This is theCUBE, live from the Moscone Center in San Francisco. This is SiliconANGLE's continuous coverage of VMworld 2010. Now, Inside the CUBE. SiliconANGLE.tv's continuous coverage of VMworld 2010 here in theCUBE. We're broadcasting live on the scene at Moscone South in San Francisco, where VMworld is taking shape. We're in our third day, but really the second biggest day with my host, Dave Vellante. Dave, welcome back. Thank you, John. Yeah, day three. Day two for huge, right? Excellent, excellent to be here, John. And in theCUBE right now is the CEO of a hot startup growing like crazy, David Flynn from Fusion IO. Welcome to theCUBE. Great to have you here, David. Thanks, David. I understand you had the invite to the Apple announcement today. You sent WasNSTED. Our chief scientist, Steve Wasniak, had two VIP tickets. So he said, hey, you want to come with me? We get front row seats. Maybe a chance to sit and talk with jobs afterwards. I'm sorry, I have to do a TV interview thing. So, my business partner work is there instead of me. So everyone on Twitter want to know if the Was was showing them it. No, we could have had backstage exclusive access to Apple, but we, doing theCUBE instead, thanks. The big thing right now, we just heard from some of the entrepreneurs out there is pick a market, focus, be disruptive. You're in that right now. Talk about what's going on in your world right now with Fusion IO.  Just give us a high level overview of that and where the cloud all fits in and VMware's relationship and all that. So there's a huge disruption going on in the data center today with the advent of a new type of memory that has 20 times the density of RAM and 100 times the density by the time you pack it on a module because it doesn't require power and doesn't give off a lot of heat. Of course, I'm talking about NAND flash and this is hugely disruptive because you have to say what would life be like if you didn't have constraints in the amount of capacity of memory and didn't have constraints in the amount of IO you have. So it's a really interesting market to be in. For the folks out there who don't understand all the nuances of storage, I mean, you're talking about high-end stuff, but they have cameras, like flash cards, right? That means they put it in, it works. That's right, it's the same technology, the same chips that go into smartphones and MP3 players and cameras. But what we're seeing now is that that's being deployed in the enterprise. There's two basic methodologies. One is to make it a faster disk and have it pretend to be a disk drive for a storage and the other, which is the route we have kind of pioneered, which was to make it look like a memory device. As a very high-density memory, it's extremely valuable. So we've been covering here at silkenangle.com.tv at the VMworld, the convergence, the storage, compute, networks all converging. Storage has changed. I mean, talk about specifically how you see the cloud and storage changing, in particular, the role of storage. I mean, it's one big computer.  How would you describe that to folks? Well, it's kind of like in the computer graphics industry. There was a day when you had to have a vertically integrated platform with vendor lock from like SGI, right? They could charge $100, even $200,000 for a single user workstation, right? That's the storage of today. With the advent of the graphics card, it allowed anybody to build out of commodity parts the stuff necessary. So what we're seeing is the storage industry being transformed like the graphics industry was and that the agent, the catalyst behind that is the scale out business model of cloud and the high density of flash, the commoditization of the performance layer that used to take so much of an investment. So talk a little bit about that. I mean, you mentioned the scale out. Now these companies like Twitter and Facebook and the so-called Web 2.0 guys, when they, they grow like crazy and they want essentially building blocks that they can use to scale out. Are you seeing that in your customers? That's right, and you've already listed some of our largest customers, right? With this technologies, those guys, instead of getting so many users on a server, they're able to get 10 times the throughput. So the benefit of having a very high density memory storage hybrid is that those databases get 10 times the throughput and their response times are significantly faster. So the scale out world is being transformed through this new type of memory. And now Wikibon has talked to a number of these customers and they have essentially said that they were, prior to solutions like yours, they were just throwing hardware at the problem and it didn't solve the problem, did it? Well, and the reason is because the servers were really just cheap ways to package spindles or package a quanta of RAM, right? But the CPUs largely went underutilized to the tune of maybe only 10% of the processor being used, the other 90% sitting idle. So many of these properties bought two socket motherboards and only put one CPU socket, one CPU and one socket left the other one empty because if you're not even getting the full utilization of one, why put in two CPUs? It's just cheaper to package your memory in a commodity server package or to package 15 high performance spindles in a commodity server package than to centralize all of that into a big storage array. That's the whole thought of scale out. What we do is we allow them to fit in the server enough capacity and performance of this IO memory that they can get full utilization of those processors. So we've been hearing all week, David and John about cloud scale and scale out. I mean, I've been following this market for years and solid state disk has been around for a long time. Forever, since the dawn of computing. And so we've now got this flash coming in from the consumer market, and so what else is different now? So what's different and the reason why this is relevant today is isn't because flash can make a faster disk drive. It, you know, it always could. You can make a faster disk drive, putting RAM with a battery in a disk drive package. What's interesting is that flash has 20 times the bit density per square inch of RAM. And because it doesn't require power, a hundred times the density on a module. So it's not flash as a faster disk drive that's made solid state all that important. It's the fact that flash is a higher density memory device that has really made for a big change in the air. So translation meaning it's really now cost effective. It's very cost effective. It costs less than RAM per bit and you can pack a hundred times the density on one module and get 800 gigs on one card up to five terabytes. And it's persistent. Now you're right. You could have created battery backups before but it's a lot cheaper to do it with flash. Yeah, and even if it were not persistent, even if it forgot the data just as a memory device it would be huge. But the added bonus of the fact that it remembers the data when the power's off is extremely powerful because now you don't have to wait for all that time for the data to load in. I mean some of these scale out properties like you were talking about have to stage a database and run traffic against it for several hours before it's ready to go live because they have to warm up all of the cash in the RAM with Fusion IO, IO memory holding the data sets. You can go live and it's instantly ready because the data has been persisted there. So what does that mean for an application developer to say developing cloud applications? So it's a totally different mentality because things that you thought were impossible to do are now possible. You have to ask yourself what would I do if I had a system with terabytes of memory and didn't have to wait for that to get restored after a power outage but it was holding it all the time. The fact that this is a hybrid memory slash storage device makes for some really interesting designs. You can start combing through massive amounts of data in exhaustive ways that would not have been feasible before. David, can you talk about some proof points around the applications? I mean honestly it's like having RAM and a PC back in the old days, it's all on demand there. What are you seeing from your business and that you're disrupting and some proof points around? There's new things. It's an interesting question because it spans such a large spectrum because we're talking about a fundamental new building block, right? So it impacts and will impact everything in the entire data center. But we can take out some for key examples. In the database world, like we were talking about, it typically means that a database server can do about 10 times the throughput for the same server. And those responses, the queries, are answered 30, 40% faster. So it means faster page loads, more throughput per server. So answers.com retrofitted their MySQL scale out database tier and saw nine times the throughput per server. What they chose to do was to shrink the database farm four to one. So they got a 75% consolidation and with that remaining one out of every four servers, they were still getting in total more than twice the throughput they had before. So they re-architected essentially their database platform. And one way to think of what we do is we sell server consolidation just like VMware, but our server, we do that on the data intensive end of the spectrum where it requires such a large data set or such fast access that it wouldn't all fit in RAM, it wouldn't all fit in spindles. Well, we cover a lot about data on SiliconANGLE and Dave, researchers with Wikibon. You know, I was talking about big data, Hadoops of the worlds, but there's little data. We've been teasing out this notion of little data. Low latency, fast response times, edge devices. With virtualization, little data becomes big data because you can pack as many workloads as you want. Exactly, you got fast big data. At that point because now you've jumbled all the IO together. So you're fast big data. That's right. That's the way to think about it. Fast big data and in combination with VMware, what it allows you to do is to further increase your consolidation ratios. Because what limits the number of virtual servers or virtual desktops you can fit on a single machine is the memory capacity required and the IO performance required. This fits both of those bills and allows you to completely remove those as constraints. So talk about what that would mean, just playing it forward.  I mean, I've never talked about VDI virtual desktops in the end user experience, but people have iPhones and iPads. So what is that experience going to be? I mean, spectrum is a problem for wireless and everyone wants faster everything now. So to explain that enablement, what would be some of the things you'd see? So what we're seeing is that flash is transforming your endpoint devices, right? So you're carrying around even more intelligent devices with more capabilities thanks to that very cheap capacity in the NAND flash and ever increasing processing performance. Where we play is in the back-end infrastructure, what it takes to support those, to run those services in the sky, this makes them much more cost-effective to scale out. So it would be safe to say that, you know, my iPhone will be more powerful, my iPad will be more powerful? Those will be more powerful and they will appear more, you know, infinitely powerful because they're going to have fast access to large arrays of servers outfitted with IO memory that lets them hold huge amounts. So you're like a little memory cache that sits on the edge of the cloud that serves up the edge device, right? Almost a way to think about it. Well, metaphorically, it sits in the cloud and it provides a new tier of memory. So it doesn't displace disk drives, you'll still use disk drives for the cheap capacity that it gives you, but for your active data sets, those will all be stored in IO memory and you'll still use RAM, but you won't have to put as much RAM per server because now it can access the flash-based IO memory. So it's a new type of server class memory really? It's a new type of server class memory. That is the exact way to put it. The fact that it happens to be non-volatile and that it happens to be accessed through the storage interfaces is really a convenience. Just like a RAM disk sets aside part of your memory to pretend to be a disk drive, this, actually it's our software stack called the virtual storage layer, takes IO memory and expresses it as if it were a storage device, but the way it's physically connected, the way it's communicated with is much more akin to how you communicate with memory. So John mentioned VDI before, can you share with us any metrics or again more proof points around VDI and what you're seeing? Yeah, we set up for the show here a demo where we have 512 VDI desktops being served from a single server and the amazing thing is that it's CPU bound, it's a 48 core server and we have in essence removed the bottlenecks of the amount of memory required and the amount of IO. So you can even, you should stop by the booth and see it. You can log in through an iPad and start interacting with any one of those desktops. They're going through a scripted procedure showing users very actively using the desktops. So we've talked about it, but I wonder if you could summarize sort of the difference between the Fusion IO approach very close to the CPU versus taking SSD and putting it into a disk controller based subsystem. That's right. Two general schools of thought, one is to have it pretend to be a disk drive and sit inside of the disk infrastructure, which seems like an easy target for very quick deployment. That would be kind of like having flash chips. You know how you carry a USB thumb drive? Sure. Well see, flash already displaced one form of magnetic media, the floppy drive. Notice it didn't replace the floppy drive by looking like a floppy disk and going in all those floppy disk readers. There was actually a company that did that and they didn't last very long because the USB port was just way too convenient to get more capabilities. Well, we thought the same thing. Flash is a memory device and should be integrated into systems as a memory device to be able to truly exploit the additional capabilities. Because the last thing you want to do with it's more expensive than disk drives. So you don't want to handicap its potential benefit. So we said we should be focusing on how to optimize to extract the most benefit from the flash, not optimize to have it pretend to be like the old school stuff. Right. Can you talk a little bit about how you could potentially share that resource? Is that something that's on the horizon? Well, you know, the thing is is all storage starts local and gets shared out over iSCSI or fiber channel through some sort of a director or service and you can take IO memory and serve it out iSCSI or put Microsoft or open source on it and have it out of filer. So anything that can serve storage over a network can serve IO memory virtual storage out over a network as well. So we're demonstrating iSCSI based targets, et cetera downstairs. Now it's best used locally because of the very high performance. We have cards that have the performance of 16 FC four ports. So just one card and it gets very expensive to try to extract that much. So you'll see a tendency and it's very in line with cloud scale out to have the storage local and have it used locally even if you have a sharing layer of software. For example, Datacore, one of our partners is here showing how with their software they can create distributed shared sand-like storage from servers that have IO memory under VMware ESS. Yeah, we had George Tashara on the show on Monday, I think, yeah, it was good. John, I wonder if we could talk a little bit about David's business, about Fusion IO, the company. Yeah, I mean, what's going on with the status, what's the momentum you have and revenues? As, pause, I think. You bit? As you might expect, when you're introducing a new kind of building block that's this radically different the question becomes, well, how do you drive adoption and make sure that there's traction with it? And I'm happy to say that we have OEM wins with all three of the major server vendors. IBM sells our product under the name High IOPS, PCI Express. It's actually designed into their web sphere appliance, their web server appliance, and designed into their info sphere appliance, their database appliance, already built in. And HP also has OEM the product. Again, sales it as if it were their own. And it's called the IO accelerator. And that's across their server line. And most recently, just a few weeks ago, we announced an OEM relationship with Dell, who is actually sharing our branding on the product. So it's a Fusion IO branded product, but it's a full OEM relationship with Dell. Dell also happens to be an investor in the company from our seed round investor. So you're going to run the table on the server vendors? I mean, Dave and I were very excited that you were coming on, by the way, because we think your company's really hot in terms of like those huge success. And IO is a problem, right? We all want the faster edge device. We figured that we had better work well with the server vendors, because what we're selling actually ends up being server consolidation, right? And just like VMware had some of that constructive conflict with, what does it mean to be consolidating servers? We have that same thing. So we felt it was very important that our products were sold by the server vendors and allowed them to make a business. It gives them more performance. I mean, they can still serve their customers and deliver better value. And you know, the amazing thing is, is one might, at first blush, say you're going to consolidate servers. That decreases the server spend. But in actuality, when you lower the cost per unit of useful computing, you make it more cost effective for problems that weren't before. And now you can take business models to market that wouldn't have been viable. So it actually expands the overall IT system. This is something that David Floyer from WikimHunt has talked about a lot, that compute and storage resources. It's an elastic market, right? It's very elastic. Lower the price, people will buy more. They'll push applications harder. So we may talk about consolidation, just like VMware, but what it really ultimately means is expanding the overall market. So you guys are obviously growing very quickly. Can you talk about headcount, revenues? I mean, or even just give us some general guidance. You know, the company is doing extremely well. Was is there. Everyone wants to know about Was. Steve Wasniak joined the company now going on two years and is extremely active with the company. We're very pleased to have him. He's, aside from being a celebrity personality, I mean, dancing with the stars. I don't know how he did that. Yeah, but actually that happened just as he was joining up. You know, he accepted. We thought we'd go out on a lark and ask him not just to, you know, be an advisor to the company, but maybe actually take a paycheck and be an employee and come in on a regular basis and be part of the executive team. And he accepted because he was so excited. Solid state has always been, you know, special place in his heart. But then he said, but I'm going to be unavailable for the next three months because I'm going to be sequestered down in Southern California for this thing called dancing with the stars. It's like, it worked out really well because now, you know, even people who don't recognize him for being the inventor of the Apple computer, they recognize him for being that guy on dancing with the stars. Good, so uptake is strong. Yes, it's one of those up to the right charts. It sounds like what you guys. The impact that it has on business is incredible. We have some customers who are using us under autonomy and Microsoft's fast unstructured text search. That's, you know, a growing area is corporate kind of search discovery.  They went from minute level response times to comb through the inventory of every last, you know, email, what have you, down to fractions of a second in the response time. So it can really change the business and the services that they provide. So we're seeing a very rapid uptake. So the reason I think, this is my personal opinion that companies like Fusion IO are so interesting is because not only are you attacking the efficiency play, consolidation, right? It's a big theme, VMware, big theme. But more importantly, and this is true, I think for VMware as well, helping IT become a value producer, right? Whether it's a revenue generator or a new business enabler. And from your standpoint, it's enabling orders of magnitude greater application performance potentially. That's a good way to look at it. And we kind of segment it too. There's folks who want to use our product as a way to reduce cost and improve efficiency. The more forward looking guys are actually the ones who look at the creative ways of, you know, now that this possible, now that this is possible and cost effective, what kinds of things can I do that I couldn't before? And it means thinking outside the box. Just more tactically, what worries you as a CEO? What keeps you up at night? My biggest worries nowadays are around supply chain and building stuff fast enough. It's a problem that we always said, hey, that'd be great to have. Well, it's still just a problem. What do you say, just a final question to wrap it up? It is advice to other entrepreneurs. I mean, you've built a great growing business, great wins. What do you tell other entrepreneurs out there? Boy, run with your dream. Go through, analyze it well, make sure you're targeting a good market and just trust your gut on stuff and be a little bit of a non-conformist. I think that's what's really played well with us. As we said, look, everybody else is trying to conform to those same drive bays and storage controllers. And we said, that all needs to be rethought. So being ambitious enough to take on the daunting task. Okay, David Flynn, the CEO of Fusion IO, hot startup, exclusive coverage of VMworld 2010 Live, SiliconANGLE.com. Thanks so much, we're here in theCUBE. Feel free to mingle with the bloggers, and I'm sure they have a lot of questions. App developers really interested probably in all this. So thanks so much, Dave, great. Great to have you on, David, appreciate it. We'll be right back. Thank you. Taking a break, we're going to have an analyst come on from wikibon.org and Juniper Networks. Talk about networking and possibly some data and security. And computing.


QuickBooks Online 2023 Payroll Adjustment Get ready to start moving on up with QuickBooks Online 2023 Here we are in our Get Great Guitars practice file. We started up in a prior presentation using the 30-day free trial. Support Accounting Instruction by clicking the link below giving you a free month membership to all of the content on our website broken out by category further broken out by course. Each course then organized in a logical reasonable fashion making it much more easy to find what you need than can be done on a YouTube page. We also include added resources such as Excel practice problems, PDF files and more like QuickBooks backup files when applicable. So once again click the link below for a free month membership to our website and all the content on it. We also have open the free QuickBooks Online sample company. If you want these to open at the same time we suggest using the incognito window or another browser. You can open incognito window if using Google Chrome by selecting the three dots in the browser, incognito window, then search in your search engine for QuickBooks Online Test Drive. We're going to be using the sample company to compare and contrast the accounting view, the view that the Get Great Guitars file is in and the business view, the view the sample company is in. If you want to toggle back and forth between the two views you can do so by selecting the cog up top, the changing of the views down below. Opening up reports to put tabs to put reports in that is right clicking on the tab up top like we do every time to duplicate it, right clicking on that duplicated tab to duplicate it again, going to the tab in the middle so we can go to the reports at the bottom left and then open up one of our faves, the balance sheet, one of our favorite reports. And then note that if you're in the business view by the way the reports are located in the business overview section and then in the reports. So then I'm going to go to the tab to the left or the right that's on the right side and then go to the reports again on the left and then open up the profit and loss like we do every time, close up the hand boogie, scroll up, change the range from 010123 tab, 123123 tab, run it to refresh it, tab to the middle like we do every time, close the boogie and then change the range from 010123 tab, 123123 tab, run it to refresh it. That's the setup process that we do every time. Now last time we ran payroll and we're going to make a slight change to the payroll because we want to match our practice problem and match what's on our bank reconciliations and just to point out also the process that you might have to go through if changing payroll. So if I go to the first tab here and I hold control down and I go down to the payroll, we went to last time, we went to the overview and then we ran payroll which is in the run payroll on the right hand side. Now this processed in essence the payroll checks and the withholdings and the impacts on the financial statements from the transactions. Now we just want to point out that with payroll it can be a little bit more complex to make adjustments to payroll. We can't just go in and adjust the paychecks as easily because we have to be careful about all the withholdings and calculations related to the payroll taxes. Also, when trying to practice and learn payroll it can be difficult with a practice problem because the payroll works best when it's running real time. In other words, if you're working this practice problem at some point into the future, if it's too far into the future then you might have difficulty running the payroll because it works best in real time. The other issue with that, we do have payroll courses to kind of dive into this in more detail but the other problem with payroll is that payroll looks quite different from the first quarter to the fourth quarter because there's going to be caps that could be hit and those are most clear when you see the FUTA tax Federal Unemployment Tax Act which has a fairly low tax so the taxes with relation to that particular payroll tax will be a lot different from quarter one to quarter two to quarter three to quarter four in which case quarter four unless you have new employees you're not going to see much of that tax and the Social Security has a cap as well although it's a lot higher of a cap so if anybody's going to hit it they wouldn't hit it until quarter three or quarter four or something like that but you don't get to see those changes if you only process one quarter in other words, if you're trying to process or see what's going on with your 941s when you process them on a quarterly basis the typical thing is to say, okay well it's quarter two I'm going to compare what happened to quarter one to quarter two but things can be a little bit different because of these caps that people can hit on it and so that's something that we got to you know you got to just kind of be aware of and it's a difficulty to run the payroll problems now also what was impacted on the financial statements are multiple accounts here so we've got of course the liabilities that were impacted you'll recall for the withholdings for our withholdings and the employee withholdings we've got then on the income statement we've got the wages and the tax accounts that were impacted and we have a whole bunch of other payroll reports those are going to help us to report the payroll tax stubs to the employees on a year to date basis as well as a paycheck by paycheck basis and do the 941s to 940s to W2s to W3s therefore it's not as easy for us to just make a change in other words if I'm saying there's a check that is incorrect normally I can go okay there's a balance sheet here and I'm going to go into the cash and I can say okay this check maybe it's wrong for whatever reason it doesn't match what actually was deposited into the bank account or something like that when we do the bank reconciliation well I can't just go in here and change the amount of the check clearly it's going to cause an issue and even with the dates we want to kind of be careful with that because if I the reporting if I don't do the payroll within the QuickBooks system then the reports will not match and your W2s won't match and your calculations for the payroll taxes and all that kind of stuff will get all messed up so that's why the adage for payroll is typically do it first the first time and measure twice cut once as opposed to tinkering until you get it right some things are great for tinkering until you get it right some things are better off to get it right the first time measure twice cut once payroll better off to get it the first time if you do make an error then typically you need to void the check as opposed to deleting it because usually in practice we want to make sure that we have a paper trail of the data because employees are the most likely person to sue us unfortunately as well and it's most likely we're going to run into problems that we want to see a paper trail with so I want to be as transparent as possible with everything that we're putting into the system now in our practice problem so you usually have to void it and then you'd have to process the payroll again so that the system can process the payroll check properly and do all the reporting properly but in our practice problem we made an error in the recording of one of the taxes so we're going to get out to our practice problem over here to this paycheck that's going to be on our bank reconciliation so we're going to do something that I don't recommend doing in practice but we're going to do in the practice problem to make the bank reconciliation correct and the error was in the calculation of Social Security and Medicare so just to note the issues so you can see how these kind of problems happen with payroll taxes and how they can get kind of complex all of a sudden we had an error in the calculation of I think the Social Security tax so if you got an error in the Social Security tax calculation what is that going to impact well if I go to the balance sheet the balance sheet got deleted here I'm going to go from 010123 to 123123 and run it then we're going to have we're going to have this liability that's going to be impacted here for the taxes but it's not only just going to be the employee portion but also the employer portion because there's a matching thing so if I got it wrong on the employee side it's likely that we got it wrong on both sides and then on the income statement there's going to be an impact on both the wages because the wages include the employee portion of the tax and on the taxes here which are payroll taxes because those are the taxes that we pay over and above so you can see just this little kind of miscalculation can get quite complex in the number of things that are going to be impacted also the other reports are going to be impacted the W-2 stub or the paycheck stubs are impacted and so on so to do that to just make our bank reconciliation correct and tie out to our practice problem numbers I'm going to make another transaction just directly into the check register which you wouldn't do in practice but we will do in the practice problem so we're going to go down to the accounting on the left hand side and then I'm going to go into the chart of accounts and if you're in the other view by the way that would be under the bookkeeping and then the chart of accounts so that's where it is under the business view if you're looking at the business view I'm going to close up the handbook we're going to go into the bank account I'm going to use the register to enter this so we'll register and I'm going to hit the drop down and what I'm going to do is I'm trying to adjust this check right here but I don't want to actually physically adjust the check I'm just going to add another one with the same check number so when I do the bank reconciliation and that part of the practice problem we can see what is going on again you wouldn't do this in practice to a payroll account because what will happen as you'll see is the payroll reports will no longer tie out to payroll if and we'll point that out I'll show you exactly why that's an issue here because our payroll accounts won't tie out to the reports and at the end of the at the end of the year you would like to have of course your reports that you're going to make your 940 once your 940 is your W2's your W3's your financial statements the amounts reported on the for expenses and any liabilities to tie out to tie out right and if they don't you would think there's an issue so in any case I'm going to hit another check just to show you that and we're going to say this is going to happen on 013122 I'm going to make the same check number as as 102 the pay is going to be Adam Hamilton who is an employee and then this is going to be to adjust payroll and this is going to be a payment of we're going to say $60 to make the adjustment and this is going to go into payroll liabilities payroll liabilities and that form so that's going to adjust it so we get back to where we need to be again you wouldn't do this in practice we're just doing it for the practice problem it will throw off our payroll reports which is an issue in practice it would be an issue so I'm going to say okay it has the same check number I'm going to say okay I'm just doing that so when I when I reconcile we can I can show you what's happening with the bank rec now the other issue was with a was with the payroll liabilities on the employer side which didn't have any impact on the checking account because we didn't write a check for our portion our portion of the liabilities so it's just basically a journal entry so for the other side I'm going to go back to the register and I'm going to I'm going to choose the register to pick a journal entry from and that's going to be the payroll liability account so I'm going to scroll down to the payroll liability here it is I'm going to go into that register and I'm going to increase it again but this time with just a journal entry because all we have is a journal entry here because it's not the checking account I'm going to go oh one three one two two I'll call it journal entry that's fine journal entry two and we're going to say the payee I won't put anything I'll say payroll payroll adjustment and this is going to be a decrease of sixty that's to match it and the other side is going to go to the payroll expense expense account or tax the taxes payroll tax there it is payroll expenses there it is the taxes alright there's the other side so that means that the liability account got hit by both the employee and employer portion this part is going to the expense account expense account side because cash hasn't been affected we haven't paid it yet alright let's save it close it and show you what's going on here I'm going to go back to the balance sheet and let's go back here to our balance sheet and let's run it and so now with the checking account if I go into the checking account I'm going to have this adjustment that we put in a check for 1012 no I put it in there as of 2022 sorry about that I got the wrong year now so I'm going to change the date up top to 2022 run it and then I'm going to change it from 22 to 23 so there it is I'm going to go back into it again see if I can get this can you get it right for crying out loud how many we're going to make this up to 23 we're going to make it to 23 save and close it again and so there it is so now we've got this adjustment down here with the two that we're going to say are basically one check that'll help us to do the bank reconciliation when we get to that part of the practice problem or course alright going back and then we also had an impact on the this one that should have two $60 amounts one being a journal entry and I think I did the same thing with the dates did I not let's take it back to 2022 I'm working in the past so yeah I got a date issue I'm going to change the date to 2023 where is your head wake up get get some coffee or something wasting my time you're wasting my time I'm sorry here we go there's the adjustment and then here's the adjustment for that one so that looks good and then go back and then tab to the right and I'm going to run this one we made an adjustment to the the taxes tab so the taxes tab so there we have it now even if you figure that that was correct in practice we wouldn't do that in practice typically because even if you felt like that was the right thing to do there was an error and you made a journal entry to fix it for that particular pay period it's going to cause all kind of problems if you actually make a journal entry to any of these accounts wages, taxes and the payroll liability accounts because then these accounts will no longer tie out to the payroll reports and the payroll reports are what are being used to create the 941s the 940 the W2s and the W3s so at the end of the year or at the end of the quarter when you try to tie out your forms to what's on the financial statement you'll have this difference and then you're going to have then you should figure it out right then you're going to be like okay there's an issue something is wrong you know what are we going to do with that issue so in other words if I was going to go to this tab duplicate it and then I go to my reports down below my reports are going to be down here and I go to my payroll reports closing up the boogie scrolling down to the payroll reports and what was the one we looked at the payroll detail report I think so let's look at the payroll detail report then now we've got this information and if I look at it at the total this is the total that we have thus far the gross pay you would think would be matching out to basically the income statement on the gross pay the amount that we paid we changed by that $60 $534.23 minus if I go back on over here to just look let's go to the income statement and look at the taxes now we've got that difference minus the $474.23 there's that $60 difference that's an issue even if I thought it was right here but because I posted something a journal entry not through the payroll it's not going to be reflected in the payroll reports and the payroll reports are the things that are going to be used to be creating the W2s the 941s to 940 and so on also the liability we would expect for payroll liability to be at this 7517.56 because we haven't yet paid the payroll liability so if I go back to the balance sheet and we look at the payroll liability actually that's not right that's the total payroll cost I'm looking for just the taxes the withholdings that we've made that we haven't yet so that would be 1614.23 that we withheld from the employees and then our taxes come out to the 534.23 so that means we should have a liability that we owe to the government at this point in time here that doesn't quite match minus this 2028.46 so we have a difference of 60 and 60 that 120 so again we made this adjustment for our practice problem so that we can do the bank reconciliation so that we can tie out to our bank wreck here and also I think it's a good just example of what not to do in practice why you would want to make a change by voiding the way to do it even if you think you're right you shouldn't be posting anything directly to these accounts because if you do then the payroll system isn't going to match your reports aren't going to match and then that's going to have an issue if you got an audit like that your payroll reports don't match at the end of the year you should be tying out your payroll reports your W-2s your 941s and everything to what's actually being reported from the financial statements hopefully they should tie out if you used QuickBooks correctly and everything was run through the QuickBooks system if you post things directly to a particular account then things won't tie out and you're exposing yourself to problems if there was an audit or something like that or to make changes at the end of the year which is the worst time to be making changes you'd like to do that as you go major twice cut once let's go into the reports you don't have to belabor the point you're the one that made the error you're talking like I made the error trial balance let's go into the trial balance and check our numbers this is where we stand at this point in time if your numbers match out that's great if not try to expand the date range let's change the date range from 010123 to 123123 okay now if your numbers match then great if not try to expand the date range and then drill down on any missing or differences and see if you can change them if they're not payroll items they're payroll items you might not have to avoid them and then enter it again or do our adjustment that we just did which you can change the date if that one is different and we'll do a transaction detail report at the end of entering the first month of data which helps us drill down on any differences


Okay, and if you couldn't figure out what's back the newbie you're in the right place because obviously you can't read All right, so we will try to keep this as upbeat and fun as possible. So first off who's got questions Anybody have questions at all any question right now answer a hundred percent with total honesty We're from this point. Yeah Yes, I could anyway next question You got a spot the correct Fed not the incorrect one Look at the socks Wrong socks that's section two of the lecture anything else Yeah Is that the screens? Okay, that's going That's it for hacking tools. I'll come up with something by the end. That's part of the closing thing places to go from here Okay, no one asked the million dollar question. Okay, well we'll get started Okay, so we'll start off with the boring stuff such as philosophy Here's to the biggest question that everyone will walk up and ask somebody. Are you a hacker and I find this to be one of the most absolutely humorous questions at all either to be asked or to ask yourself Mainly because if you're asking yourself, are you a hacker or declaring yourself a hacker?   You don't go things in a classic textbook approach if you did You wouldn't be a hacker Hackers have a tendency to First time you get you pick up a walkman. You see what kind of screws are holding together You don't necessarily look and see how cool how good it sounds you're more concerned with what kind of drive system It's using is it a direct gear is it using a flywheel is it running on a using a large rubber ring to drive it?  Do you piece it together if you bought one as a package in it?  Oh, maybe I am a hacker. Maybe I've you know, so that's kind of long lines. We're looking at So number bullet point three establish your code of conduct this also falls under philosophy Um Most people have an inherent scent sense of knowing when they're doing something wrong You know walking into the store punching out the clerk and walking out with the Constance cash register. This is wrong You know you put in a 25 cents on the gum ball machine and to drop out instead of one Is this is this wrong? No, you got something for free, you know, that's this is Yeah, so she bus This is the kind of thing that we're looking at with good and evil It becomes a little more of a gray market gray area with Computers, you know You decide to run a port scan on an IP. Is this wrong? Yes and no Have you done anything to this computer? No, have you intruded on the computer? No Have you actively broken into and obtained data off this computer?  I go to the windows and I push up on all your windows and see if they're locked I go to your car. I see if it's unlocked. I check the handles Maybe I'll even take a slim gym and see if I can pop that door open. Let's test your security You know, is this is this something you would find acceptable? Probably not. In fact, if you saw someone walking through and casing your house and checking the windows You might get a little mad and probably call the cops This is what happens in the event of something like a port scan so and this this mentality is something when I tell people to when you're getting started and Getting into this environment Come up with and and establish what you what you know to be right and wrong now This may or may not be based on laws or such but you have to look at the big picture You have to understand What you're doing you have to understand there is a consequence for every action you take whether you realize it or not Prime example a couple years ago there was the large denial of service attack on Yahoo, and there's been eBay and such other things The motivation behind it could be anything from someone wanting to gain fame to someone who got annoyed to someone who's trying to Win a bid. I don't know But when you're looking at this you have to understand that Every system connected in between you and whoever is being attacked is also suffering These are people Systems you may or may not have a problem with or people and you're affecting their lives And you're making their lives pretty much a living hell when you do this kind of childish behavior And that's kind of what it boils down to so Typically it's a good idea to to understand You know right wrong good evil They're real fine lines. They're a matter of perspective what you might consider to be perfectly accept acceptable the next guy to you might find to be criminal and Somewhere along these lines you kind of all have to meet and hook up and understand and Kind of have our own space to work with So that's part of the long the idea of what the philosophy of getting involved in this environment is so Okay, this brings us up to etiquette and A lot of breaches of etiquette I observe around these these meetings The first point manners and you don't have to prove anything Actually, that's good. So how many times how many people is this your first time at DEF CON? Whoa, oh, wow, that's pretty cool. All right Let's see So a lot of people okay? So since this is new for all of you Something that happens a lot of time with these and it the adults don't tend to do as much as the younger people But what you have is the first time someone shows up here and They've been in their environment if they've been online they do their things and they have their persona They feel the need to make an impression on somebody when they meet somebody or they see someone they've seen on TV or Red reviews by or whatnot want to impress them and usually the first thing happens is they try to impress them by doing this Some of the most stupidest stunts. You can imagine Here's a here's a prime example from last DEF CON Myself and about six other guys all goons or staff or whatnot for sitting around the bar here in the lobby and About 3 30 in the morning this guy comes walking up to us with a couple of his friends We immediately spotted there was gonna be some kind of trouble You look like Fred Durst from one biscuit get the backwards hat the whole thing walk it up and he comes up looks at us So what y'all hackers?  You're not gonna give out any information you'd be like that, huh? It's like Dude, it's four in the morning, man. You don't have a drink yet get a drink and He kept on and kept on he got more angry and he kept trying to do something he's with his friends and You know it went round and round for about 20 minutes till finally he got frustrated he wasn't getting a rise out of me and We we sat around laughing about this guy because it's you know, how do you walk man? I was just gonna keep going How do you come up and been friendly? We're all having a good time We're we're socializing catching up on what's happened in the last year and you know whatever and out of the blue This guy comes up trying to like make an impression It's like you know pick pick the biggest dog you can find and go up and kick it to show that how tough you were that you went up and kick the big dog and You know it didn't impress anybody and he kept doing this throughout the convention till finally at one point it got Physical with somebody and he was ejected. That's that go home.  You've seen zero knowledge net and stuff, but you're not sure how to approach him Typically don't walk up and interrupt the guy if they're having a conversation with somebody this happened last night myself My friend just a bill and Peter Shippley were having a we're trying to hammer out something that had happened earlier And these guys these two guys kept coming up talking to him at like four in the morning Want to walk up and talk him and touch him and hug him. He looked him said will you go away? Yeah, but but no go away. We're trying to have a talk here How do you approach me another time when we were sitting around just chit chatting or whatnot or just walking through the hallway and Bump into him and say, oh, hey, aren't you so and so? Hey, I caught your speech Or I saw you on TV read one of your books read a review, you know, it was pretty good And you know, hey, I got a question if you got time You put it at, you know, their convenience don't demand attention from people Because they may or may not be busy and if they're busy and you're demanding their time at that exact moment.   Yes It's a matter of fact.  That's real mature. Nice.  Well, I'm not gonna tell you not to do it Straight up if you feel that you're right go ahead and do it but there's gonna be consequences there will be backlash and Make sure ask yourself am I just you know throw in a temper tantrum?  You know if what some things that somebody says on IRC is that important to you? You need counseling because it's just IRC You know, I have seen more wars. I have seen more fights. I have seen more long-term battling going on over IRC And I don't get it. I Had I've been doing various forms of online chat for at least 15 years on various networks and servers and hooking up with people I I love the medium is a great way to get to know people you talk to people on a different level It's cerebral. You're talking brain-to-brain mouth doesn't enter into it And the dialogue you'll have with someone on IRC is far different than you're gonna have face-to-face with the person It's it's nice But on that same token take it for what it is. It is a conversation. It is interaction. It is not It's not important, you know, so So it's button on that subject So let's move on Wrong button again. There we go learning There's a Number one point there coding versus compiling. This is a big issue when people are first getting into this When you can you can you can use the the old Star Wars parable the good You know the the the force and the dark and the light side and you know Compiling is the dark side coding is the light There's a happy medium If you need a tool and you need it now There is no sense in like I say reinventing the wheel grab your tool use your tool if you need a port scanner now Download it. It's there's no point in rewriting things that have been Written a thousand times and available on any search engine you can find for a file. Obviously By that same token though, if you have been running port scanners I'll use port scanner kind of as as foo and barf pretty frequently if you need it If you have never written a port scanner and you're using them all the time You would do yourself a World of good try writing one Write it in pearl write it in in basic right and see right at whatever pick pick a language or pick a weird one You know pick something obnoxious off the walls right right in the port scanner and Python You know why not? Yeah, cool And and learn how it works understand what it's doing put your own features put your own tweaks make it your own personal tool that is exactly what you want because The goal is not to write the port scanner the goal is to learn the machine you're on to understand the machine Knowing how how the the code talks to itself understanding what is going on inside the machine at the time This is getting back to the essence of hacking Understanding how it works knowing what something is doing You know that's that's the idea when you're when you're simply just compiling other people's code You aren't learning a damn thing All you are is going to 7-eleven and buying a bag of chips eating the chips and throwing the bag down on the ground somewhere for Someone else to trip on that's that's what quick coding and script kidding is you Typically are not doing anything other than you know passing, you know, hey, I take this I throw this and it's there I didn't go get the water.   That's the script kitty channel So let's go along like I said know your code know your tools know yourself if if you Know how to write the code for the tools you're using You're ahead of the game and you're on your way to actually doing some true learning These things and that's it's pretty important for for getting respect from other people If you can write your own tools and have written your old tools and can show off that you've done this then people understand Hey, this this guy is actually doing something. He understands what he's doing and You're gonna find it's a lot more interesting and it's a lot more fun because how long do you want to keep? Downloading and running other people's programs. How long do you want to keep running other people's scripts? Or even more fun you download a script and you have no idea what the script does they told you what it does You don't really know because you can't read the code There was a neat little code. I used to pass around back years back called Burke op dot IRC and This was back when all the new people were coming in on the IRC around 93 94 and They are all man. How do I get off? I want to get off. I need ops on this channel.  Which ones do you want to wipe out?  The funnest funnest ones was you you send to it you a CTCP to it Folgers crystals And at that point it wipes out everything in their home directory their entire mail directory and anything Off the tree and replaces it with a file named Folgers underscore crystals and then it announced us to the entire channel You know, they don't know it yet, but we've secretly placed their home directory Folgers crystals Let's see if they notice But then again, I didn't write it. It was past to me so However, I did go through and make a few of my own changes and of course like I said before before I ran it I read it and I Went through and made sure that the code I was about to run wasn't about to do what to me What I'm about to do to somebody else.  The other side story was one day I get a little piece of email from one of the admins saying Hi, we because I'm on an edu at this time. I went. Hi.  It's not good So I apologize. It's where I wouldn't do it again.  We've done a lot of we've done the Some of the fictitious stuff here in the abstracts Okay Here's the big wake-up call for a lot of people Life is not television Life is not the movies This is not the movie hackers Okay, we don't run around with little heads up monocles. We don't rollerblade and you know, I Never been on a pair of rollerblades.  What's the point? So yeah, this is the real world I have ran into people and listened to them sit there and worshiping the the movie hackers going dude It's the greatest movie man.  Yes, we've all read Neuromancer Yes, it's a fine novel But God, yeah, I can't go on in that movie enough because it was just absolutely hilarious watching it A television show I liked it was short-lived was Level nine that used to be on it was on UPN. That actually wasn't too bad of a show I actually ended up talking with the producer last Def Con. He was here and walked up to me Which was kind of humorous because I'm working with the back doors gooning and all since God walks up goes Hi, can I take your picture? And I'm like why? He's like well, I'm doing a TV show and he gets me his card and he was legit and so chitchat And he was looking he was actually here at last Def Con Getting an idea of what one of these conventions is like for use in material on the show and see and what the people They were trying to do it as accurate as possible and after having watched the show It wasn't bad.  I gotta hit arrow keys. Here he comes and oh God I dodged it. Yeah. Oh, no, it's tap tap tap tap return Shit That's hacking it's you know when you get in the computer level, but you know so We'll point to good jobs perform background checks and They will check your background if it's any kind of a very any kind of a high-paying position anything happening in the building Job I was where I was gonna go on with a guy just this last spring They were doing the background check on me and it was pretty funny because he called me up and said shatter it failed I'm like Okay, so I ran him off List list of little nuisances and traffic everything including every traffic ticket every speeding ticket everything I'd ever done and he went back and He says he's and when I named off him off. He says, okay Let me go back and talk to him again, and then they had their conversation. He goes. Yeah, it was the public nuisance I usually wear that one like a badge big badge.   Do you go? Wow, that was great. You want a job?  Anyway, so yeah It don't happen and so let's get on there point for a white hat black hat Hackers don't wear hats. Okay. Yeah, everyone of my know do not wear hats if they are My phone If they're gonna wear a hat usually it's up along these lines. I like this one thing I'm personal my propeller.   Oh, look at that windows. That's why he's got his shares wide open I'm gonna nail him and guess what as soon as you touch those shares You just intruded on that computer if you went across state lines. It's now a federal matter if you went into another country It's now an international incident So that's about the long link the time it takes and quite honestly With the amount of people I know on both sides of the fence the people in this computer security field and the people who I Know through various channels that are on the other side of the fence They there's a lot of overlap.  It's goes back to some of the ethics the Etiquette and your philosophy. It's it's what you consider to be right and wrong and that's the differences And that's the only place that matters. It is a Putting a good bad label on it is like saying a person is good or bad there's all shades of it in between and The absolute worst people in the world can suddenly be a nice guy and the nicest guys in the world can just snap and Do something pretty horrible and that's Computers is no different. It's not any kind of perfect, you know, everything written in stone And I think I pretty much already kind of cover the concept of responsibility for your actions And that's a big that's a big stickler with me It's one of the things that and manners are two things that way pretty heavy with me and a lot of people I know You know do what you're gonna do but be responsible about it Don't whine.  There's a lot of places to go learning Best places to go I find is a bookstore Pick up a book pick up a subject. You've never done before if you haven't worked with Pearl grab a grab an intro to Pearl book and You know start learning Pearl start slapping some code out and play with it pick something new That's that's gonna be your number one source for learning is gonna be a book there There is no There is absolutely no substitution for a good hard rock solid base knowledge in anything You can't you can't learn the wrong thing there is no wrong thing Anything you learn is going to open the door to something else and it's gonna be a foundation to learn something more and Keep moving and going My girlfriend was learning learning some age some HTML and some other stuff and somebody told her what why are you bothering? That's a waste of time. It's not a waste of time not at all She was picking up some some visual basic and someone was like, well, why are you doing that? She's just go learn C. It's like Why how what's what what is the point of going learning C if you don't have the foundation things and the foundation course It was teaching the basic concepts of computing was using visual basic as Their learning tool it was a tool you could use any language They chose that for whatever reason because that's what they did the knowledge you learn is not going to go to waste So anytime I hear people make references to you know, wait learning something. That's wrong or wasted knowledge It's and typically they're trying to just Keep you they don't want you to learn it typically because they probably don't know it and they haven't bothered to do it And if you go and learn something they don't know you're gonna be better than them and they're jealous so Learn what you can learn anything, but like I said my first recommendation is always read a book and there are thousands on the market to pick up, but Anyway, so finding like-minded people this is a You know a lot times you can do this in the bookstore when you're browsing books you find someone looking at the same subject Classes of college mail list listservs There's there's I don't remember what the last count of use in it is it's I'm wondering if it's reached the 500 500,000 market of groups of every possible subject You could imagine For people that are doing Anything and everything hacking anything. I mean Look at the look at that some of the obnoxious work that's gone into some of the Lego Mindstorm hacking. I mean Furby hacking. I mean that was that was a big one there for a while, but You know, that's one of the things. I mean if you see something new that comes out and it looks interesting Take check it out work on it see what you can do and use a good chance You're gonna find other people that are probably doing the same thing at some point So yeah Retaining a project. This is another way you can also find people and meet them Like I said like the Furby thing Pick a project pick something big and it doesn't necessarily matter what it is because the goal is not to to get from point A to point B. It's to to go to point A via the town next Next town over and learn all those maps before you come back to be Picking things up along the way finding new things anything you just haven't ever done before There's there's so many things out there besides Learning code learning TCP IP learning see learning pearl these that's those are that's a speck of dust on the wind of things You can learn and and hack on Any new there's I It's such it's so many it's hard to even pick one to focus on But what doesn't matter what you're working on the concept is that you are learning and that's typically what the hacking is all About if you're coming in if you want to get and if you're hacking and you're here at Def Con Because you want to learn how to break into a computer you wasted your money go home because you've missed You missed the boat boat took off and ain't coming back you your lost cause at that point So Waiting jail this is always a good one Waiting jail don't break the law It sounds pretty simple, but you'd be surprised how often people break the law Because they don't know the law and ignorance of the law does not exclude you from the law Before you're gonna do anything check it out look into it know what you're doing Make sure you're not doing something you shouldn't do If you want to practice breaking into computers your best bet is to build your own local Local network break into your own systems and then however you broke into that system go to that box Repair it and try to block that then go back to your other box and re-attack it and Work on your own system because what you do on your own computers is your business and you can do anything You please launch any nasty anything viruses email bombs all of it as long as you are not seeing it outside of your own local network You're fine and in fact, it's encouraged. That's a great way to learn that is an excellent way to get into some of the hard hacking because There's many steps to get up to that because before you have your own local area network. Well, you need a network So you're gonna have to get in to learn the networking. Well before you have your network you're gonna need machines and the best way to get machines build them and You don't necessarily need money Because you don't need a high-end machine necessarily to do some of these things This stuff worked great on 486's the stuff worked great on pinions. You don't need a 1.3 gig Athlon running 512 Megs of RAM to play around with Doss attacks It's you don't need it so you can find probably free machines parted out machines or anything else laying around from people You know and slap them together and build them. I mean The other day with me and my brother got bored and we got to talking about it And we wanted to play a bunch of some of the old old crunch classic DOS games That just absolutely don't run in Windows or they were they were They even even using various other things. They just they won't run So we started digging around through the drawers and we scrounged up one of our old motherboards We pulled out of the chip the only thing we actually end up buying for the system in the end Was he bought a 32 meg stick of RAM for $9 and everything else was parts. We had laying around we shoved it all in machine I found an old Ancient crusty Hard drive that was I think it's an 80 meg drive shove that in there because it's still spun and you know now We got a machine and so we're gonna run DOS on we could easily have put Linux BSD or anything else. No, it's not gonna be the fastest thing in the world But who cares it's it's it was nothing and Along the way if you're gonna if you've never done something like that, you should and Figure out what's going on and your your best your best thing it can possibly happen is it doesn't work Because if it doesn't work now you got to find out why and the why it goes back to what? What we're trying to do here is is the why it's going on the how not the fact that it's doing it Not the fact I push this button and you know push that button that happened over there. I need I'm done Now why did it do it when you push the button?  I don't advocate drinking much. I Encourage drinking a lot because It's hurts anyway, so fun stuff at Defcon Lectures are always are a great great source of killing time during the day until the party start in the evening and I Always hear things on news sources in other places people saying that you know that you know Defcon's a farce I think I think Microsoft I heard yesterday once again this once again denounced Defcon As being fake phony and whatever I look around the room. That's don't look too fake to me unless you're all holograms We only got those figured out yet, so you must be real which means we're here Which means whatever we're here.  It's running, you know, whatever Actually, typically what I was doing was doing a lot of dialing into my old job with this from the road and in their infinite wisdom decided to go from a standard login system to a To using a Windows networking Remote login systems and they completely bypassed the intermediary server which used a complete separate login and password And that was to make it easier which I laughed myself silly because well, they were simply using everyone's local in-office machine login username password and That's if you even bothered putting one on You know, it's just your desktop machine. We password for it's a work box So next thing you know is of course someone may want to change your password They're gonna issue a new password and of course they they you know email it out in their infinite wisdom got rid of the wonderful send mail box that we had running that was running a Sun system and threw that out because the company They only use exchange server because damn it. It's better We had a virus a week. I don't know actually we had a virus about every two to three days They were getting hit with yet another VBS script virus. I Hate using that term for the VBS because all they are is a glorified script But you know, let's just say of course it would go through hack hack and take over everyone's machine email bomb everyone and Mail could box up and take the email and send to whoever so if everyone's passing their passwords around an email like they did There we go compromised Of course, that wasn't the only compromise there. They The Unix systems I think were set up by people who were MCSE trained Which means they don't understand the concept of groups And so the only way I got the entire system work on the full cluster was everyone used the same login Why not and even better when they would write various pearl scripts to handle various other jobs and such Wow We'll just in the code Telnet and this there's the user in the password Good the script runs and they ran for three years And so anytime they wanted to change the password for for everyone to use they had to go through and change every script some of the program some of the compiled code because They put the user login and password right into the code And of course all the source was sitting there Yeah And the set the third part is is this is pretty typical of a lot of companies and you know You see in the news that this company got hacked or these guys got dosed or these guys got defaced and you wonder wow How can this be?  Yeah, are you look are you talking home-based or corporate home base? Most of them boil down to the same idea that what they're doing is There's to get down to two types of home systems you either have one that by default blocks certain port By default blocks every port. I like those ones. Those are nice Verse or you have the flip side where they automatically have every port open you decide what to block for most people in the home Automatically blocking everything and then asking you if you want it open is a little better Typically what I'll throw on systems. I actually I got it on this one here. This is an old one that is was bought out by Semantic bought these guys and it turned into The internet What are they called internet personal security or internet security product? No, it's that it's a semantic one Norton Norton personal security. I think there's I'm like I don't know Personal firewall. Okay. This was the predecessor to it called at guard and it's it was absorbed by them and Stripped down, but the nicest thing about this was it actually blocked ads and you never I don't see ads on webpages But it had a firewall here and you can see it automatically by default. This was a default one here blocking back orifice and net bus I'm sure had it had they stuck around or stayed as as they were they would have probably run sub seven some of the other ones And blocked them, but this one here by default blocks all ports and then ask you what you want to open and it's pretty friendly It was decent Easiest thing is experiment with them see what you like and what works for you Louder, I got battery Read anything you've never you've never read that's huh. Oh Yeah, you want to know what what books I recommend?  IRC IRC's IRC man. That's anarchy It's it's it's it's just goes Yeah, it also depends on which network you're on I kind of backed out of most of it Yeah, I got the first three words Yeah, what you have to do it ladies asking is the legalities of Say you're attacking your friend who's somewhere else Depends on the type of attack and you have to make sure that you're not violating use agreements to your ISP your ISP that you're providing or Whatever usually is the first one that's going to say anything about it And if they allow it then everyone in between it doesn't matter depends on the type of attack you're doing If you're straight up dossing you're going to be dossing everybody in between your two boxes And even packet floods that can be going on to it depends on the type of attack If it's one if it's a if it's a high bandwidth connection just hammering Everyone along the lines if you're using a smurf based distributed attack where many are sending to the one That will still end up hurting the ISP it depends on on how far up the chain it is So But if you're straight up trying to just do a penetration attack you're probably going to be okay as long as it's consensual But check with the ISP and see what they what they straight up say do and don't do But anything that's going to going to affect any system along the chain. That's typically illegal That's the easiest way to think about it and along the same way ethically as well Make sure that you know, you're not bugging anybody else in your exploration Yeah, not if unless you have it set inbound outbound I'd say no as well as along the lines of it depends on the game I mean if the game has a potential to exploit then yes, you could but Yeah, I'd pretty willing to bet unlikely because the game is only going to have access to certain resources and unless it's got the Ability the game itself has the ability to do things like modify your master boot record or whatnot You know, you should be all right Oh Okay, I'm old to me a cracker is the guy who's who's busting open software That's how it's always been to me this other term of calling separating the difference between a hacker and a cracker as being You know what they're doing You know to me, that's like new fangirls thing. I'm a jig, but I Tend to look some depending on the cracker what they're doing I tend to lump them in with a script kitty, which is nine-tenths of all the crackers out there are script kitties They get on bug track. They look for the newest exploit on what server and then they exploit that server to deface and You know, is that impressive? No, not really. I don't find I don't find I find the face It's to be pretty boring pretty tedious and silly and unless it's really really well done New York Times that was that was great. That was funny. I sent the New York Times hack about three years ago You can find it. It's there still want that that was a I was hacking for girlies and They if you jump on a trish, and you can find it in the archive That was beautiful because they cleaned it out New York Times completely stripped it and a couple hours later It's defaced again It took them better part of a week to track down every little Place that they hid the cron jobs and the code and got in and really just just blew it open so that was that was actually pretty good versus going in and and Nailing it to an IIS server and the humorous thing is if you look at some if you go and look at attrition You can kind of start painting a picture of these defacements and you look at when they hit and you'll see some group Well, suddenly this day did 28 defacements and You go and look at the details of it Every defacement was on the same type of server using the same exploit the same time uploading the same page And what they did was they had a little script. They went and they went Look what I did. I didn't do shit They sat and they changed a few variables and said launch and it went out and started going through hitting system saying What are you? No, what are you? What are you that? Oh, I'm gonna exploit you. Who are you? Who are you? And that's all it is. They just it's kind of like it's pretty similar to running a It's like port scanning except their ports. They're hitting at multiple websites Looking to see what server they run and exploit it.  They're really dumb They use birth dates for passwords. They use their social security number. They they use their their maiden name They use pass they use test I Don't know who it was, but somebody at one point found out that the city cash manager of New York City for a city bank back in 1987 the main root login was user city password cash I Kid you not and they were that ridiculous.  Firewall is only going to be as good as the guy who who? wrote the port blocks And if you're if you're even if you're running a unique system If you've got windows machines on the backside of it and you're not blocking ports 137 through 139 barred from the outside world That is the biggest hole in the world and it's in every version of windows even the new ones Every one of them and if you've got 137 and 139 open you can you might as well Just bend over and spread them because anybody can come flying in with us with a shares exploit So that's that that's In fact air here's here's my tip. I tell everybody the two things you can do if you are running windows on your home computer to make yourself almost fairly Secure as your first line of defense is number one You know type it right now go into Let's see All right, let's go you want to go into Go in here All right delete this file Destroy it Devastate it kill it make it go away and as a set and if you want you can even go in and Remove the file associations to Both of there's two points to dot. There's one to dot VBS and one to something else If you delete that you will protect yourself and probably 99% of the email viruses floating around the network today That the part this is this is the windows scripting host and it has one purpose to run Visual basic scripts on your system and I'd say 99.9% of all people running windows do not run VBS scripts That's that simple yet the default for all windows installations is to incorporate this into windows The for anyone that knows Pearl and Unix systems This is the same equivalent as giving root access to Pearl programs running under any user Okay, you should be laughing at that point That is exactly what that program does you can tell it to wipe out C and then when you're wiping out C You can also tell it by the way hide the dialogue boxes and don't and make itself run completely silent That is how the I love you virus runs. That's how all these other ones are doing it They run through that thing there if you destroy that you will protect yourself and number two like I said before run any kind of personal firewall public or whatever and Block ports 137 and 139 from outside access on your system easiest ways if you're running a DSL or a dial-up Designate that land card or what or whatever or if you're not running a home network Then just block it because it's not needed and that will block you from the shares exploit which is you know wide open by default on Windows so between those two You're not a hundred percent at that point, but you're a whole lot better than you were two minutes before Yeah, I'm talking about the Windows networking sharing.  Yeah But you can go into anyone's system effectively and and by remote turn it on access their printers When we first were playing with this some guy argued, oh, you can't do that. So we dropped the Windows help file to his printer Every page made a believer out of them. Wait louder. Yeah Yeah Yeah There's quite a few of them if you want to pay you can use secure CRT, which is pretty slick There's also several public domain ones you can download if you go to like Google or something or even files calm or whatever Just look for just type it in Windows SSH client and you should get quite a few returns Yeah, yeah Yeah Probably start with you can always go to loft loft has got some of their stuff They done loft crack and whatnot loft cracks a nice one if you're admitting a box to run on your run against user user account passwords to Kind of do a quick quick quick hit to make sure they're not using stupid dictionary ones It's it's similar to running a dictionary one but loft crack. You can also run deep crack and and do a hard penetrate Just stuff like that numerous resources I Don't have one off hand. Like I said you throw in Google and just type in, you know hack Hacking tools and you'll probably get at least three or four hundred thousand returns Try to stick to ones that look that That have fairly good references on their site referencing back to say like, you know, not just saying hi We like CDC or hi.  There's actually hidden inside the actual exe file is a little keylogger that will once a day Send out a short little burst back to their system letting you know everything you've ever typed so Anyway, okay, it's one and someone else is about to come on deck. So I'm gonna wrap it up I'm going and I'm around if you want to know anything come up and ask me. I'm you know, I'm always around