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Financial Accounting Fundamentals
The building blocks of accounting - start here if you're new
18 TopicsBeginner FriendlyInteractive Practice Available
The Foundation
Start here - the core concepts everything else builds on
Recording Transactions
How to capture and organize financial events
The Accounting Cycle
The complete 10-step process from transaction to statements
Financial Statements
The output - reports that tell the financial story
Key Concepts
Important principles and methods
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Try It in the Learning Lab→Frequently Asked Questions
The accounting equation is Assets = Liabilities + Equity. It's the foundation of double-entry accounting and must always stay in balance. Assets are what a company owns, liabilities are what it owes, and equity is the owner's residual interest.
Debits and credits are simply left (debit) and right (credit) entries in an account. For assets and expenses, debits increase the balance. For liabilities, equity, and revenue, credits increase the balance. Every transaction requires equal debits and credits.
The 10 steps are: (1) Analyze transactions, (2) Journalize, (3) Post to ledger, (4) Prepare unadjusted trial balance, (5) Make adjusting entries, (6) Prepare adjusted trial balance, (7) Prepare financial statements, (8) Make closing entries, (9) Prepare post-closing trial balance, (10) Make reversing entries (optional).