Part of the The ABCs of Accounting Video Series
When it comes to finances, “approximately” is just not good enough. Accounting professionals are expected to understand all the ins and outs of money matters, applying the rules of accountancy with good sense and care.
With that in mind, this program starts with the basics, introducing the purpose of accounting, identifying the AICPA and FASB, explaining the concept of GAAP, and spelling out the differences between CPAs and CMAs.
After contrasting three types of business organizations, the program moves on to the actual process of recording and tracking transactions. Types of business transactions, charts of accounts, journalizing and posting transactions, the rules of debits and credits, the purpose of the trial balance, and four main types of financial statements are described. The accounting equation is also presented.
1. Language of Accounting Understanding the basics of accounting helps in all aspects of business. The four areas are collecting financial data of a business, recording, analyzing and then communicating it back to the business.
2. GAAP and FASB GAAP, the rulebook for accounting, lays out strict regulations for consistency. The FASB updates GAAP as needed. AICPA is a watchdog group for public accountants.
3. Two Types of Accountants The CPA, or Certified Public Accountant, does income taxes and offers financial advice. The CMA, or Certified Management Accountant, works for one business or not-for-profit company.
4. Three Types of Businesses Sole Proprietorships make up the most businesses in the United States. Partnerships are the second type. Corporations are larger and do more transactions, the heart of accounting.
The ABCs of Accounting: Introductions and Definitions (DVD)
Time: 15 Minutes