What Are the Rules for Debits and Credits in Accounting?

There is no standard definition for the terms debits and credits. Historically, the word “debit” derives from the Latin word debere, which means “to owe.” In accounting, this has been shortened to “Dr.” Similarly, the word “credit” has its historical roots in the Latin word credere, meaning “to believe.” In accounting, this is often abbreviated as “Cr.” In article “business … Read more

What are the different branches of accounting?

There are three main Branches of Accounting, which include financial accounting, cost accounting, and management accounting. Other accounting branches are a result of commercial development and emerging needs of business reporting the world over. What are the different branches or types of accounting? Accounting, as we all know, is the backbone of every organization. There … Read more

The Accounting Equation – A brief explanation

This equation should be supported by the information on a company’s balance sheet. The Accounting Equation is the foundation of double-entry accounting because it displays that all assets are financed by borrowing money or paying with the money of the business’s shareholders. The basic accounting equation In the basic accounting equation, liabilities and equity equal the total … Read more

What Is Double Entry Bookkeeping? A Simple Guide

The double entry Bookkeeping system of accounting means that for every business transaction, amounts must be recorded in a minimum of two accounts. The double-entry system also requires that for all transactions, the amounts entered as debits must be equal to the amounts entered as credits. What is Double Entry Bookkeeping? Every transaction that affects assets, liabilities, capital, income or … Read more

Basic Accounting Terms – A Quick Guide

If you’re starting to think about pursuing a career in accounting, your first step is to familiarize yourself with some of the basic accounting terms, acronyms, and abbreviations in the field. It seems every industry has its own secret language. And knowing the lingo is an entry point into the inner circle—an indicator that you truly … Read more

What are the Objectives of Financial Accounting?

Financial accounting is the field of accounting concerned with the summary, analysis, and reporting of financial transactions related to a business. This involves the preparation of financial statements available for public use. Stockholders, suppliers, banks, employees, government agencies, business owners, and other stakeholders are examples of people interested in receiving such information for decision-making purposes. … Read more

Who are the Users of Accounting? Explained

Are you wondering Who are the Users of Accounting Information? we have got you covered. An accounting Information System (AIS) is a system that collects, stores, and processes accounting and financial data. This financial data is useful for users of accounting information systems for reporting the financial information to Owners/Shareholders, Managers, Prospective Investors, Creditors, Bankers, … Read more

What are the Generally Accepted Accounting Principles? (GAAP)

Generally accepted accounting principles, or GAAP, are standards that encompass the details, complexities, and legalities of business and corporate accounting. The Financial Accounting Standards Board (FASB) uses GAAP as the foundation for its comprehensive set of approved accounting methods and practices. Accounting principles The rules and guidelines that companies must follow when reporting financial data. … Read more