Accounting, Payroll & Pension Issues/Probably a simple bookkeeping Question
I have recently begun bookkeeping for a very small business, and it seems I have forgotten some of the steps in bookkeeping. I'm actually a freshman in college - I took financial accounting two years ago.
I'm confused with my Owner Equity account everything else seems to be ok. and maybe a little bit regarding COGS entry.
To briefly put it it's not entirely a business, you could say a hobby?
I may have forgotten a little more than I thought. --> Breakdown
Decided to start this bookkeeping with exact cash.
1) Invested $64.06 Cash
2) Purchased goods for $49.06
3) Cost to ship those goods $15 to me
So I managed to get my Income statement to match up correctly, but now I'm having issues getting my Owner Equity to balance a=l+o.
At the moment i'm figuring all I have are my assets, no liabilities, but my current $0 cash, and $49.06 inventory doesn't match up to my $64.06 investment. (this is a difference of $15 - the shipping). I'm not sure how to write this in my journal
Thanks for the help
As you said, the $49.06 of purchases is inventory. Normally, the shipping is included as inventory cost, so inventory would be $64.06 = $49.06 + $15.
Shipping can be an expense or an inventory cost; as this is to acquire inventory it should be an additional inventory cost.
To record the initial cash infusion, the offsetting credit is to an owner's equity account.
So, the end result would be:
I would suggest your acquiring bookkeeping software; Quickbooks and Peachtree are well known.