About This Chapter
Key Accounting Concepts - Chapter Summary and Learning Objectives
Before beginning any accounting task, one must first understand the foundational concepts of accounting to better understand the methods and terminology associated with it. This informative chapter highlights all the key concepts of accounting while providing useful resources to help you retain the information. Lesson quizzes, a chapter exam, printable transcripts for video lessons and access to expert instructors combine to create an interactive learning experience. Some of the things you'll learn in this chapter include:
- Accounting's relevance and necessity
- The accounting cycle and GAAP (Generally Accepted Accounting Principles)
- Examples of accounting concepts, such as debits and credits, expenses, revenues and net profits and loss
- Types of business transactions and assets
|What is Accounting? - Purpose, Importance & Relationship to Business||Evaluate accounting's function and importance, including its role in business.|
|What is GAAP? - The Generally Accepted Accounting Principles||Dissect the rules and regulations governing accounting.|
|The Accounting Cycle: Definition, Steps & Examples||Analyze the steps in the accounting cycle.|
|Source Documents in Accounting: Definition and Purpose||Appraise the role of source documents in accounting and evaluate examples.|
|What is Double-Entry Accounting? - Basics & Examples||Consider the reasons this method is commonly used to maintain financial records.|
|Business Transaction: Definition, Types & Analysis||Illustrate types of business transactions and ways to analyze them.|
|What Are Accounts? - Definition and Use to Categorize Transactions||Classify different types of accounts and their functions.|
|Understanding Debits and Credits in Accounting||Explain the relevance of credits and debits in accounting.|
|Business Assets: Definition & Examples||Categorize various types of business assets and discover which ones are most common.|
|Accrued Expenses & Revenues: Definition & Examples||Differentiate between accrued revenue and expenses.|
|Direct & Indirect Expenses: Definition & Examples||Distinguish what classifies as an indirect or direct expense.|
|Operating Expenses: Definition, Formula & Examples||Calculate operating expenses using examples.|
|Net Loss: Definition & Formula||Experiment with the formula used to calculate net loss to determine how it can be detrimental to business owners.|
|Net Profit: Definition & Calculation||Connect the concept of net profit to everyday life and formulate how to measure it.|
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. 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.
5. What Is Double-Entry Accounting? - Basics & Examples
Double-entry accounting is the method used by professional accountants and bookkeepers to maintain business (and even personal) financial records. The basis of the double-entry system is the accounting equation.
6. Business Transaction: Definition, Types & Analysis
This lesson looks at business transactions and offers a definition for them. We'll also go over types of business transactions and look at some examples.
7. 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.
8. 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.
9. Business Assets: Definition & Examples
Learn what business assets are, and find out some of the most common assets that companies have on their balance sheets in this lesson. Also, learn about some of the different ways that these assets are categorized.
10. Accrued Expenses & Revenues: Definition & Examples
Accruals are a part of the accounting world for most businesses. In this lesson, you will learn about two important parts of the concept of accruals: accrued revenue and accrued expenses.
11. Direct & Indirect Expenses: Definition & Examples
Did you know that raw materials are a type of direct expense? In this lesson, we will define direct and indirect expenses and discuss examples of both kinds of expenses.
12. Operating Expenses: Definition, Formula & Examples
This lesson introduces the concept of operating expenses. It explains what operating expenses are and how they are calculated. Examples of operating expenses are included.
13. Net Loss: Definition & Formula
Business owners hope that each period, the money brought in is more than the money paid out. But that's not always the case. In this lesson, you'll learn the definition and formula for net loss, and why it can be bad news for business owners.
14. Net Profit: Definition & Calculation
In this lesson, you will learn about net profit. You will learn the definition of net profit, how it is calculated, and see an example of how it relates to everyday life.
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Other chapters within the Accounting 302: Advanced Accounting course
- Business Ownership Types
- Journals & Ledgers in Accounting
- Accounting Equations & Formulas
- Financial Statements, Balance Sheets & Income Statements
- Analyzing Financial Statements
- Financial Statement Ratios
- Accounting for Inventory
- Accounting for Depreciation
- Accounting for Compensation, Taxes & Liabilities
- Adjustments & Closing Entries
- Corporate Accounting
- Departmentalized Accounting
- Taxation for Corporations
- Business & Financial Forecasting
- Required Assignments for Accounting 302
- Studying for Accounting 302