Accounting 1 Module 1

What is accounting?

The language of business- a tool that summarizes a firm's financial picture

What essentially summarizes a company's net worth at any given point in time and shows what the company owns, what it owes, and what its net worth is?

Balance sheets

What describes the company's financial performance for the current year, indicating whether value was created or destroyed?

Income statement (profit and loss statement)

What is the largest expense items of companies?

Taxes (15-30%)