDIT can either be a LIABILITY or an EQUITY/CAPITAL account. Lawyers have taken all of the later and left you with on the former! They did this in the name of . The government said it was totally cool too….except the government is filled with AGENTS of the BAR ASSOCIATION.

I am not sure this can be any clearer.

This violates every magic parchment that I can think of too! They had to make special rules back in the 30s, which they now routinely ignore, simply to get acceptance for this!

The reason you would do it this way is to build the credit of the corporation. If you loan the corporation money and Discharge the monthly payment, you wind up with an Capital/Equity (credit balance account as Neens Jean will point out) position instead of a party owed (liability, also credit balance).

The deposit of the asset means that there has to be an equal and opposite credit entry. The easiest is to credit an Equity/Capital account, but then you wouldn’t discharge the monthly payment and build the corporations credit. By crediting a liability account, you can discharge a monthly payment and build credit.

It’s really very simple when you look st the accounting. both liabilities and Equity/Capital accounts have a credit balance. If i was running a business, which I am, I would want the most assets and the least liabilities.

Equity/Capital…it would depend how it got there. If it gets there through “retained Earnings”, that’s expensive. There’s rules about taxation on these earnings. 🙂

Accounting is transaction driven. If I come into possession of $1,000 cash and I DEPOSIT it into a corporation, the corporation can either owe me (liability) or account for it in a Capital account. “Shareholder equity” or something like that. I’d have to look at SGMIs to see how we do it.

You cannot move a liability to an equity on its own. There would have to be another ACCOUNT

I guess I COULD DEPOSIT SGMIs checks into a holding company and loan it back or give it back upon demand. 🙂

One way happens through Capital/ Equity accounts, the other through liability accounts.