Tax & Accounting Center
Introduction to General Accounting
"Revenge of the math club" is how many independent business owners view the need for accounting. Unfortunately, this may result in the owner ignoring the entire process and using other tools to run his business.
Accounting is a Language of Numbers
The process of accounting seeks to reduce the activities of every business to a common measurement - the dollar. by doing this, it allows comparisons of such diverse activities as advertising, banking, and the buying of inventory to be expressed in such a way as to make the comparable. doing this will give you clues as to what has happened in your business, and, givien that things remain the same, what will happen in the future.
Financial Statements are the Products of Accounting
These statements are primarily developed to assist you in running your business. Expressed in a common format - dollars - it shows the results of every decision you have made in the past, so that you can make decisions about the future.
What is an Income Statement
The income statement is sometimes called the profit and loss statement or P&L. This product of accounting summarizes the results of operation for a given period of time.
What is the Balance Sheet
The second major product from the process of accounting is the balance sheet. This usually referred to as a snapshot of the financial position of the company at a point in time.
What is the Cash Flow Statement
the last statement is the cash flow statement, or source and applications of funds. This statement shows how the company took in cash and how it spent it.