Accounting Basics
What is accounting?
Recording and reporting financial information
What is a transaction?
Financial event affecting the business
What shows revenue and expenses?
Income Statement
What is an asset?
Something the business owns
What is a liability?
What the business owes
Who uses accounting information?
Managers, investors, creditors
Does every transaction affect accounts?
Yes
What shows cash movement?
Cash Flow Statement
Example of an asset?
Cash
Example of liability?
Accounts payable
What is a business?
Organization that sells goods/services
What are source documents?
Proof of transactions
Balance Sheet
What are receivables?
Money owed to the business
What is equity?
Owner's interest
What is the purpose of accounting?
Provide financial information
Example of a transaction?
Buying Office Supplies
What shows owner's equity changes?
Statement of owner's equity
What is inventory?
Goods for sale
What increases equity?
Revenue
What is GAAP?
Generally Accepted Accounting Priniciples
No
What is net income?
Revenue minus expenses
What is equipment?
Long-term assest
What decreases equity?
Expenses