Something From Nothing

(c) INGENIUM HOLDINGS INCORPORATED under a Creative Commons 3.0 Unported License; BY-ND-NC

If you’re like me, for most of your life you’ve had minimal conscious interactions with ACCOUNTING, It was always presented to me as something very boring and complicated so I'd always avoided learning about it. While embracing my love of ignorance I COULD NOT SEE how this ABSTRACTION was being used against me every day or how I could use it for my benefit.

ACCOUNTING is the MECHANISM used to REPORT and give a REASON for the TRANSACTION, the DEBIT(S) and CREDIT(S) must always balance and that's ALL there is to it. Follow the Generally Accepted Accounting Principles and keep yourself a JOURNAL. ACCOUNTING is a TOOL that one doesn't have to use, look at any poor person, it's why they're poor.

CONSUMERS love having someone else do their ACCOUNTING for them for "free", PRODUCERS have to do their own ACCOUNTING or hire someone else to do it, Consumers DO NOT have a BALANCE SHEET, Producers DO. Producers are required to PRODUCE financial statements that describe the changes in ASSETS, LIABILITIES, AND EQUITY, financial statements are just an aggregate of TRANSACTIONS for the period written on their face, all WE have to focus on in ACCOUNTING are the things WE already do every day:

TRANSACTIONS (spending or receiving money). 😄

One can START DOING ACCOUNTING with a CORPORATION that is "getting ready" to produce something, "getting ready" should be read as "hasn't yet". I'd call such an ENTITY a “Start-up”.

I don't see how it is possible to have the money available to START a business without FIRST having CORPORATE ACCOUNTING available as a TOOL. One may, or may not use their "pocket money" to FUND their ORGANIZATION's operations, these entities are called SHAREHOLDERS or INVESTORS because that's their relationship to the CORPORATION and the PROPER TERM, no?

By using EQUITY this way we create a DEBT that is owed to the SHAREHOLDERS, understand that DEBT FINANCING is simply a DEBT to CREDITORS (not SHAREHOLDERS), so WE would rather OWE someone who won't rob us.

I no longer have this limiting idea that DEBT FINANCING is the only way to "Start-up" a business, DEBT FINANCING doesn't work for everyone in the beginning and the RULES should ALWAYS WORK FOR EVERYONE.

_________________________

There is only one TRANSACTION I began with, it was the most important TRANSACTION I found, and I spent a lot of time trying to understand it:

    Dr Cash (See: YOUR Paycheck)

        Cr Common Stock (See: Corporation’s No Par Value Shares)

And a NEW DEBT is created.

AND WE MADE IT OUT OF NOTHING BUT AN ACCOUNTING ENTRY!

__________________________

It may not take long for one to realize that all the transactions and receipts WE cause to happen each day can be put on the CORPORATION'S books as long as there is a REASON for it and WE are TRYING to MAKE MONEY. I won't spoil it for you, the reader, but seeing the REVENUES come in later is part of the VALUE that Derek Moran will never discover. 

WE (A [indefinite article] REGISTERED AGENT, along with A CORPORATION) only need to describe, by following GENERALLY ACCEPTED PRINCIPLES, how each ACCOUNT of the CORPORATION was DEBITED and/or CREDITED and WHY, if the books don’t balance the AGENT may become ACCOUNTABLE under the TERMS of his AGENCY agreement. Balance the books first and always, accounting and agency, in that order.

AN ORGANIZATION CAN ONLY ACT THROUGH ITS AGENT(S), This is why Step 2 of Chris' Four Steps and Step 5 in Scott’s 8 Steps is useful to ponder, it’s also useful to ponder SURETY at this point. If one finds they can't make any headway on Scott's 8 Steps then START by understanding Chris' Four Steps. If one can’t make any headway on Chris’ Four steps then go back to and START at “Registered agents act as currency exchanges”, If that has you stumped then START again at LEGAL = SURETY & ACCOUNTING, and DO the damn ACCOUNTING.

The BOOKS MUST BALANCE after EVERY TRANSACTION, ALWAYS! Your Bookkeeper and/or Accountant will take care of everything else but one's goal might be to learn from them and get smart enough to figure out if they're lying or incompetent.

You’re going to need accounting software that won’t allow MISTAKES, Quickbooks Online is great if you have no experience with Accounting and/or Open Source software, plus it's a $30 per month TRANSACTION that you have to figure out how to ACCOUNT for. This is not an endorsement for or recommendation to use Quickbooks, I’m simply ignorant of effectively using any other program.

I can’t tell you what economic benefits you should be expecting each time you receive or spend money, these are the everyday business details that should be ironed out because these are the everyday details that will change your life.

"One CANNOT DO what the LAW PROHIBITS, one may ONLY DO what ACCOUNTING PERMITS."

I'm certain Scott Duncan has said that before, and that the #1 rule of the Universe is still intact. Scott fully endorses everything Chris has said about accounting, so if it’s hard you’re doing it wrong.