Learn Basic Bookkeeping
Two Courses Designed For Non-Accountants

These courses are no longer available as of December 2017. If you purchased the course, access to it will remain available until December 2018.

This chat includes information on some differences between Canadian and US GAAP, my favorite parts of John's course, and whether his U.S. courses are useful to Canadian bookkeepers.

I'll start this chat out addressing freelance bookkeepers. If you scroll down a bit on the page, I also chat about how this course could be helpful to a small business owner doing his/her own books.

Are you thinking of going into business as a bookkeeper?

Are you wondering if these courses could provide you with the knowledge base you need to go out on your own?

These courses WILL help you to build and / or refresh your knowledge base. However, keep in mind that in the long term, you probably need to invest in expensive training offered through recognized bookkeeping organizations.

You may also benefit from Gabrielle Fontaine's affordable eTraining on how to start a virtual bookkeeping practice. She shows you how to setup your internal business systems.

Remember freelance bookkeeping is more than just data entry.

My Favorite Parts Of The Course

I had four things I really loved about John's 20 hour course.

1. John builds this amazing blueprint in the form of a house that explains the theory behind bookkeeping succinctly. He has basically taken a lot of information and boiled it down into one diagram that is really easy to understand and remember. He "builds" the diagram a layer at a time so you don't get overwhelmed. The diagram explains why your financial statements are a useful tool for making business decisions. It's great to keep this buleprint near at hand to refer back to.
   
2. John takes you through all stages of a business's life. You will see the business transition from being a sole proprietor to a partnership; from a partnership to a corporation. You get to learn all the basic bookkeeping entries and how the chart of accounts differ for each structure.
3. John provides you with a list of routine procedures spanning the whole year for all three business structures.
4. John covers how each business structure is taxed in the U.S.. As I have some Canadian tax knowledge, I found it easy to translate it to Canadian tax requirements.

I chat about the differences I saw between Canadian GAAP and US GAAP here.

Learn The Basics Online Step-by-Step

Sorry, This Online Basic Bookkeeping Training is no longer available as of December 2017!

Are these courses for you?

The Heart of Accounting eBook introduces how debits and credits are used to organize and enter invoices and receipts into the company books so internal financial statements can be prepared. Once you have completed this 4 hour workbook ...

... move onto the more comprehensive online course Accounting for Non-Accountants where you will learn full cycle accounting. Upon completion of 20 hours of training, you will receive a Certificate of Completion.

You will likely need to learn things about the business you will be working in that are not included in either course ... but after these two courses, you WILL have a strong foundation to build upon.

Have you been hired as an employee to take care of the basic bookkeeping responsiblities of a business ... but don't have a background in bookkeeping or accounting?

Perhaps you are a relative of the owner (your child, your spouse or your parent) who has started a new business and you've been recruited to help because the owner trusts you to manage the money.

Are you a work from home business owner doing your own bookkeeping?

If these scenarios sound like your situation, I would like to introduce you to two courses designed by John Day, MBA for the non-accountant.

These two courses will make it possible for you to learn enough bookkeeping to prepare internal use financial statements without having to go to night school or back to college.

Basic Bookkeeping Differences
Between U.S. And Canada

In March 2010, I was studying to take my Certified Professional Bookkeeping exam.

One of the study materials I used was John Day's Real Life Accounting for Non-Accountants. This course, as I've explained, is designed to teach small business owners how to do their own books, prepare their own financial statements, and how to use the financial statements as a management tool.

The 20 hour course is written from a U.S. accounting perspective. I learned that some accounting events are treated a bit differently than in Canada ... which comes as no surprise.

As these courses are American based, Canadian bookkeepers will have to apply some (maybe 5%) of the information learned (recording capital assets and payroll taxes) into Canadian content. My website should help you do that.

Generally, basic bookkeeping using Canadian GAAP is very similar to US GAAP ... when dealing with small businesses that are NOT publically listed on the stock exchange, have a global presence, or have third party investors.

Canadian Treatment - Payroll

Payroll and payroll taxes is similar to the US but it is different. Check out this forum posting on Learning Canadian Payroll to learn the basic bookkeeping entries for Canadian payroll.

I outline the basic bookkeeping entries in my chat about Canadian Payroll Taxes.




Canadian Treatment - Asset Purchase With Trade-in

The latest accounting event I've come across that has a slightly different accounting treatment than in Canada is recording the trade-in of an asset while purchasing a new asset.

In Canada, any gain or loss on the disposition of the asset as a result of the trade-in is recognized as such. Follow the link above for the bookkeeping entries.

(Please note that I'm not addressing the tax treatment here, which is slightly different ... just the accounting treatment.)




U.S. Treatment - Asset Purchase With Trade-in

In John's course, any gain or loss on the disposition of the asset as a result of the trade-in is transferred to the cost of the new asset ... NOT recognized as a gain or loss on the income statement.

The two events are recorded in one bookkeeping entry. I have split it into 2 transactions to help you see what is happening in each event:

PART ONE - To record sale of trade-in asset and remove the sold asset from the books:

Debit (Decrease) Cash in Bank for trade-in value (current asset on balance sheet)

Debit (Decrease) Accumulated Depreciation - Sold Asset - or the proper account where the depreciation was booked (capital assets section on your balance sheet). This removes the AC related to the trade-in from the books.

Credit (Decrease) Sold Asset whatever that account was (capital asset on balance sheet). This removes the trade-in from the books.

Debit or Credit New Asset (capital asset on balance sheet) the remaining difference is the gain or loss made on the trade-in of the old asset.

PART TWO - To record the purchase of the new asset:

Debit (Increase) New Asset at full purchase price to recognize the acquisition (capital asset on balance sheet)

Credit (Increase) Bank Loan net proceeds received (long term debt on balance sheet)

Credit (Decrease) Cash in Bank for down payment (current asset on balance sheet)

This can all be booked in one journal entry ... so that the Cash in Bank that you actually pay out is the credit in part two less the debit in part one.

However, an AIPB newsletter (it's free) dated September 10, 2012 says "the new copier [the asset used in their example] is recorded at list price. The cost of the old copier [asset traded in] and its related, accumulated depreciation is removed from the books, and the loss is recorded." This is the same way we treat the transaction in Canada.

However, AIPB's July 27, 2010 free newsletter explained how to depreciate a group of assets. "No gain or loss is recorded when one asset in the group is retired. The account Group SUVs [used in their example] is credited for the original cost, and Accumulated Depreciation is debited for the same amount less any salvage value. The same depreciation rate is used as long as the estimated life and residual value remain the same."

It's possible and likely that John's transaction is recorded on a tax basis not a book (GAAP) basis. Why do I say likely? Because many small busines do not require GAAP records. Tax based financials are acceptable if it is disclosed as such.

Why Is Depreciation Referred To As Amortization In Canada?

Another difference in basic bookkeeping between Canada and the U.S. is the use of the word depreciation versus amortization.

It used to be, in Canada, that:

• depreciation referred to the allocation of tangible assets (like equipment, vehicles, office furniture, buildings);
• amortization referred to the allocation of intangible assets (like patents, goodwill, organization costs, franchise licenses); and
• depletion was used to describe allocating natural resources (like the oil in a reservoir).

In 1990, the CICA Handbook, in section 3060, began recommending the use of amortization instead of depreciation and depletion. Depreciation and depletion could still be used but it was felt that amortization was a more accurate terminology as some assets actually increase in value.

Around this time as well, fixed assets was replaced with the term capital assets.

Lease Obligations - U.S. vs. Canadian Treatment

This basic bookkeeping subject is discussed in the forum posting titled Vehicle Operating Leases.

Summary

These are just some of the basic bookkeeping differences I noticed while doing John's course. There may more differences than the few I've mentioned.

I have studied and practiced under Canadian rules ... so always followup. Get advice from a professional knowledgeable in your place of residence.

The information on this website is just that ... information not advice ... which helps inform and point you in the right direction ... or at least gives you an idea of what questions to ask when you seek specific advice from a professional.