English for accounting
Chapter 1 Accounting
What is Accounting? Bookkeeping Auditing Assets Liabilities Financial accounting Management Accounting Capital Income Statement Balance Sheet Accounting- involves in recording and summarizing an organizational transaction or business deals such as purchase and sales, and reporting in a form of financial statements. Bookkeeping- is the day-to day recording of transactions. Financial accounting- includes bookkeeping, and preparing financial statements for shareholders and creditors (people or organizations who have lent money to a company). Management accounting- involves the use of accounting data by managers, for making plans and decisions. Auditing - means examining a company’s system of control and the accuracy or exactness of its record. Accountant- a person who trained to prepare and maintain financial records. Assets- things of value owned by a business. An asset may be a physical property such as a building, or an object such as a stock certificate, or it may be a right, such as the right to use a patented process. Liabilities-amounts owed by a company to others. Current liabilities are those amounts due within one year or less and usually include account payable, accruals, loans due to be paid within a year, taxes due within a year, and so on. Long-term liabilities normally include the amounts of mortgages, bonds, and long-term loans that are due more than a year in the future. Capital - money invested in a business by its owner. (See equity) On the bottom or right side of a balance sheet, Capital also refers to buildings, machinery, and other fixed assets in a business. A capital investment is an investment in a fixed asset with a long-term use. Debit -an accounting on the left or top of a balance sheet with a positive value for assets and negative value for liabilities and equity. Credit - an accounting entry on the right or bottom of a balance sheet. It is an account entry with a negative value for assets and positive value for liabilities and equity. Balance Sheet -a statement of the financial position of a company at a single specific time (often at the close of business on the last day of the month, quarter, or year. It is a summary of company’s financial status including assets, liabilities and equity.
