 QuickBooks Online 2024. Write checks for expenses and prepaid assets. Get ready and some coffee because we're meeting the deadline with QuickBooks Online 2024. First a word from our sponsor. Actually we're sponsoring ourselves on this one because apparently the merchandisers they don't want to be seen with us. But that's okay whatever because our merchandise is better than their stupid stuff anyways. Like our trust me I'm an accountant product line. Yeah it's paramount that you let people know that you're an accountant because apparently we're among the only ones equipped with the number crunching skills to answer society's current deep complex and nuanced questions. If you would like a commercial free experience consider subscribing to our website at accountinginstruction.com or accountinginstruction.thinkific.com. Here we are in our Get Great Guitars 2024 QuickBooks Online sample company file. We set up in a prior presentation opening up the major financial statement reports like we do every time the reports on the left hand side. We're in the favorites. We have the two mandatory favorites kind of like if you had ice cream the chocolate and vanilla are kind of like mandatory favorites and most of the other ones are basically combinations of those two. So these have to be in the favorites. We got to right click on the balance sheet open link in a new tab right click on the profit and loss otherwise known as the income statement open link in a new tab and then you have the trial balance which might not be mandatory but you can see it's kind of a combination of the other two and I think should be and I recommend to have in your favorites. We're going to open that in a new tab as well. Let's tab to the middle close up the hamburger and we're going to scroll up and change the range 010124 tab 013124 tab we will run it so we can refresh it tabbing to the right closing up the hamburger scrolling up so we can run it again another rep on the run 010124 tab 013124 tab and run one more time one more time I didn't hear no bell we're going to push this last one out here we go 010124 tab 013124 tab run it to refresh it. Okay let's go back to the balance sheet here now we're going to be imagining it's basically the end of the month and we think about those normal type of transactions that we have to pay for at the end of the month so typically this might happen with a check form or these days with an expense form we're thinking about the normal kind of bills like the utility bill the electric bill and so on those that are going to be uniform or that happen very very all the time and they happen in uniform fashion basically every month these are the types of transactions that often you might use the bank feeds for so if I select the drop down you'll recall our options will be if we get a bill note that the bill that we receive has a different name than the more specific name of a bill within QuickBooks if we get the bill from the telephone company for example and I enter it as a bill that means we're increasing accounts payable and have not yet paid it will pay it off at a future time with the pay bill however if I get a bill from the telephone company or something like that and write a check for it then I'm not going to enter the bill as a bill form into QuickBooks but I will simply just pay it off with the check form the check form having a check number and will typically have a physical check the checks are going away these days because now we have these electronic transfers which means we have the expense form once again if I get a bill from the telephone company and I pay it off with an expense form then I'm not entering the bill into my system as a bill form but rather simply paying it off as it becomes due with a form similar to the check form but with no check number the expense form now if that is the case we're paying it with an expense form possibly because we're just doing an electronic transfer it's likely that we will simply wait till the check clears the bank we will do the electronic transfer possibly setting up the automated payments because that's just easy to do so it pays it out of our checking account automatically whenever the bill becomes due and then we set it up into our bank feeds wait till it clears the bank and then with the bank feeds we record the transaction and the form that will then be created will be the expense form we can also automate that process by making a bank rule to make that as easy as possible so that we have as little data input needed as possible we'll talk more about making bank rules and bank feeds in a future course or section just want to point out that this is the most common area where the bank feeds are going to be the easiest to put in place when you're doing electronic transfers when you're dealing with bills that are going to become do things that you are paying for that happen on a very routine basis like monthly such as the utility bill and which and which you can then set up bank rules for also noting that that's not the full accounting cycle when you do that because usually what happens is we should enter the transaction on our side and then match it to the bank with the bank reconciliation possibly with the help of the bank feeds we're no longer doing that with with the electronic transfers if you're depending on the bank to record the transaction because now you only have one person doing the transaction we're just copying what the bank did instead of using the bank to double check us but because we're becoming more and more confident with the bank feeds and because we don't have a long lag between the checks that we enter and when they actually hit the bank due to having to mail the checks and whatnot it's becoming more and more efficient and we feel confident more and more just entering the expense form and waiting till it clears the bank before we record it so that's what we're going to do this time so most of the other side of the forms if I go to the tab to the right we're going to decrease the checking account the other side is going to be going into the income statement typically now this is where we have the most need for us to organize our account types because when we sell stuff remember that we only have a few things that we sell we sell products and services we only have a few types of things so we don't have a whole lot of accounts that we're going to have in the income side of things usually but when we pay for stuff that we need in the business we may have a whole lot of accounts and that's where you need the most time spent organizing your accounts once organized it will be very easy because then you'll have a cyclical process and you can just see what you charged that vendor to last time also remember when we're making the chart of accounts we're not going to say name the chart of accounts by vendor I'm not going to call it like this is the Edison expense we're going to say no it's the it's the electric expense if it was Edison if it's a telephone I'm not going to say it's visa or AT&T we're going to say it's a telephone expense if you think about the bank feeds or entering the bill that you have received it doesn't say telephone expense on it typically it's going to say who it came from the vendor so when you have the bank feeds the first even with the bank feeds you will have to interpret the vendor and then see what the account is that you need to charge by what you used the vendor for why are you paying them what service or goods did they provide usually it will be some kind of expense account but not always so if I go to the balance sheet you can remember that we might purchase something like fixed assets so in that case you know if we use an expense form we could see it would go on the books basically as an asset type of account let's go to the first tab I just want to take a look at the chart of accounts in the sale or in the transactions on the left the chart of accounts you will recall we set up a new company file and when you set up a new company file QuickBooks gives you this massive chart of accounts because they don't customize it as far as I can tell they don't customize it at all to the information that you give them such as your company type is it a sole proprietorship partnership or a corporation and the industry that you are in do you sell inventory or not is it a service business or not that means that they give you this massive account to try to cover all of the bases so a lot of the balance sheet accounts you might not be using because you might not need all of that detail but and but remember that most of the transactions you have will decrease cash because you're going to be writing checks and the other side will go to an expense account so how can you manage the expense accounts is usually what what the idea would be well one way you can do it is you could try to make all of these accounts inactive and then simply recreate your expense accounts as you pay off your vendors that would be the most customized way to do it and and you'll end up with the with the only the accounts that you need to use however a lot of people are are are intimidated to do that because they don't want to set up their own expense accounts so you can use these expense accounts if you use these expense accounts then what you want to do i would think is to as you pay your new vendors you simply record the expense to whatever expense account looks appropriate whatever they provided you're going to have to search it out down here and find the expense account that you think is most appropriate if it's something similar but not exactly what you want then you can go in here and you can edit the account what you do not do in that case is make another account that is very similar but not exact because then that will lead you to end up posting things to two different accounts which is messy you'll have two accounts that are the same thing that you'll have to start posting stuff to and then only when there's not anything in here that you want will you add a new account and that might be the case that you need sometimes also if it's a sub account and you don't want it to be a sub account then you can edit it and you can make it basically to not be a sub account then after one or two months possibly three months of data input you can go into this chart of accounts and while you have your income statement open look at the accounts that you used and all the ones that you're not using remove them why because if you have a whole long chart of accounts when you do the data input it's a lot more tedious because you have to sort through all of these accounts that are not being used you're not using them so that would be the plan that's one way that you might do it use the accounts that they have then trim the chart of accounts down later after one to three months your system should be down and you have a routine and a pretty tight chart of accounts now the other thing I just want to point out is that some people really like these sub accounts so as you're making your chart of accounts the sub accounts are things that create a triangle these triangles over here let's go on the income statement are created by account types and then you might have other triangles that you can create yourself for a drop down of sub accounts now the sub accounts can be great but some people kind of go overboard with them I think if you put too much detail the balance here will be as to whether you have too many accounts in which case your profit and loss will be too long and you'll have accounts with only like five dollars in it or something like that if that might be okay some of them but if you have a whole bunch of accounts like that and there's just too detailed then you're getting too detailed most most likely if you add a lot of sub accounts then that's fine but it also adds two more line items to have a parent account and then a total account so you're going to get a long income statement if you do that other people they don't add enough accounts they just call like one account it's I just call it expenses they're all just expenses well that's not very detailed either and you're not going to have enough information to really even make the IRS happy to record it on your taxes if you just group them into one account you know called expenses so you have to be somewhere in between and note that it's not a perfect science here because because businesses are different people different businesses like to group their expense accounts different ways so although there is some some kind of general rules that you can that you can follow okay so let's do it let's go and open a check we're going to do it with check forms here even though a lot of people do it electronically these days but I want to still see the check form because that is what we will use with the bank reconciliation same process as with the expense forms except the check forms have check numbers on them remember if you have a check form you're going to have to actually have physical checks that you would put into the printer and use the printer to be to be printing out the checks you cannot print the checks on a blank piece of paper also the checks are ones that you want to track you don't want to wait till they clear before you track them because you want to track as the question is whether they cleared or not right because the bank's not going to know about it until it clears so let's say that we're this one's going to be safe insurance company so I'm just making up a check this we're going to imagine is our liability insurance so I'm just going to tap we're going to make a new vendor notice most of the vendors I don't need much information so I'm just going to say that's it that's all I need I'm not going to put a lot of detail in it unless it was a very important vendor to me such as the people that we buy supplies from and that if this was a bank fee transaction this information would not be in the vendors line but might be in the memo line the bank information detail line so you can copy and paste it into the vendor line which you really want to do because it's possible to record transactions with no vendor but you don't want to do that because then you lose the ability to sort your data by vendor so let's go ahead and save it and we're going to say it's coming out of the checking account tab tab let's say it happened on 126 kind of the end of the month that we're writing the checks 1007 is populating automatically if we wanted to print all the checks together we would say print later so that we can then print all the checks at the same time putting the checks into the the the check right the the printer to do so all right we have our two fields we got the cat the category field where we're just going to assign a number to it an account number and the item field which we would use if we're buying inventory so we're going to use the category field this time because we are just simply paying off expense forms nothing special here all right so the account now the insurance I started off with one that's a little bit funny because that if it was a telephone expense note that you usually get the telephone bill after you you used the telephone right that's how they create the bill but with insurance by definition by the nature of insurance means that you're paying for it before the coverage happens so if you're paying for liability insurance you have to pay for it before the coverage happens if if an accident happens in the future then you have to have paid for the coverage in the past so that means it's really a prepayment that is happening now if you pay your liability insurance monthly then you might be able to get away with just expensing it as you pay it but a lot of times it's cheaper to pay the liability insurance by year for example and in that case you're going to distort your income statement a bit if you if you record it all in one place and and just to point this out we'll talk more about this in a future section when we talk about adjusting entries but it's the same concept as we saw with the equipment which is the extreme example meaning if you bought if you bought a building for cash of a hundred thousand dollars and you just expensed it to the income statement as building expense you would end up with a huge loss in income and it wouldn't be able to compare year to year or month to month with another month because of that loss so that that's why you put the building on the books as an asset rather than simply expensing it even if you basically paid cash for it now note with the property planting equipment because the building is is is an estimate you still have one building or in this case one piece of furniture if that was one piece of furniture or equipment that as time passes it depreciates it goes down in value because we have to estimate that that's why you end up with this contra account with when we talk about insurance it's similar meaning when I buy the insurance if I was to put a whole year's worth of insurance on the income statement in january and then compare january to february then that's going to cause a problem because the insurance was is going to be consumed and is benefiting both january and february equally even though we paid for it in january so the idea from an accrual standpoint would be to put it on the books as prepaid insurance and and and then well as time passes we will write it off now we don't have to estimate it like we do here we know exactly how much of the insurance we have consumed over time because if it's a year-long coverage we just say this is how much coverage has been consumed now if you're a small business note that you might just expense it anyways and try to just do it for tax purposes because that would be the easiest thing to do and just tell your tax preparer at the end of the year whatever i need to do for for tax purposes this is my insurance policy you know do what you need to do for whatever purposes you have at the end of the year for external reporting possibly to get a loan or something like that insurances you know they can make an adjustment for it or but we're going to put it on the books as an asset so we can do the prepaid insurance because that's the typical thing you would want to do from an accrual standpoint so if i looked here we could we could try to find insurance insurance and of course they have an expense for insurance that's the parent account sub-account rental business and so on but they don't have a a asset account for insurance so i'm going to call it prepaid insurance i'm going to just type in prepaid insurance that's not how you spell it you can't spell i know i can't i did i'm an accountant okay prepaid it won't let me do spell check because it wants to do the drop-down insurance okay tab and then we should set it up so it's going to be this one is not an expense i'm going to make it an other asset form and we're going to say it's going to be some kind of prepayment so it's an other asset i'm just going to call it other long-term asset prepaid insurance it's not going to be a sub-account that would be the triangle where you have the sub-accounts and that's it i don't really need any added description i'll just keep it as is boom and no description now on the description you might want to put like a memo that shows the period that is covered so that you can say this is the this is the year that is being covered if you had that so then i'm going to say it's 12 000 so 12 000 for the whole year of coverage means it's going to be one thousand dollars a year we made it like even so and then if i was to make it billable we would only do that if we wanted to then use this to pull over to an invoice which isn't typically what you would do for paying the insurance then we we could add a memo we have the attachments we can cancel clear print the check order checks make it reoccurring we have the more options of the void we can save and close it we can save a new it what's this going to do when we record it it's a check decreasing the checking account other side not going to an expense this time but rather going to the prepaid insurance let's save and close it and check that out let's go to the balance sheet run it again and then we're going to go into the checking account and check out that check we'll see there it is there's the check 12 000 decreasing to the checking and notice that the bank doesn't know about that yet because it's not going to clear the bank until they get the check someone whoever whoever has to receive it receives it and then they deposit it that's why we cannot wait till it clears the bank because we need to know about it now we have information the bank does not have let's go to the prepaid insurance there's the 12 000 in prepaid insurance which we will expense periodically using the adjusting process at the end of the month or year which we will do in a future course or section let's go to the first tab if we were tracking this internally we can then go into the expenses if we wanted to and we can go into the expenses tab one way that we can take a look at it select the drop down and say we want to be looking at the check forms checking out the check forms there it is and we could filter the check forms if we so choose and so on and then I can go to the vendors and we could look at the paid in last 30 day that might work and then if I go down here we paid uh I don't see it there let's go back let's clear the filter and what was that who did we pay save here it is that yeah I think it was there there it is and then we can see the detail of the check now note if we just wrote a check we don't need to go in here as often unless they have a complaint that the check got lost in the mail as opposed to if we were tracking the accounts payable because then we would have to track the out track the outstanding bills and pay them at a later time all right let's do another one hitting the plus button again we're going to add a check and this one I'm going to say is Edison Edison that's the electric company in the United States so or one of the areas so we're going to say let's save that that's going to be the vendor all I need is the minimal information to get the check out and we're going to say it happened on 126 okay check number populating automatically that should match the physical checks that I have whether I print them out of the system or possibly I'm just entering I'm just writing physical checks and tying them out to what is in the system we still have that internal control now when I look at the categories here I want to open up the category I'm going to right click on this tab duplicate it pull it to the left because I would like to see the chart of accounts because this is one I'm going to close this out and we're going to go to the transactions chart of accounts close in the hand bogey I'm going to scroll down all the way to the bottom and then I'm going to go to the next tab and then I'm looking for the utilities so electric see it's under utilities now this is one where you have this question of how do you want to be recording things this looks very detailed to me it might be a perfectly fine way to do it because it would show up as a parent account of utilities and then and then these items within the utilities that's one way you can do it these days it seems to me that the telephone is it used to be a minor expense but now it's so large that it's probably I think it doesn't really fall under utilities for most people's thinking anymore I just give it its own account I wouldn't even house it under utilities anymore right that and whereas the electric and the water for example then I might still kind of combine those together that's how I currently see things I don't put the internet under utilities personally because I feel like that's more under computer expenses I would rather have I think that's like its own thing to me these days but why is it here because it's kind of connected it used to traditionally be connected to the phone line so you can see where where like you might have one line called utilities and you add all these things in it and that would be fine if these were minor expenses but you can see what has happened over time some expenses have been become major or some industries will have expenses that are more major so the telephone traditionally not like these days I think is major for most companies don't think of it as utilities oftentimes anymore and and again I would think the same could be with the internet I would think of that as a major computer expense not really a telephone type related expense it's not even you know it's a different thing to me these days so I would put those into their own account and then I usually put the everything else electricity into utilities but if electricity if I had a business where I'm growing plants or something and I have lights I'd be consuming a lot of electricity so I would want it in its own account if that were if that were the case so I'm talking here about the the electricity I'm just going to put it into utilities then which currently is the parent account also note that if I go back on over here you wouldn't normally post anything to the parent account you would post to the to the sub accounts but I'm probably going to remove all the sub accounts and just use the parent account I'm probably going to replace this telephone put it into its own category and not make it a sub account I'm going to plan on doing that later so that's part of my adjustments that I'm going to make to their their accounts all right so the the amount's going to be 620 let's say I'm not going to make it billable or anything like that what's this going to do reduce the checking account the other side's going to go into an expense of utilities let's check it out save it balance sheet cash we've got a check to check out in the checking and so there it is Edison bill boom the other time this time goes to where it usually would go the income statement going to the income statement otherwise notice the P&L the profit and loss so now we've got our expense the utility bill bringing down the net income all right let's do another one let's go back to which tab am I let's go to this tab and then hit the plus button and we're going to do another check another one yes another one this one's going to go to Verizon which is a telephone company here and we just need the name I don't need any detail I just need to pay these people so we're just going to check number populating automatically and then in the detail so now I need to let's check out that the general ledger over here again for the telephone so again they put it under utilities to me doesn't sound right I don't like calling it phone service I'd rather call it telephone expense personally so I'm going to select the drop down I'm going to edit this one instead of adding another account that's called telephone because then I'll get confused and I'll start posting to the two accounts and that would be ugly so let's hit the drop down and we're going to say let's just I'm just going to call this an expense so I'm just going to bring it up to the category of expense not making it a subcategory and then I'm going to say for the tax I won't do a tax when I'm just going to call it telephone expense telephone expense that's a much better name porfa for the crying out loud lower porfa for the crying out loud for porfa for practicing my spanish my spanish english they won't let me save it k for pizza a posseau here k posseau k for pizza I'm going to go to the tax form they need they want a tax form line item so I'll put it I guess under utilities here and then we'll save it let's save it again and then we're going to go back to the check and then this is going to be telephone telephone expense there's the one there's the one four hundred and ten we're going to say it's not billable or anything what's this going to do it's going to be decreased in the checking account the other side's going to go into the expense account of telephone expense on the income statement otherwise known as the profit loss P&L so let's go ahead and this time instead of saving clothes we'll check it out later and just do a save a new and we'll do another one and this one I'm going to say is staples which is a supply store so an office supply store all I need is the vendor name we're going to say it's from the checking account same date check numbers checking out and then down here now note that the supplies is another one where we could have a similar situation where we have a prepaid situation or we might just expense it so for example if I go to the balance sheet remember it's the same kind of concept where you might say well with with the fixed assets if you had the building and you just expense the building to building expense for a hundred thousand dollars it would make the income statement look like you had a huge loss in january making it uncomparable we saw a similar thing with the prepaid insurance where we thought that it might be good to put the prepaid insurance on the books because we paid for a full years of insurance so that we didn't expense the full year in one period because then you wouldn't be able to compare period to period you could have a similar thing with supplies so if I bought a whole if I bought like medical supplies for example and they become quite expensive if I'm buying drugs or something that likely people are going to try to steal or things like that you got crazy people with their eyes all you know whacked out trying to steal your your drug supplies and what not well then you're going to have to manage them a little bit more closely and treat them more like inventory so you might then put the supplies on the book books as an asset you might even track the supplies basically as inventory in that case count the supplies and then use a similar kind of flow assumption method to expense the supplies as you consume them however if you're if you're not so worried about that I mean if you if you're buying stuff that you know the you know the people with their crazy eyes are not trying to get into your supplies and break into your break into pet shops or something to steal whatever kind of medicine is in there or anything then maybe you don't have to have as many internal controls and you can and you could then just expense the supplies as you go possibly you might also think of a dollar amount right if you're just buying staples or something like that and even if you're buying a year's worth of supplies you might just simply expense them when you purchase them that's the method that we're going to use here we're just going to expense the supplies just note if you look at textbooks oftentimes the supplies are often used as an introduction to tracking inventory meaning they put it on the books as a prepaid asset and then they expense them in a similar way as you would with inventory and then they go into inventory but in practice a lot of small businesses will simply if it's under a certain dollar amount record it to supplies now note that when you buy supplies this staples store you might also buy and I don't think I spelled that right I'm sorry but you might also buy like large things from staples or something and if that were the case you might set a dollar amount to help you to determine whether or not something should be recorded as supplies or possibly a fixed asset because if you buy like a lot of equipment from the same store you might categorize it as a fixed asset if you're setting up bank rules which will do in a future course or section you can create a rule based on the dollar amount and say hey look if it's above this dollar amount I don't want you to treat it the same way I don't want you to just expense it I want you to possibly put it on the books as an asset we'll talk about that later though this time if I type in supplies to see what quick books has here notice they have supplies and then they've got the sub account of office supplies and supplies and materials I feel like that's redundant so I I think that I don't think they overdid the these these two accounts down here I just want some generic supplies account so I'm going to use the parent account that they put in place and then possibly delete these two or make them inactive so I'm going to use the parent account and then I'm going to say just $500 in the supplies all right so let's record at this time I'm going to say save and close let's check it out let's go to the balance sheet we'll check out those last two transactions running the report again going into the checking account and then we can see down here that we've got the Verizon in staples both of those checks going out that's what we would expect the other side on the P&L profit loss income statement as expenses so we've got the telephone expense and the supplies expense bringing down the net income so that looks good now I mixed up the check numbers on a couple of them because I want them to be matched up to what we have on our bank statement when we get to the future course or section for the bank reconciliations so one of them is for the Edison so I'm going to I'm going to drill down on here and show you that you can edit some transactions once entered but you have to be careful doing this I'm going to go into the utilities and I'm going to go back into this form I want to make that 109 because that matches what I'm going to be doing when we get to our future bank reconciliation process so I'm going to save that one save and close it's going to say you already have that one that's okay because I'm going to change the other one so then I'm going to go back the next one is the Verizon one which was the telephone so I'm going to drill down on the telephone and I'm going to go into that one and I need that one to be according to my information here 1010 and then I'm going to say save and close it's going to say hey you already have one of those I know I'm fixing it all right then I need to change the staples one too so I'm going to now I'm in the income statement I'm going to go into the one that went to the supplies and this one I'm going to edit it I'm going to go into that one and make it uh the staples one needs to be 1008 which I don't think we have used yet because I changed it so we'll save that okay it didn't give me an error that's good or a double check let's go to the balance sheet and just check those out on the balance sheet so I'm just going to drill down on the checking account to check out those check numbers so I'm going to go down and say okay we've got Edison is 1009 Verizon 1010 and staples 1008 that's the numbering that I would like to have if you don't have it that numbering it's okay we'll still be able to do the bank reconciliation but the numbers won't quite line up which sometimes happens if there was an issue with the numbering system but that's an internal control that we want to look at all right let's go back to the internal information back to the left we know that if we went into the expenses tab now we're sorting by the checks here's the checks that we have entered we're not likely to have to do this as much as if we entered bills because of course if we entered bills then we have to pay the bills at some future point so if you have a cash based system you're paying the bills as they become due with a check instead of entering a bill form into the system a bill form increasing the accounts payable a check simply just decreasing the cash as the amounts that you owe become due then you don't have as much management of the of the vendors if I go into the vendor side of things then of course we can look at the last paid transactions and this should give us the last paid I tried this last time but there's staples here and we have Verizon and Office Depot so let's just go into staples for an example there's our actual check we can look at the detail for the check drilling down on it all right so obviously once we have the check the next step is it's going to clear the bank once it clears the bank it'll come in through the bank feeds if we're using bank feeds so that we can match what we entered to the bank and that's going to be part of the reconciliation process whether we use bank feeds or not we're also can do the bank reconciliation if you use physical checks then entering the check first is important because you need to track if it's an outstanding check all right so this is where we stand as of this point in time here's where we are with the balance sheet it's balancing balance the sheet I can balance the sheet on my finger like a basketball because it's evenly weighted I'm going to then go to the profit and loss if it's spinning you'd have to basketball has to be anyways here's the income statement that's where we stand here's our expenses that have been input down below let's go to the trial balance to check out our numbers run it to refresh it here's where we are at if your numbers tie out to these numbers that's great if not then try changing the date range see if it's a date issue drill down on the date offender and change the date if that's the case let's just remember this is balance sheet on top of the income statement so balance sheet asset account checking account accounts receivable asset inventory asset investment asset payment to deposit asset accumulated depreciation funny contra asset intimately linked to the furniture and equipment account the prepaid insurance and asset account that we set up accounts payable the first liability so the assets one side of the coin what do we have the liabilities in equity the other side of the coin who has claimed to those assets third party liability people the vendors the bank for the visa credit card the government wants the piece and then we've got the loan payable the bank again and then we have our claim of our own business that we if we liquidated it this is in theory what we would get if we scrunch it down to one number which would be a credit we've got the owner's investment we got the owner's equity we got the sale of products and then the services the two sales this is the income statement and then all of the expense accounts note that you're seeing a lot more debits down here and remember that that who has claimed to it is a credit balance why is it a credit balance because the debits should outweigh the credits and we're just telling a year's worth of the story of our business which is a very interesting tale i'm sure you will agree thus far so if i add this up 46877 plus 5180 minus 37242 minus 500 minus the 410 minus the 620 oh i missed up the 620 dang it let's do it again 46877 plus the 5180 minus 37242 minus 500 minus the 410 minus the 620 we get to 13285 13285 what's matching on the bottom line of the income statement back on over to the balance sheet if we scrunch this into one number by going to the next year 2025 05 to 1231 05 we could have done it no not 05 what are you talking about i don't know i like saying 05 it sounds better so now we're at the 13 so this has now increased to the 91 181 because it added the 13 to the equity nothing's on the income statement that's how the balance sheet is related to the income statement