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Basic Accounting Introductions - Lesson Summary

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The key points from this module are:
A double-entry accounting system means that every transaction affects at least two accounts.
The cash accounting system recognizes expenses and revenues only when a payment is made or received.

Businesses apply the accrual accounting system as this allows a business to recognize revenues and expenses incurred, not when a payment is received or made.

An account is a tool for transaction recording.

Assets are all resources owned or controlled by the business.

There are two groups of Assets, they are:
Current assets and non current assets

Liabilities are obligations to third parties that must be paid back.

The amount of the assets funded by the owners is known as owners’ equity.

The traditional accounting equation expresses the relationship between assets, liabilities and owners’ equity.
Transactions are business events that affect the business’s financial position.