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Introduction to Accounting

Accounting is the language of business.

What is Accounting?

Systematic recording, analyzing and reporting of financial transactions.

Think: Business diary + report card combined.

Why Learn It?

  • For business owners: Track profit/loss
  • For investors: Read financial statements
  • For job seekers: Finance jobs need basics
  • For everyone: Manage personal finances better

The Accounting Equation

📊 Golden Rule

Assets = Liabilities + Owner's Equity

What you OWN = What you OWE + What you OWN free & clear

Example: Business has:

  • Cash: ₹5L, Inventory: ₹3L (Assets = ₹8L)
  • Loan: ₹4L (Liability)
  • Owner's capital: ₹4L (Equity)

Check: 8L = 4L + 4L ✅

Types of Accounts

  1. Assets: Cash, inventory, equipment
  2. Liabilities: Loans, payables
  3. Equity: Capital, retained earnings
  4. Revenue: Sales, service income
  5. Expenses: Rent, salaries, utilities

Quiz

Test Your Knowledge

Test Your Knowledge

Question 1 of 1

1. What is the main concept covered in this lesson?

Introduction to Accounting
Something unrelated
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Key Takeaway: Understanding Introduction to Accounting is essential for making informed financial decisions.

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