The accounting equation
Assets always equal liabilities plus owners' equity, and every transaction preserves that balance. This identity is the backbone of double-entry bookkeeping.
Financial Accounting, 8th Edition
3 ideas
The four financial statements
The balance sheet, income statement, statement of cash flows, and statement of equity together report a firm's position and performance. Each answers a different question about the business.
Accrual accounting and matching
Revenue is recognized when earned and expenses are matched to that revenue, regardless of cash timing. Accrual accounting portrays economic reality over cash movement.