Part II
Reviewing Some Accounting Basics
In this part . . .
This part of the book introduces bookkeeping and the basic methodology of financial accounting. In Chapter 5 you get a chance to dig into collecting, sorting through, and entering accounting data into business accounting software. Most bookkeeping duties involve basic data entry done by clerks. However, this work is the foundation for the work financial accountants do, so understanding how bookkeeping works is an integral part of your financial accounting class (and you’ll be tested on bookkeeping topics in your course).
In Chapter 6 you get a primer on the difference between the cash and accrual methods of accounting. Your financial accounting class is primarily concerned with the accrual method because it’s required under generally accepted accounting principles (GAAP). However, to truly understand the accrual method you have to understand how it differs from the cash method. I also walk you through the Financial Accounting Standards Board’s Statements of Financial Accounting Concepts and tie these concepts to material you encounter in Parts III and IV of this book and throughout your financial accounting class.
