Ch. 1 Types of Business and Financial Statements

Accounting IS NOT a math class.  Accounting IS a language class.  EVERYONE has learned the rules of the English language.  EVERYONE is ready to learn the rules of accounting or the language of business.

If you were going on a vacation to a country that spoke a different language, you would make sure you understood basic words to find the bathroom, get transportation, and order food.  In accounting, our basic words are assets, liabilities, owner’s equity, revenue, and expenses.  Understanding these basic words is the beginning to understanding the accounting language.

Financial statements are the way companies “keep score”. As we learn how the score is kept, we can then begin to learn how to analyze the financial statements to get better at “the game”. In our first week, we will learn how to prepare the four major financial statements (Income Statement, Statement of Stockholder’s Equity, Balance Sheet and Cash Flow Statement) and begin to understand business transactions.