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What is Accounting?

At its most fundamental level, accounting is the system of tracking the income, expenses, assets, and debts of a business. When looked at with a trained eye, a business’s accounting records truly tell the story of the business. Using nothing but a business’s “books” (accounting records), you can learn practically anything about a business. You can learn simple things such as whether it’s growing or declining, healthy or in trouble. Or, if you look closely, you can see things such as potential threats to the business’s health that might not be apparent even to people within the company.

For understanding purpose, accounting can be broadly divided broken down into two major parts:
1. A discussion of the most important financial statements used in accounting: How to read each one, as well as what lessons you can draw from each.

2. A look at accounting using Generally Accepted Accounting Principles
(GAAP), including topics such as double-entry bookkeeping, debits and credits, and the cash vs. accrual methods. How to account for some of the more complicated types of transactions, such as depreciation expense, gains or losses on sales of property, inventory and cost of goods sold, and so on.

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By Dr. Joseph H Volker | 2018-12-04T12:29:33+00:00 December 4th, 2018|Accountancy, Accounting Basics|0 Comments