Business and Accounting Basics

Everything in a business has its own account which falls under one of 5 types of accounts or 3 classes of accounts. The 5 types of accounts are assets, liabilities, income, capital and expenses, also known as ALICE accounts. Each account shows details of an item from the date it …

Expenses are the goods, services and charges that a business incurs as it functions. It has a debit balance in the ledger accounts when it increases and a credit balance when it decreases. The cost of expenses in relation to earned income determines whether the business makes a profit or …

The financial records of a company are important to many persons, businesses and institutions for several reasons. These users of accounting information have their own interests in the success of a business which is why accuracy is so important. Users of accounting information are divided into internal and external users. …

When we talk about the purpose of accounting, it is more than just giving a definition of accounting. We can define accounting as the process of identifying, measuring and communicating economic information to provide owners of business and others with useful information to help them assess performance and make informed …

Financial ratios are calculated to analyse the performance of a business using figures in the financial statements. When learning the principles of accounting, you should be aware of the figures presented in the Income Statement and Balance Sheet. You can use the results of financial ratios to make internal and …