Thomas is an entertainer for children’s parties. He runs the business and works the parties himself; he has no debts so the finances are simple. What is the minimum that needs to be documented in his accounting?

Question

Thomas is an entertainer for children’s parties. He runs the business and works the parties himself; he has no debts so the finances are simple. What is the minimum that needs to be documented in his accounting?

a: income, expenses, and taxes
b: assets, investments, and equity
c: income, investments, and taxes
d: equity, investments, assets

Answer 1

a: income, expenses, and taxes

This is the minimum that needs to be documented in Thomas's accounting in order to accurately assess the financial health of his business and ensure he is meeting his tax obligations. Tracking income and expenses will help him understand how much money is coming in and going out of the business, while documenting taxes will ensure he is properly reporting and paying any required taxes.