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.