However, certain terms and concepts pertain to more than one subject in this book. Therefore, you can understand the concepts I explain in each chapter regardless of whether it’s your first chapter or your last. I always assume that whatever chapter you’re reading is the first one you’ve tackled in the book. This book, like all For Dummies books, is written so that each chapter stands on its own. My purpose in writing this book is to breathe some life into the subject of financial accounting and make it more understandable. Added to the mix is the importance of gain-ing a working understanding of the standards set in place by authoritative accounting bodies.Īfter years spent in the classroom as both a professor and student, I realize that many accounting textbooks are, well, boring. Forgot about the math - that’s why you have a computer and a calculator! Financial accounting is less about adding and sub-tracting than using logic-based skills. You measure performance by seeing whether the company made or lost money during the accounting period.Ī lot of first-time accounting students tell me that they are afraid they won’t do well in their financial accounting class because they haven’t done well in math classes they’ve taken in the past. » To show how well the company performs over a period of time, which is referred to as an accounting period. » To report on the financial position of the company - what types of assets the company owns and what types of liabilities it owes. You also find out the purposes of the financial statements:
#Accounting for dummies pdf how to
This book is a step-by-step guide on how to prepare all three. There are three financial statements: the income statement, balance sheet, and statement of cash flows. Financial accounting serves the needs of external users by providing them with understandable, materially correct financial statements. Zeroing in on the external users of accounting information, this book is about financial accounting. External users include investors, creditors, banks, and regulatory agencies such as the Internal Revenue Service and the U.S. Securities and Exchange Commission. Accounting is known as the language of business because it communicates financial and economic facts about a business to all sorts of interested parties - both internal (employees of the company) and external (people not employed by the company in question).
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