Scribd
Upload
2 views

Accounting Short Topics

Accounting involves recording, summarizing, and analyzing financial transactions to help businesses manage income and expenses while ensuring compliance with regulations. Key concepts include the accounting equation, double-entry bookkeeping, various types of accounting, and financial statements such as the income statement and balance sheet. Additionally, concepts like accrual vs. cash accounting, depreciation, and accounts receivable/payable are essential for understanding financial management.

Uploaded by

Mark Steven
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
2 views

Accounting Short Topics

Accounting involves recording, summarizing, and analyzing financial transactions to help businesses manage income and expenses while ensuring compliance with regulations. Key concepts include the accounting equation, double-entry bookkeeping, various types of accounting, and financial statements such as the income statement and balance sheet. Additionally, concepts like accrual vs. cash accounting, depreciation, and accounts receivable/payable are essential for understanding financial management.

Uploaded by

Mark Steven
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

Introduction to Accounting

Accounting is the process of recording, summarizing, and analyzing financial transactions. It helps

businesses track income, expenses, and ensure compliance with legal and tax regulations.

Types of Accounting

There are several types of accounting: financial accounting, managerial accounting, cost

accounting, and tax accounting. Each type serves a different purpose in managing financial data.

Accounting Equation

The basic accounting equation is:

Assets = Liabilities + Owner's Equity

This equation must always stay in balance and is the foundation of double-entry bookkeeping.

Double-Entry Bookkeeping

Double-entry bookkeeping means every transaction affects at least two accounts. For example,

purchasing inventory with cash reduces the cash account and increases the inventory account.

Chart of Accounts

A chart of accounts is a list of all accounts used by an organization. It includes assets, liabilities,

equity, revenues, and expenses. It helps in organizing financial data systematically.

Financial Statements

The main financial statements are:

- Income Statement (shows profit/loss)

- Balance Sheet (shows financial position)

- Cash Flow Statement (shows inflow/outflow of cash)

Accrual vs. Cash Accounting

Cash accounting records transactions when cash changes hands. Accrual accounting records

income and expenses when they are earned or incurred, regardless of cash movement.
Depreciation

Depreciation is the allocation of the cost of a tangible asset over its useful life. Common methods

include straight-line and declining balance depreciation.

Accounts Receivable & Payable

Accounts Receivable refers to money owed to the business by customers.

Accounts Payable is money the business owes to suppliers or creditors.

Trial Balance

A trial balance is a report that lists all ledger account balances at a specific point in time. It is used to

ensure that total debits equal total credits.

You might also like