Accounting Principles

Accounting measures the economic transactions in a company. It reports the information in a timely and accurate way for the business owner to make decisions for the company.

Accounting

Accounting

Accounting refers to the business function of recording economic activity.  Accounting includes the processing of information and a reporting role.   The accounting term encompasses a broad range of functions for every business.  It starts out with a system of gathering economic information, categorizing the material, inputting the data into an accounting program, and generating outputs for decision making.

The Definition of Fixed Assets

Any tangible item not consumed within one accounting cycle (typically a year) and providing long term utility is referred to as a Fixed Asset.  Traditional images include manufacturing equipment, tools, transportation vehicles, buildings and utility related systems (sewage systems, power grids, power plants and dams).  In accounting, these assets are recorded to the balance sheet as ‘Fixed Assets’. 

Accounting Principles

Accounting Principles

Simply stated, accounting is the measurement of economic activity.  Its primary principle is to report information to the user so that (s)he can make informed decisions.  The primary reporting format is in the form of dollars.  There are two important reports used by pretty much 99% of all business operations to determine the status of the business operation.  These are the income statement and the balance sheet.

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