Introduction: Accounting Principles and Practices


By the end of this section, you will be able to:

  • Explain the meaning of the term Generally Accepted Accounting Principles (GAAP).
  • Define assets, liabilities, and owner's equity.
  • Describe the causes of change in owners' equity, specifically: Owner investments, Owner withdrawals, Net income, Net loss
  • Explain the effect of various transactions on the accounting equation.
  • Prepare a simple: Income Statement, Statement of Owner's Equity, Balance Sheet