Financial literacy helps managers make a sound decision that enables their firms to achieve their target and build long lasting success in growing. The financial literacy with this mentioned is accounting. Accounting ensures that understanding financial statements to interpret them and make sounding decisions. By definition, accounting is described as a process of methodically recording, measuring, and communicating information on any financially-related transactions.
Types of Accounting or branches of accounting
Accounting can be categorized as either financial accounting or managerial accounting. The difference between the two can be distinguished mostly by the audience /users meant to address. Financial accounting is mainly for external users, and while managerial accounting is for internal users. Both types of accounting involve recording and communicating financial information in accordance with accepted accounting principles.
The proficiency in accountancy is when you gain insight and interpret your financial information through tools such as a balance sheet. Therefore, before we get in-depth into accounting, there are few key terms one should acquaint themselves to navigate into the accounting world; In accounting, there are basics and terminologies you should accustom to communicate the right information.
Key Terminologies and Terms Associated with Accounting
- Generally Accepted Accounting Principles (GAAP) are a series of standards and procedures that accountants and anyone involved in tackling any accounting tasks must adhere to when preparing financial statements.
- Financial statements are reports that summarize the economic progress of businesses. These statements include a balance sheet, income statements, and cash flow statements.
- Assets, these are items that belong to you, and you are the owner of it that you either bought or acquired by any other mean that has an economic value. Assets are categorically associated with tangible things, but also intangible things are also assets.
- Liabilities can be defined as any financial debts or obligations that arise during the course of operations. Caution is, however, given that a substantial financial liability may end up ruining the company reputation by having a considerable dent in having the company bankrupt.
- Owner Equity. Usually, are the total amount of cash someone invests in an organization. Often Owner’s Equity is reported assets amounts minus the reported liability amounts
- Expenses are generally financial costs that are associated with operations of an accounting period
- Revenue is the whole or total amount received from sales of goods or services
Tip; Basic accounting equation is represented as; Assets=Liabilities + Owner’s Equity.
Accounting, therefore, involves a lot of tasks that not only consists of recording key financial inputs but also communicating information on the transactions. It’s a critically important tool for decision making and making accurate financial records on business firms. Completing introductory accounting assignments may be a challenge due to the terms and terminologies, and sometimes calculations one has to be well-versed to finish it; hence this is where we comes to the rescue because our experts are that someone that are right to do my accounting homework for me. We specialize in accounting assignments solutions, and we put in much effort to deliver impeccable results in writing your assignments.