About This Chapter
Praxis Business Education: Accounting - Chapter Summary
Review all aspects of accounting through our user-friendly video lessons with quizzes. The lessons will help you understand the differences between debits and credits and how they are recorded. Learn how to decipher income statements and balance sheets. You can sharpen your understanding of the following essential elements of accounting:
- Accounting's importance, purpose and relationship to business
- GAAP: generally accepted accounting principles
- Accounting cycle
- Financial statements
- External audits of financial statements
- Balance sheet
- Income statement
- Statement of cash flows
- Fundamental principles of accounting
- Accounting equation
- Source documents used in accounting
- Chart of accounts and ledgers
- Debits and credits
- Recording business transactions
- Trial balance and journal entries in accounting
Make certain that you take advantage of the quiz at the end of each lesson. Then you can see if you need to spend more time on any individual topics.
Praxis Business Education: Accounting Objectives
The accounting and finance section of your test contains about 18 of the total 120 multiple-choice questions, which is approximately 15% of the exam. The accounting objectives addressed on the test include the following:
- Accounting cycle
- Accounting process
- Financial statements: interpretation and use
The lessons in this chapter can help you get ready for the accounting and finance section of the test. Make sure that you also pursue our chapters concerning personal and business finance, reviewing topics such as savings, investments, credit, risks, finances and financial institutions, to be completely prepared for the test.
1. What Is Accounting? - Purpose, Importance & Relationship to Business
Just as French is considered the language of love, accounting is considered the language of business. In this lesson, you will learn exactly what accounting is. You will also learn the purpose of accounting, why it is important, and how it relates to the business world.
2. What Is GAAP? - The Generally Accepted Accounting Principles
Rules and regulations are a part of life for everyone, including those in the accounting industry. In this lesson, you will learn about GAAP standards, what they mean to accounting, and who establishes them.
3. The Accounting Cycle: Definition, Steps & Examples
Accounting is essential to the proper and efficient functioning of a business. In fact, it is often referred to as the 'language of business.' In this lesson, you'll learn about the steps in the accounting cycle. A short quiz follows.
4. What Are Financial Statements? - Definition, Purpose & Importance
Financial statements are big players in the world of accounting. In this lesson, you will be introduced to each of the financial statements. You will also learn what their role is in the accounting industry, who they are important to and why they are important.
5. The Balance Sheet: Purpose, Components & Format
There are four financial reports that make up a group known as the financial statements. We will take a walk with one of those reports - the balance sheet - and learn what it is, what items are included on it and what its role in the group is.
6. What Is an Income Statement? - Purpose, Components & Format
There are four financial reports that are created during the accounting cycle. These four reports make up what is commonly known as the financial statements. In this lesson, we will focus our attention on the income statement. We will learn what the income statement is, what its role in the financial statements is, and why it is important in accounting.
7. The Statement of Cash Flows: Purpose, Format & Examples
There are four financial reports that are required in financial statements. In this lesson, you will learn about the fourth and final report - the statement of cash flows. You'll learn what the makeup of the statement is, its purpose, and why it is important to users of the financial statements.
8. Preparing the Basic Income Statement and Statement of Retained Earnings
Preparing financial statements can be tricky. In this lesson, we are going to talk about how to prepare the first two basic financial statements: the income statement and the statement of retained earnings.
9. External Audits of Financial Statements
Financial statements are one of the most heavily relied upon group of reports in the business world, and they must be accurate and reliable. In this lesson, you'll learn about financial statement audits, who performs them, and why they are important.
10. The Fundamental Principles of Accounting
Accounting is an art, but just as with any form of art, you need the right tools to make your masterpiece. For accounting, those tools are the seven major accounting principles. In this lesson, you will learn what those principles are and what they are used for.
11. The Accounting Equation: Definition & Components
There are a few basic building blocks that form the foundation of accounting. One of those is the accounting equation. In this lesson, you will learn what makes up the accounting equation, its purpose, and how it works.
12. Source Documents in Accounting: Definition and Purpose
Do you know what role source documents play in accounting? If not, don't worry; by the end of this lesson, you will. You will also learn the definition of source documents and see some common examples of source documents.
13. Using the Accounting Equation: Adding Revenues, Expenses & Dividends
Accounting is built on a solid foundation called the basic accounting equation. In this lesson, you're going to learn what happens when you add revenue, expenses, and dividends to the basic equation.
14. What Are Accounts? - Definition and Use to Categorize Transactions
Everything in this world is made up of parts. Accounting is no different. The numerous parts that exist in the accounting world are called accounts. In this lesson, you will learn what accounts are, how they are classified, and what they do.
15. Ledgers and Chart of Accounts: Definitions and Use
There are several key concepts that are important to learn when it comes to accounting. In this lesson, you will learn about the ledger and the chart of accounts.
16. Understanding Debits and Credits in Accounting
Debits and credits are major players in the accounting world. In this lesson, you will learn just what debits and credits are and why they are important to accounting.
17. Recording Business Transactions in Accounting
Recording a transaction is the first step in the accounting cycle. In this lesson, you will learn why transactions are recorded, where they are recorded, and how they are recorded.
18. Using the Accounting Equation: Analyzing Business Transactions
Transaction analysis can be a tricky task. In this lesson, you will learn what transaction analysis is, how to analyze a transaction, and how it is related to the accounting equation.
19. Journal Entries and Trial Balance in Accounting
There are several concepts that make up an accounting cycle. In this lesson, you will learn about two of those - journal entries and the trial balance.
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Other chapters within the Praxis Business Education - Content Knowledge: Practice and Study Guide course
- Praxis Test: General Info
- Praxis Business: Personal Finance
- Praxis Business: Business Finance
- Praxis Business: Foundations of Communication
- Praxis Business: Written & Oral Communication
- Praxis Business: Employment Communication & Career Research
- Praxis Business: Economic Allocation of Resources
- Praxis Business: Economic Systems & Market Structures
- Praxis Business: Role of the Government in Economics
- Praxis Business: Economic Indicators of Growth
- Praxis Business: Entrepreneurship
- Praxis Business: Information Technology Operations and Concepts
- Praxis Business: Technology Tools
- Praxis Business: Computer Applications
- Praxis Business: Programming & Design
- Praxis Business: Foundations of International Business
- Praxis Business: International Business Environment
- Praxis Business: Contract Law
- Praxis Business: Consumer & Computer Law
- Praxis Business: US Court System
- Praxis Business: Marketing
- Praxis Business: Management
- Praxis: Professional Business Education