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Accounting: The language of business
Accounting turns business chaos into a sentence someone can check.
The accounting identity
Assets = Liabilities + Equity, always and everywhere. Every transaction posts twice and the identity must survive every post, which is the whole system’s elegance and its straightjacket.
A = L + EWho reads it and why
Managerial accounting serves internal decisions; financial accounting serves external readers on standardized rules. Same data, different contracts.
What this course teaches
Nine units: the accounting cycle, financial statements, accrual accounting, merchandising, assets, liabilities and equity, statement analysis, managerial accounting, and managerial decisions.
Flashcard
A = L + E
The accounting equation
The balance sheet balances because this identity holds after every transaction.
Check your understanding
Buying inventory with cash changes: