Introduction to Accounting Preparing for a User’s Perspective Introduction to Accounting Preparing for a User’s Perspective www.canvas.net Free Jan. 2014.

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Introduction to Accounting Preparing for a User’s Perspective

Introduction to Accounting Preparing for a User’s Perspective

Introduction to Accounting Preparing for a User’s Perspective

Introduction to Accounting Preparing for a User’s Perspective

Introduction to Accounting Preparing for a User’s Perspective

Introduction to Accounting Preparing for a User’s Perspective

Introduction to Accounting Preparing for a User’s Perspective

Introduction to Accounting Preparing for a User’s Perspective

Introduction to Accounting Preparing for a User’s Perspective

Introduction to Accounting Preparing for a User’s Perspective

Introduction to Accounting Preparing for a User’s Perspective

Introduction to Accounting Preparing for a User’s Perspective

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Presentation transcript:

Introduction to Accounting Preparing for a User’s Perspective Introduction to Accounting Preparing for a User’s Perspective Free Jan Free Jan What general types of business exist? Available on the Google Play Store with support from By Kevin C. Kimball, CPA Debits and Credits Trainer

Image source: Legalflip.com Ownership Structures LLPs

Service Provider ManufacturerWholesaler Retailer End Consumer Hybrid 2 or more of the other types

Raw materials Labor Manufacturing Overhead What is a manufacturer?

Raw materials Labor Manufacturing Overhead Finished Good

Manufacturer Wholesalers Retailer End Consumer

Manufacturer End Consumer Retailer

Production Costs $.30 Sales Price $1.00 Raw materials $.15 Labor $.05 Mfg Overhead $.10 Gross Margin $.70 - Cost of Goods Sold $.30 = Gross margin $.70 - Operating expenses $.20 = Operating income $.50 Rent Supplies Utilities Admin

What is a wholesaler, distributor, middleman? Manufacturers Retailers Wholesalers Distributors Middleman Consumers Wholesale Retailer

Wholesale Retailer Consumer Retailer

Middleman Manufacturers Retailers Consumers I need to: catch more crab, catch more crab. I need to: buy low, sell high, find more retailers. Question: How is the crab? Sales price $10 - Cost of Goods Sold (4) Gross Margin 6 Answer: It kind of sticks to my tongue.

Sales Price $ Cost of Goods Sold $4.00 = Gross margin $ Operating expenses $5.00 = Operating income $1.00 Salaries, wages, commissions Admin Transportation Communication

What is a retailer? Manufacturers Retailers Wholesalers Distributors Middleman Consumers Wholesale Retailer

- Cost of Goods Sold Sales Revenue Gross Margin $50 Purchase price of what was sold. Sales price after marked up to retail. Gross margin to cover operations. $150 (100) $50 gross margin / $100 cost of goods sold = 50% Markup on cost

Gross Margin $50 Utilities Salaries, Wages, Commissions Rent Advertising Admin Net Operating Income $10

What is a service provider?

Professional Services Education Healthcare Shipping

TIME EXPERTISE

How much? $2,015 Hammer $ 15 Where to hit $2,000 Total $2,015

We need you to: Work more hours Hire more Work faster smarter

I spent the last year fixing dams. Salary expense $80,000. = Gross margin $120,000

What is a hybrid business? Includes 2 or more other business types

Consumer

Service Provider ManufacturerWholesaler Retailer End Consumer Hybrid

Introduction to Accounting Preparing for a User’s Perspective Introduction to Accounting Preparing for a User’s Perspective Free Jan Free Jan What general business models exist? Available on the Google Play Store with support from By Kevin C. Kimball, CPA Debits and Credits Trainer