Accounting

At its heart, accounting is simply a Habit. There are 3 reasons why we should develop this habit.

Which transactions should be recorded in our accounts? The money measurement concept helps us identify them.

Why do we calculate our profits on a yearly basis? Know the logic behind it.

The goal of accounting is simply to help us analyse two aspects of our business. What are these two aspects?

Financial Statements are the accounting tools which help us analyse the profitability and stability of a business.

Where exactly are the accounting records kept? Probably in some sort of a diary, right? And, what is this diary of business called?

Separating business transactions into the mentioned 4 categories is the foundation of accounting.

Assets and expenses both take money out of our pockets. But, what is the difference between the two?

Assets and expenses both result in Cash Outflow. So, what might be the similarity between liabilities and incomes?

There’s a fifth kind of transaction; relating only to Equity. Along with it, we’ll also take a look at the Business Entity Concept.