Learn the core principles, definition, and purpose of accounting, including its role as the language of business, the fundamental accounting equation, and the distinction between financial and managerial accounting. What is Accounting? What is Accounting? At its most basic level, accounting is the process of recording financial transactions pertaining to a business. It involves summarizing, … Continue reading What is Accounting? An Introduction.
Accounting is a vital component of any business, providing financial information and insights necessary for informed decision-making. Our expert tips, advice, and resources provide you with a solid foundation of accounting knowledge, from basic principles to advanced concepts. Whether you’re an accounting professional or a small business owner, our comprehensive resources cover a wide range of accounting-related topics to help you succeed in your financial endeavors.
If you ever wondered what the whole idea of business accounting was all about (but were afraid to ask) now is the time to learn. Most accounting terminology is complicated and scares off those who are not trained in the field. Acronyms and jargon abound, just like in any field, but the basics are really … Continue reading Understanding Basic Business Accounting
Publicly traded companies are required by law to publish an annual report to their shareholders. Many companies publish quarterly reports as well. Though there is no government mandated format that an annual report should take or the exact information it should contain, custom has developed some standards, and some professional accounting organizations have required compliance … Continue reading Reading an Annual Report
If you’re an investor, and you are trying to make a determination about the financial health of a business, you would need to read the Financial Statements in order to correctly ascertain this condition. Each year, publicly traded companies are required to publish an annual report; in this report, there are at least three financial … Continue reading The Income Statement and Investor Information
Financial audits are intended to provide some assurance to the public that a company’s financial statements are presented fairly and accurately, in accordance with the established or stated criteria. The public may include the shareholders of the company, debtors such as bondholders, banks or other financial institutions and some government entities. In general, a financial … Continue reading Financial Audits – Basic Tests
Understanding accounting abuses.
Assets that a company owns, which are expected to last more than one year, are called Fixed Assets. These assets include such things as automobiles, computers, furniture, office buildings, and equipment. These fixed assets that a company owns have a set amount of useful life. This means that a fixed asset is not expected to … Continue reading Calculating Depreciation — Straight-Line and Accelerated
Businesses go through a series of financial transactions that occur on a continuous basis within an accounting period. This sequence of transactions is referred to as an operating cycle and it goes like this: At the beginning of the period, the entity has a certain amount of cash This cash is used to purchase supplies … Continue reading Accrual Accounting and Adjusting Entries
The last two steps in the accounting process are preparing a trial balance and then preparing the balance sheet and income statement. This information is provided in order to communicate the financial position of the entity to interested parties. TRIAL BALANCE A trial balance is a list and total of all the debit and credit … Continue reading Accounting Trial Balance Example and Financial Statement Preparation
When communicating financial information to readers of the information, standard formats for financial statements have been established. The two most widely used statements are the Balance Sheet and Income Statement. Here we will learn how the Income Statement and Balance Sheet relate. THE INCOME STATEMENT AND BALANCE SHEET Income Statement The income statement communicates the … Continue reading Accounting Relationship: Linking the Income Statement and Balance Sheet
Nobody is thrilled when they get their monthly bank statement. Whether the balance shown is negative, less than expected, or the account just needs to be reconciled, it’s a time almost everyone would like to avoid. Why? I think the greatest contributor to this attitude: we simply do not know enough about banking, reconciling, and account management to look … Continue reading Bank Accounts and Accounting: A General Overview
Accounting is a process-oriented task that follows a prescribed series of steps in order to keep track of, and record, the balances of the various accounts. When a business makes a transaction, the effect of that transaction is recorded in the accounting system. According to the fundamental accounting equation, each transaction will affect at least … Continue reading Record Keeping and the Accounting Process