Debit versus Credit (Accounting Acronyms)

Accounting Acronyms

In accounting we often use abbreviations or acronyms. For example, GAAP (Generally Accepted Accounting Principles), AICPA (American Institute of Certified Public Accountants), etc. In addition, we oftentimes see abbreviations for debit and credit. We use dr for debit and cr for credit.

Learn more about accounting terms, accounting principles, and the accounting equation

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Accounting Terms, Accounting Principles and the Accounting Equation

Accounting Terms, Accounting Principles, Accounting Equation

Accounting is the language of business that reports financial data in the form of reports. These reports are also referred to as financial statements. There are four financial statements that are required by GAAP (generally accepted accounting principles): Income Statement, Statement of Retained Earnings, Balance Sheet and the Statement of Cash Flows.  

Learn more about the operating activities section of the Statement of Cash Flows (with video)

The area of financial accounting deals with providing information to users outside the business to assist those users in decision making about a business. GAAP requires that useful information must be relevant, reliable and comparable.

What is Activity-Based Costing? A Managerial Accounting topic

What is Activity Based Costing?

In a traditional costing system, sometimes referred to as simple costing, costs are distributed evenly to the users of the costs. This can be not only an unfair process but also can lead management to make wrong decisions regarding product sustainability for the business.

For example, let us say there are three roommates: David, Matt and Brian. They began sharing the costs ($900 per months) equally but were not participating in the activities of living there equally. The activities that each roommate may have partook were eating, watching TV, and surfing the Internet.