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Accounting is the process of recording, classifying, summarizing, and reporting financial transactions.
What is Accounting?
A statement showing account balances to ensure debits equal credits.
What is a Trial Balance?
Costs incurred to generate revenue.
What are Expenses?
Money owed to suppliers.
What is Accounts Payable?
Movement of cash into and out of a business.
What is Cash Flow?
Assets = Liabilities + Equity
What is the Accounting Equation?
Resources owned by a business with economic value.
What are Assets?
Allocation of a fixed asset's cost over its useful life.
What is Depreciation?
Money owed by customers.
What is Accounts Receivable?
Statement showing assets, liabilities, and equity.
What is a Balance Sheet?
Every transaction affects at least two accounts with equal debit and credit entries.
What is Double Entry Accounting?
Obligations or debts owed by a business.
What are Liabilities?
Allocation of the cost of intangible assets over time.
What is Amortization?
Current Assets − Current Liabilities.
What is Working Capital?
Goods held for sale or production.
What is Inventory?
The first recording of a financial transaction.
What is a Journal Entry?
Owner's residual interest after liabilities are deducted from assets.
What is Equity?
Recording revenue and expenses when earned or incurred, not when cash moves.
What is Accrual Accounting?
Comparing the cash book with the bank statement to identify differences.
What is Bank Reconciliation?
Statement showing revenue, expenses, and profit.
What is an Income Statement?
A book or record containing all business accounts.
What is a Ledger?
Income earned from normal business operations.
What is Revenue?
Recording transactions only when cash is received or paid.
What is Cash Accounting?
Independent examination of financial statements.
What is an Audit?
Attention to detail, analytical thinking, integrity, accuracy, and strong financial knowledge.
What Makes a Good Accountant?