Accounting Fundamentals

Dr. Hercules Bantas

A Reluctant Geek Academic Guide

Published by The Reluctant Geek

Smashwords Edition

Melbourne, Australia

Copyright Hercules Bantas 2012

Financial Statements and the Accounting Equation

The General Journal and the Ledger

Adjustments and Closing the Books

Inventories and Retail Operations

Accounting Information Systems

Financial Statements and the Accounting Equation

One of accounting's key tasks is financial reporting. Information on the economic performance of an entity must understood by interested parties, both internal and external to the entity, so they can judge an entities performance and compare it with other like entities. The financial statements rely on the logic of the accounting equation, which describes the relationship between assets, liabilities and owner's equity. The accounting equation also provides the logic for accounting recording procedures, but these procedures are outside the scope of this guide. Key elements in the communication function of accounting are the Generally Accepted Accounting Principles within a nation state. In essence, these conventions provide a common 'language' for accounting within a society that encourages consistency in reporting economic information. This study guide will begin by looking at the functions of accounting, before moving on to discuss the accounting equation, accounting conventions, and financial statements.