Overview
Accounting is a vital discipline that helps individuals and businesses track their financial activities. By understanding the principles of accounting, one can make informed decisions based on financial data. The key components include financial statements, the double-entry system, and the principle...
Key Terms
Example: The balance sheet of XYZ Corp shows total assets of $500,000.
Example: The income statement for Q1 shows a net profit of $20,000.
Example: The cash flow statement indicates a positive cash flow of $15,000.
Example: When cash is received, it is recorded as a debit.
Example: When a loan is taken, it is recorded as a credit.
Example: Buying inventory with cash involves a debit to inventory and a credit to cash.