Before we explore how to analyze transactions, we first need to understand what governs the way transactions are recorded. As you have learned, the accounting equation represents the idea that a company needs assets to operate, and there are two…
If you want to start your own business, you need to maintain detailed and accurate records of business performance in order for you, your investors, and your lenders, to make informed decisions about the future of your company. Financial statements…
Figure 3.1 Dry-Cleaning Organization. Small businesses need an organized approach to recording daily business activities. (credit: modification of “Dry cleaned clothes Unsplash” by “m0851”/Wikimedia Commons, CC0) Chapter Outline 3.1 Describe Principles, Assumptions, and Concepts of Accounting and Their Relationship to Financial Statements 3.2 Define…
Describe the Income Statement, Statement of Owner’s Equity, Balance Sheet, and Statement of Cash Flows, and How They Interrelate Define, Explain, and Provide Examples of Current and Noncurrent Assets, Current and Noncurrent Liabilities, Equity, Revenues, and Expenses Prepare an Income…
One of the key factors for success for those beginning the study of accounting is to understand how the elements of the financial statements relate to each of the financial statements. That is, once the transactions are categorized into the…
In addition to what you’ve already learned about assets and liabilities, and their potential categories, there are a couple of other points to understand about assets. Plus, given the importance of these concepts, it helps to have an additional review…
The study of accounting requires an understanding of precise and sometimes complicated terminology, purposes, principles, concepts, and organizational and legal structures. Typically, your introductory accounting courses will familiarize you with the overall accounting environment, and for those of you who…
Figure 2.1 Derek’s Venture. Technology can be a great tool for those who are far away from friends and family. Tablets are one way for those unfamiliar with technology to become comfortable using technology to connect with others. (credit: modification of “Lady…
Explain the Importance of Accounting and Distinguish between Financial and Managerial Accounting Identify Users of Accounting Information and How They Apply Information Describe Typical Accounting Activities and the Role Accountants Play in Identifying, Recording, and Reporting Financial Activities Explain Why…
There are often misunderstandings on what exactly accountants do or what attributes are necessary for a successful career in accounting. Often, people perceive accountants as “number-crunchers” or “bean counters” who sit behind a desk, working with numbers, and having little…