What Are Some Tips for Learning Basic Accounting Principles?


Quick Answer

Tips for learning basic accounting principles involve understanding the basic fundamental equation, recording transactions, entering debits and credits properly, and preparing journal entries, notes Basic Accounting Help. Accounting is the process of identifying, measuring and communicating economic information to permit informed judgements and decisions, states Business News Daily.

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Full Answer

The basic fundamental equation states that assets are equal to the sum of liabilities and equity, mentions Basic Accounting Help. The specific formula varies for individuals and corporations. Assets represent ownership items of a company. Liabilities refer to debt, or what a company owes to its creditors. Equity is ownership and the difference between assets and liabilities. These basic concepts serve as a basis for accounting principles, and they translate to more advanced accounting concepts.

Another tip related to learning accounting involves understanding the bookkeeping system. Of the two types of bookkeeping systems, single- and double-entry, most businesses use double-entry, notes Basic Accounting Help. Debit amounts appear on the left side of the entry, whereas credit amounts appear on the right side. In all entries, it is important to remember that the total debits and credits are always equal. Viewing sample journal entries that contain combinations of balance sheet, income statement and equity account transactions helps in learning basic accounting principles..

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