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Accounting is the process of monitoring and recording financial activity. Individuals and businesses use the principles of accounting to assess their financial health and performance. Accounting also serves as a useful way for individuals and businesses to meet their tax obligations.
You are reading: Accounting term for balancing books
The history of accounting goes back to ancient times. in the modern world, it is more closely associated with the financial reports of companies. however, everyone can benefit from knowing the basics of accounting.
General accounting knowledge can be important for people earning income during tax season. The following guide explains definitions and key accounting terms.
how to use this guide to accounting terms
This is an alphabetical glossary of accounting terms. was developed for students and businessmen to become familiar with accounting vocabulary.
basic accounting for students
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Some students enter accounting programs with little technical knowledge, and that’s okay. This guide is an easy-to-use resource for building the vocabulary used by accounting professionals.
can also be used for:
- gauging interest in a possible accounting career before applying to programs
- familiarizing yourself with accounting basics before beginning your studies
- refreshing knowledge acquired in an accounting program
Consider reading these additional resources for accounting students:
accounting basics for business owners
Accounting is key to small business success. But not all small business owners can get formal financial training.
The terms and concepts in this guide were selected in part for their relevance to new entrepreneurs. Glossary entries cover essential business concepts. examples include terms such as “accounts payable”, “accounts receivable”, “cash flow”, “revenue”, and “equity”.
Consider reading these additional resources for business owners:
simple accounting definitions
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Our dictionary of accounting basics includes dozens of important terms. This guide includes accounting definitions, alternative uses of words, explanations of related terms, and the importance of particular words or concepts to the accounting profession as a whole.
We also explain relevant etymologies or histories of some words and include resources that further explore accounting terminology.
questions about accounting terms
what is a simple definition of accounting?
In its most basic sense, accounting describes the process of tracking the monetary transactions of a person or company. Accountants record and analyze these transactions to build an overall picture of your employer’s financial health.
what are the basic concepts of accounting?
Basic accounting concepts used in the business world cover income, expenses, assets, and liabilities. These items are tracked and recorded in documents including balance sheets, income statements, and cash flow statements.
what are some accounting concepts?
Introduction to Accounting frequently identifies assets, liabilities, and equity as the three fundamental concepts of the field. Assets describe a person’s or company’s holdings of financial value. Liabilities are unpaid debts and expenses. Capital describes the money that the entity has available.
what are the different types of counters?
Certified Public Accountants and Management Accountants are two of the most common specializations in the profession. Management accountants are also known as cost accountants. Forensic accountants and auditors are another important branch of the field.
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