ACCOUNTING
The process of recording, summarizing, analyzing, and reporting financial transactions. It provides the quantitative truth upon which business decisions are made.
Core Disciplines
Financial Accounting
Reporting financial information to external parties (Investors, Creditors).
Managerial Accounting
Measurement and analysis for internal management decision-making.
Auditing
Independent examination of financial information to ensure accuracy.
Tax Accounting
Compliance with tax laws and strategic planning.
Double-Entry Bookkeeping
The foundation of modern accounting. Every financial transaction has equal and opposite effects in at least two different accounts.Debits must always equal Credits.
The Accounting Equation
Books Balanced
ASSETS
$10,000
=
LIABILITIES
EQUITY
$10,000
Total Assets (Resources)$10,000
Liabilities (Debt)$4,000
Equity (Ownership)$6,000
GAAP
Generally Accepted Accounting Principles
IFRS
International Financial Reporting Standards