Opening Balance for New Client

Yes you need begining balances, assuming he had an open checking account on 12/31/07. You need to get his last reconciled bank statement and use that as a starting point. Will you be doing his monthly bank reconciliation? Does he in fact have a business account not part of his personal?

Don't take this personal but your question makes me wonder about your knowledge of accounting. The bank balance will be offset to the equity, no entry in the income portion.

If you need help that is why we are here. Good luck.

You mentioned that the new client hasn't done any bookkeeping since January but what you did not clarify is if this is a newly formed business. If it is, for the most part you are starting from ground zero. However, if it is not, I would ask for a 12/31/07 Balance Sheet and a copy of the 2007 Tax Return to ascertain what your beginning balances should be.

Hope this helps,

Joyce

I encourage you to study the nature and the differences of the balance sheet items and the income statement items. If you ever remember that the heading date of the balance sheet reads as "As of " while for the income statement, it reads as "For the year ended".

What is my point on that? For you to differentiate that the income statement items are for a specified period only. Take for example the prior period transactions of your client, since it was from last period transactions, then, it will never be an income statement elements this year. What will you do for that? Well, determine the net effect of the last year income statement elements, then, add that to your beginning equity. Yes, you have to effect any taxes on last year transactions. Again, the tax recording is another problem on whether to record tax expenses this year for last year transactions or note that as last year adjustments. Well, just remember the TIME PERIOD ASSUMPTION on the conceptual framework on accounting.

Do you need to carry any balances from last year account balances? Definitely, yes, because the company started operating last year not his year.

Hope it helps.

ALL THESE ANSWERS ARE VERY GOOD. BUT WANTED TO REMIND YOU NOT TO FORGET THE DEPR ASSETS.