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Reading Financial Reports For Dummies, 4th Edition
book

Reading Financial Reports For Dummies, 4th Edition

by Lita Epstein
April 2022
Beginner content levelBeginner
384 pages
9h 56m
English
For Dummies
Content preview from Reading Financial Reports For Dummies, 4th Edition

Chapter 4

Digging into Accounting Basics

IN THIS CHAPTER

check Understanding the two main accounting methods

check Deciphering debits and credits

check Examining the Chart of Accounts

check Looking at the different types of profit

Ah, the language of financial accounting — debits, credits, double-entry accounting! Just reading the words makes your heart beat faster, doesn't it? The language and practices of accountants can get the best of anyone, but there's a method to the madness. Figuring out that method is a crucial first step to understanding financial reports.

In this chapter, I help you understand the logic behind the baffling and unique world of financial accounting. And you don't even need a pocket protector!

Making Sense of Accounting Methods

Officially, two types of accounting methods dictate how a company records its transactions in its financial books: cash-basis accounting and accrual accounting. The key difference between the two types is how the company records cash coming into and going out of the business.

Within that simple difference lies a lot of room for error — or manipulation. ...

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Publisher Resources

ISBN: 9781119871361Purchase Link