Krumm & Associates Certified Public Accountants & Consultants
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Q. Mr. and Mrs. Dewey opened a grocery store. They maintain their records on their personal computer using their Mega-Money Saving Software (i.e. Quickbooks) and keep track of all checks and deposits. Their system is in compliance with the IRS? A. False. While they track their deposits and checks, this would indicate a cash basis system of accounting. One of the largest assets of any grocery store is inventory. The presence of material inventory would require an accrual system of accounting by the IRS. Frequently, internally prepared financial statements are not acceptable by various financial and insurance companies. Balance sheet and income statement preparation can consume valuable time and/or have serious tax consequences if not done properly. For further help in preparing a balance sheet and income statement, or having one prepared for your business, please contact our office.
