26/08/2025
๐๐ก๐๐ญ ๐๐ฌ ๐๐๐๐จ๐ฎ๐ง๐ญ๐ข๐ง๐ ?
Accounting is the process of recording, summarizing, analyzing, and reporting financial transactions of a business. It helps stakeholders understand the financial health and performance of an organization.
๐
๐ฎ๐ง๐๐๐ฆ๐๐ง๐ญ๐๐ฅ ๐๐๐๐จ๐ฎ๐ง๐ญ๐ข๐ง๐ ๐๐จ๐ง๐๐๐ฉ๐ญ๐ฌ
These are the building blocks of accounting:
โ
๐๐๐๐ซ๐ฎ๐๐ฅ ๐๐ซ๐ข๐ง๐๐ข๐ฉ๐ฅ๐: Transactions are recorded when they occur, not when cash is exchanged.
โ
๐๐จ๐ง๐ฌ๐ข๐ฌ๐ญ๐๐ง๐๐ฒ ๐๐ซ๐ข๐ง๐๐ข๐ฉ๐ฅ๐: Use the same accounting methods over time.
โ
๐๐จ๐ข๐ง๐ ๐๐จ๐ง๐๐๐ซ๐ง ๐๐ซ๐ข๐ง๐๐ข๐ฉ๐ฅ๐: Assumes the business will continue operating.
โ
๐๐๐ญ๐๐ก๐ข๐ง๐ ๐๐ซ๐ข๐ง๐๐ข๐ฉ๐ฅ๐: Expenses are matched with related revenues in the same period.
โ
๐๐๐ฏ๐๐ง๐ฎ๐ ๐๐๐๐จ๐ ๐ง๐ข๐ญ๐ข๐จ๐ง ๐๐ซ๐ข๐ง๐๐ข๐ฉ๐ฅ๐: Revenue is recognized when earned, not when received.
๐๐ก๐ ๐๐๐ฌ๐ข๐ ๐๐๐๐จ๐ฎ๐ง๐ญ๐ข๐ง๐ ๐๐ช๐ฎ๐๐ญ๐ข๐จ๐ง
This equation is the foundation of double-entry bookkeeping:
๐๐ฌ๐ฌ๐๐ญ๐ฌ = ๐๐ข๐๐๐ข๐ฅ๐ข๐ญ๐ข๐๐ฌ + ๐๐ฐ๐ง๐๐ซโ๐ฌ ๐๐ช๐ฎ๐ข๐ญ๐ฒ
๐๐ฌ๐ฌ๐๐ญ๐ฌ: What the business owns (e.g., cash, inventory).
๐๐ข๐๐๐ข๐ฅ๐ข๐ญ๐ข๐๐ฌ: What the business owes (e.g., loans, accounts payable).
๐๐ฐ๐ง๐๐ซโ๐ฌ ๐๐ช๐ฎ๐ข๐ญ๐ฒ: The owner's claim after liabilities are subtracted from assets.
๐๐๐ฒ ๐
๐ข๐ง๐๐ง๐๐ข๐๐ฅ ๐๐ญ๐๐ญ๐๐ฆ๐๐ง๐ญ๐ฌ
โ๏ธ ๐๐ท๐ฌ๐ธ๐ถ๐ฎ ๐ข๐ฝ๐ช๐ฝ๐ฎ๐ถ๐ฎ๐ท๐ฝ: Shows revenue, expenses, and profit/loss over a period.
โ๏ธ ๐๐ช๐ต๐ช๐ท๐ฌ๐ฎ ๐ข๐ฑ๐ฎ๐ฎ๐ฝ: Snapshot of assets, liabilities, and equity at a specific date.
โ๏ธ ๐๐ช๐ผ๐ฑ ๐๐ต๐ธ๐ ๐ข๐ฝ๐ช๐ฝ๐ฎ๐ถ๐ฎ๐ท๐ฝ: Tracks cash inflows and outflows from operations, investing, and financing.
๐๐ฌ๐ฌ๐๐ง๐ญ๐ข๐๐ฅ ๐๐๐๐จ๐ฎ๐ง๐ญ๐ข๐ง๐ ๐๐๐ซ๐ฆ๐ฌ
๐๐๐ฏ๐๐ง๐ฎ๐: Income from sales or services.
๐๐ฑ๐ฉ๐๐ง๐ฌ๐๐ฌ: Costs incurred to generate revenue.
๐๐๐๐ข๐ญ๐ฌ ๐๐ง๐ ๐๐ซ๐๐๐ข๐ญ๐ฌ: The dual entries used in double-entry accounting.
๐๐จ๐ฎ๐ซ๐ง๐๐ฅ ๐๐ง๐ญ๐ซ๐ข๐๐ฌ: Initial recording of transactions.
๐๐๐๐ ๐๐ซ: Where journal entries are posted and categorized.
Accounting Knowledge Concepts
