yoyoyo fail what up welcome back again to my classic series
accounting for beginners number 37 I remember that year that's the year I got
my CPA license a short three years ago anyways Who am I I am CPAs strength I'm
the strongest CPA in Florida I'm a licensed CPA in the state of Florida one
of the 500,000 CPAs in America it's half a million let's get this in anyway this
fourth of July weekend what am i doing I'm grinding grinding is fun told you I
will be here Monday Wednesday Friday new accounting videos I'm here here I'm
really excited I'm really excited about this one as I was drawing it out making
my presentation on the board I thought yeah this is really making sense this is
gonna really help this is going to help people like I know when I put this video
out this is gonna actually help people understand net income let's get started
30 second or 37 is net income I don't know yeah up here I think I don't even
know it's gonna be the best playlist in the world the best of County playlist in
the world if you want to go look there's a close to 40 videos now 37 if you're
watching this but if you're watching from the future you want to come back in
time there's gonna be about a thousand video boys this is cut this is my
mapping system if you don't know it you should learn it if you're having
problems with accounting the work DCA learned of a Carnot asset or expense
liability equity revenue this is net income and one of the problems that I
had when I started with accounting was the difference between gross and net a
couple different ways you could think about it is if you get your paycheck ten
dollars an hour forty to forty hours a week that's four hundred dollars
that's your gross amount I I think this is finally how it broke through in my
head how gross and net worked so I picture this is me this is my
my little net I got my net and that's kind of what I took home because I see
like gross everything and then and then my little net like it just like
everything goes through my leg little fishes or something like like the gross
is the fishes fishes and then my net is like what I what I'm taking home my
little boy little fishing bag that's what I'm taking home the net for like
net income net income I don't know anything but I do
gross is everything and that's what I'm taking home all right what I'm taking
home income by how much money I'm taking home what the net income
what net income is is revenue minus expenses its income revenues income
revenues like the gross or what's net income it's the net the
net when you take home of your income so it's is actually net income is the
summary of the income statement the income statement is revenue minus
expenses and that's this is where your net income is going to be derived from
very the basics the basics just bare-bones I think this is really going
to help to illustrate how net at how net income plays a part
and how net income is a is the final of the income statement and it's also
carried over to the balance sheet now it could be wrong I don't think I am though
net income is the only number when you talk your balance sheet income statement
it's the only number that's on both so I'd say I don't know why I waited till
36 number 37 to talking about net income when it's possibly one of the most
important numbers because it's I'm too dear to to in my opinion the most
important statement so on sum of two most important statements sorry
I'm not perfect and we all know that oh Jesus Christ Oh
Oh squats killed me yesterday I did 10 by 10 German knock your chain because I
am 20% German boy getting jacked oh you have account you have an accounting
accounting business you do bookkeeping
$2,000 for the whole year you have one client you start up new you find one
dude says I'll give you $2,000 to do bookkeeping you're like great so let's
do that we did that during the year we did the bookkeeping for $2,000 that's
our service it's our service revenue journal entry is going to be because
we're getting money we're gonna debit the cash credit the the bookkeeping
revenue Devin cash credit Reverend Hill so look here see here's the balance
sheet cash two thousand dollars the income statement two thousand dollars
because I remember down here is the income statement up here is the balance
sheet cash bookkeeping revenue this is this is the rep this is income book
you've read the income statement cash balance sheet so that's how you get
that's how we got the two thousands here the service revenue that's on the income
statement and $2,000 is now what you have on the balance sheet now we're
gonna have one more transaction that's all that happened because nothing
nothing else happened except you found one duty said I'll give you to 2k 2k
gisle you're like great and then you're like I got no place to make much UK
gisle x' and then you found somebody that said I'll bring you a place for
$1000 that sounded good to you too so you got your kind of Robin
I'm here to pay paul here and where's Mary tired come on now
you got your $2,000 and now that now you've been making your tripperz your
2000 trippers and the guys like yo I need $1,000 for the rent you're like
Danny said to think about even not answering your phone
it's about learning from the plug don't run off on the plug that's a stupid
that's a stupid song don't ever do that okay I forgot because so it's a plug oh
so you had a peck say the pan I don't like paying money I
don't like outgoing money that makes me just disheveled so you have your rent of
a thousand dollars going out what's the journal entry for that going to be
journal entry for that it's going to be what we got thousand dollars rent
expense that's gonna be your debit okay and that's also on the income statement
what's the credit what you're gonna have you're gonna have money going out for
expense to get money on outlets sad sad day so that's an asset cash but it's
going to be going out so it's going to be a credit all right so that's the
journal entry so on the income statement it's going to be an expenses a thousand
for the balance sheet it's going to be under a cash but it's leaving so it's
going to be negative a thousand so let's tally up let's tally up our number at
the end of the year we had two transactions for the year and those two
transactions made this occur in the income statement made this occur on the
balance sheet now we're going to do our year-end and get our net income to know
how much we're gonna pay for taxes in blah blah blah let's go to the income
statement first and get our net income income statement is revenue minus
expenses or revenue was two thousand our expenses was one thousand that leaves
our net income of $1,000 mm minus one thousand one thousand
dollars so that's our net income so we had the net income transfers over
to our balance sheet let's keep this out look at this net income this Nantou
thousand dollars simultaneously it transfers over to the balance sheet it's
like magic I guess it is magic it's magic transfers
over to look the balance sheet 1,000 now does that work for the balance sheet
let's see balance sheet is assets equal
liabilities plus equity we've gone over that for our assets we have a thousand
dollars cash because we we had two thousand dollars in our in our balance
sheet assets cash session we had two thousand spent 1000 2000 1000 1000 now
that has to equal a thousand dollars on our balance sheet from work assets cash
has to equal liabilities plus equity there are no liabilities plus equity
what's under equity the only thing we have under our equity is net income and
that so so it balance about the balance sheet balances that's the income
statement that's how it's done and that's net income you know definitely I
I am the underdog and I want to be here for for the people that you know your
whole life all you've been hearing is negative negative negative negative
negative you know you you've done nothing right
in your whole life well that's that's bullshit man I'm gonna tell you you can
turn it all around maybe you need some in you know some individual activities
to do because I used to always play team sports I was just never one of the
premier no one ever thought I was any good even though I worked my ass off and
I got to be one of the best people on any team I was on you know I still sit
the bench or just because the coach didn't like me individual sports
individual stuffs really the way to go for me and maybe for someone who's been
getting shit on your whole life but you're like dude I'm good I can do this
like getting a college degree you know that's just on you doesn't matter if
everyone hates you do the work you get the good
grades you get your degree my professional license my CPA license
well I took me I had to smooth the accounting the State Board over I had to
schmooze my employers over but to pass the actual test yes it's it's not a
there that's actual CPA test is just you versus the test and you know everyone
else can take your stupid everyone else can think whatever about you but you put
that working you pass also really with with my YouTube channel I'm just that's
why I'm so passionate and so loving about it because I realized that the
more time that I put in no matter what anybody else says this channel will be
successful this channel will grow so thank you I'm going to be back here
again this is Monday's video tomorrow is fourth of July stay blessed