Basic Accounting Info that every business owner should know


Q: What is the difference between a corporation and a proprietorship?

An incorporation is an entity independent from yourself. A separate tax return needs to be filed, and tax rates and brackets different from personal income tax rates.

A sole proprietorship is an entity that is associated with you personally. So when filing income tax, the rev eye and expenses that the business has incurred in the colander year must be applied in the other business income section of your personal income tax. Tax brackets and rates are applied.

Q: When Do I know I need to hire an accountant for my business?

It is best to the foundation on all aspects of your business strong from the get-go. Therefore, it is strongly suggested finding an accounting firm that is within your budget and you are comfortable with to record your bookkeeping and accounting transactions regularly to avoid having to complete your full-year cycle when it’s close to the deadline.

Q: Bookkeeper VS Accountant

A bookkeeper is trained to record a company’s financial transactions into a general ledger on a software of a client’s choice. A bookkeepers responsibilities also entail of bank credit card reconciliations, gst.qst filing, preparing year-end reports to provide to the accountant who will handle the tax filing. An accountant takes care of the more complicated part of the accounting cycle. They will complete the incorporation tax returns Federal (T2) Provincial (CO17) as well as prepare the notice to the reader, which is also known as a financial statement. Accountants also are hired at times to prepare financial provisions, provide financial consulting and various tasks that need professionals expertise.

Q: How often should I do my Bookkeeping?

A: Business owners can complete bookkeeping tasks as often as they want, but it is recommended to complete bookkeeping takes regularly, since the business activity will be fresh int he owner’s mind and easy for the bookkeeper to record all revenue and expenses more accurately.

Q: Why is Reconciling Business Accounts so Important?

A: Recording business activity into a detailed general ledger is the first step of bookkeeping. After this step is completed, it is essential for the company accounts to balance on the balance sheet to match all ending company bank and credit card balances. The process of reconciliation does just that. Once company bank and credit card statements are reconciled, they reflect the accurate ending balances reflecting on the companies statements.

Q: What are the Returns I need to File?

A: Depending on what your business is registered for, here are a few mandatory filings for a business.

⁃ corporate tax and financial statements (government provides a six-month grace period to file from the fiscal year-end date)

⁃ GST.QST Filing (depending on how often you have registered to file)

⁃ If Monthly, you must file the prior month’s gst.qst by the last day of the current month. Example: November 1st to November 30th, will be due on December 31st

⁃ If Quarterly, you must file the previous three months’ gst.qst by the last day of the current month. Example: January 1st to March 31st would be due by April 30th

⁃ If Annually, there is typically a three-month grace period to file for the past year’s activity. Example: January 1st to December 31st would be due April 1st to 3rd.

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