Debits & Credits
Posted by Steven in balancesheet, Credits, Debits, income statement, Statement of Owner’s Equity
The essence of managerial expectations is found in what’s called basic accounting Arts – meaning that in reporting financial data, the accounting function should be Accurate, Relevant, Timely and Simple. The concept behind accounting , what makes it more than merely adding and subtracting, revolves around basic core consisting of debits and credits. This is an accounting system’s soul, and understanding it will help managers better handle their share of responsibility for the firm’s finances. In some ways the debits and credits are more complex in theory than in practice. Debits and credits form the basis of all accounting functions, including the company’s balance sheet. They are the two types of activity that can affect any financial account of any type- assets, liabilities, equity, income, or expenses.The balance sheet is one of the primary accounting statements for any company. Its ultimate goal is to keep all the assets in balance. An income statement is a summary of business revenue and express for a specific period of time. Statement of Owner’s Equity is a record of the value or percentage of ownership held by the individuals or firms with a stake in business. The primary function of all such statements is to help keep the company finances in balance.
