Do you want to know how to learn accounting?<\/p>\n
Consider that accounting is a process of collecting, recording, and communicating financial information about your company.<\/p>\n
The main goal of accounting is to give a true and fair view of the financial position and performance of your company.<\/p>\n
The information used by accountants is generally accepted as reliable information that also provides a decision-making tool for you and all managers within the business.<\/p>\n
If you take time to study accounting, you can gain insights into how well your company operates on a daily and even annual basis.<\/p>\n
Read on to learn all about how to learn accounting on your own.<\/p>\n
You can strengthen your accounting skills by gaining an understanding of the difference between accounting and bookkeeping.<\/p>\n
Bookkeeping involves recording, classifying, and summarizing business transactions. The bookkeeper records financial events such as payments on loans, accounts payable, and checks written.<\/p>\n
An accountant creates and analyzes financial statements to report accurately what’s going into profit or loss each month.<\/p>\n
To learn accounting, you need a powerful tool that can help take your business to the next level.<\/p>\n
Excel, for example, goes beyond a simple accounting worksheet<\/a> as it offers more than just spreadsheets and charts. It gives accountants an edge with its advanced features such as formulas for complex calculations or graphs. Use spreadsheets to make financial forecasts based on numbers tracked over time.<\/p>\n What is the best way to study accounting? Start to read accounting books.<\/p>\n For example, you can purchase a book such as “Accounting Tools<\/a>” by Paul D. Kimmel, Jerry J. Weygandt, and Donald E. Kieso to learn how to use accounting to drive business decisions.<\/p>\n If you’re looking for a simple accounting book that explains basic principles, then consider purchasing “Accounting Guide<\/a>” by Josh Bauerle.<\/p>\n Before they try to find an accountant<\/a>, some people enjoy the challenge of learning on their own time and prefer in-person classes. Others enjoy accessing knowledge at any moment. An online course can serve as a quality accounting coach.<\/p>\n Online courses are typically less expensive than in-person classes. You can also hop into and out of an online course around your busy schedule. Of course, if you enjoy learning in person, you might not enjoy the solitude of learning online.<\/p>\n Let\u2019s review four basic accounting principles that can help build your knowledge base.<\/p>\n Record both sides of the transaction via the dual-entry system. For example, if you purchase office supplies for $1, your debit account decreases by $1, and your credit account increases by $1.<\/p>\n Dual-entry bookkeeping provides a tool that helps small business owners make better decisions about their operations. For instance, if you want to buy a new computer for your business, the dual-entry system allows you to see how much it will cost by looking at your debit and credit accounts.<\/p>\n You use debits and credits when making dual-entry records. For example, if you have an increase in salary expenses, your accounting records show a debit on the left side and a credit on the right side.<\/p>\n Practice recording debits and credits to become better at accounting. The process helps you understand how each transaction affects financial statements.<\/p>\n Using a general ledger allows you to track everything from accounts payable and receivable to assets and liabilities.<\/p>\n In addition, consider linking your financial statements together. This means that when you make changes in one part of the system, it will automatically update related accounts. For example, if you decrease your debit account for office supplies, then the cash account decreases, too.<\/p>\n You can do this by setting up master accounts in your general ledger. These then link to related sub-accounts.<\/p>\n A cash account represents an immediate exchange of currency between two entities. An accrual account is any transaction that results in a credit or billing situation.<\/p>\n Get good at reading and analyzing the following financial statements:<\/p>\n You\u2019ll start seeing trends that relate to earnings, spending, and profit.<\/p>\n It isn\u2019t enough to learn the numbers side of accounting. Pay attention to general principles and regulatory agencies as well.<\/p>\n GAAP is the system used to produce official financial statements. It serves as the standard for measuring the success of your company in terms of generating profit. For example, using GAAP, you can determine what type of bank loan your business qualifies for based on the cash flow your company generates.<\/p>\n GAAP represents a consensus about how to record or classify particular transactions as well as how to present financial statements.<\/p>\n The FASB decides when and if to issue new standards and is accountable for setting GAAP in America. Read the FASB website<\/a> to see how decisions regarding accounting standards get made, who’s making them, and why.<\/p>\n The generally accepted industry practices of accounting include the following.<\/p>\n The main difference between bookkeeping and accounting is that bookkeeping involves recording everyday transactions, while accounting analyzes the costs and revenues of your business over time.<\/p>\n The list of basic accounting terms you need to become familiar with includes.<\/p>\n Now you know the steps for how to learn accounting. As you can see, it\u2019s not difficult. It merely requires dedication to get started and the discipline to stay true to the goal.<\/p>\n","protected":false},"excerpt":{"rendered":" Do you want to know how to learn accounting? Consider that accounting is a process of collecting, recording, and communicating financial information about your company. The main goal of accounting is to give a true and fair view of the financial position and performance of your company. The information used by accountants is generally accepted …<\/p>\nRead Books on Accounting<\/h3>\n
Select a Learning Method and Dedicate Time<\/h3>\n
2. Understand and Practice Accounting Basics<\/h2>\n
Understand Dual-Entry Bookkeeping<\/h3>\n
Practice Recording Debits and Credits<\/h3>\n
Set Up and Maintain a General Ledger<\/h3>\n
Distinguish Between Cash and Accruals<\/h3>\n
3. Learn How to Read and Analyze Financial Statements<\/h2>\n
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4. Principles of Accounting<\/h2>\n
Generally Accepted Accounting Principles (GAAP)<\/h3>\n
The Financial Accounting Standards Board (FASB)<\/h3>\n
Generally Accepted Industry Practices<\/h3>\n
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Understanding the Difference Between Bookkeeping and Accounting<\/h2>\n
Basic Accounting Terms<\/h2>\n
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Conclusion<\/h2>\n