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What is Accounting? Significance, Purpose, and Need

Introduction to Accounting. | What is accounting?

Accounting is a useful way of recording and summarizing financial information. Businesses use accounting to keep their financial information organized which helps them in making sense of their financial data and also keeps them compliant with financial regulations.

Why do we need accounting? 

Some might think, that accounting is only a boring and unnecessary redundancy and that it exists only due to regulations and legal requirements. But the opposite is true. Accounting exists because it plays an extremely important role in running a business.

Why Study Accounting?

explanation of why an understanding of the principles of accounting is essential for everyone. Accounting knowledge isn't just important for business owners or business managers. 

Regardless of the vocation you choose, you will make important financial decisions that will impact the rest of your life. An understanding of the principles of accounting will help you take control of your personal financial position and help you make sound business decisions.

you know accounting is really a subject worth learning when I was a younger man and going to school I took an introductory accounting class and decided that maybe accounting was a really good major for me even though.

I didn't necessarily want to become an accountant you see I'm kind of a type-a personality I'm the kind of person that likes to be in charge likes to have responsibilities be accountable call the shots.

I saw myself as potentially in the future maybe owning my own business or or being the CEO of a major corporation and when I took that introductory accounting class

What does an accountant do and why is it so important?

What is accounting? And, why is it important? Accountants compile, analyze, and explain data that are ultimately used to make critical business decisions. So when the boardroom heats up, the accountant gets to work by asking the right people the right questions and delivering keen insight when it's needed most!

Accounting Basics Explained Through a Story

New to Accounting? In this video, I will introduce you to the world of accounting by telling you a story. This quick tutorial gives you an introduction to accounting and explains the concepts of income statement (Profit & Loss), balance sheet, and the accounting equation (Assets = Liabilities + Equity).

You will also learn through examples what assets, liabilities, and equity are. I will also introduce you to the concept of the T account. This is something that we will look into more detail in the Debits & Credits video. I'll give you an introduction to accounting by telling you a story. It's a story about Claudio, and how he runs his business in Italy.

Before we start, let's just get clear on what accounting is. Accounting makes it possible to systematically record, analyze, and report important financial information, and communicate the financial health of a business to all interested parties.

It's called the language of business, and it's the backbone of any company because every business needs reliable data to make informed decisions.

what does that really mean?

Let's just take a moment to make this a bit more transparent, and understand the basics of accounting.

FAQs Related Questions & Answers :)


Introduction to Accounting. | What is accounting?
Accounting is a useful way of recording and summarizing financial information. Businesses use accounting to keep their financial information organized which helps them in making sense of their financial data and also keeps them compliant with financial regulations. Learn More. 


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What is The Accounting Equation?
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Accounting Equation
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Journal Definition - What is a Journal?
Journal definition including break down of areas in the definition. Analyzing the definition of key terms often provides more insight into concepts.
The term journal can be defined as Record in which transactions are entered before they are posted to ledger accounts; also called the book or original journal. Learn more.


What is a General Ledger? (Recording Nonprofit Transactions)
What is a general ledger? A general ledger is a list of transactions by account. In this lesson, you’ll learn what transactions are, how and when to record them, and how they impact your nonprofit's accounting system. Learn more.


Depreciation explained
What is depreciation? How to calculate depreciation? Depreciation, amortization, and CapEx tutorial.
Overview of depreciation accounting (concept and application), and related topics such as accumulated depreciation, book value, residual value, historical cost, fixed assets, amortization, useful life, capital expenditures (CapEx), and capitalization. Intended for students and business people at both entry and advanced levels. Learn more.


The TRIAL BALANCE Explained (Full Example!)
Learn how to prepare a Trial Balance using T Accounts and Journal Entries. The Trial Balance is made easy in this episode of Accounting Stuff - Accounting Basics for Beginners Lesson 5 - you will learn: Learn more.

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