From the course: Financial Tactics and Tools to Run Your Business
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Defining accounting
From the course: Financial Tactics and Tools to Run Your Business
Defining accounting
Accounting is the language of business. I wish I had a better way to say it, but ultimately, accounting is the how a business is able to record all of the transactions that happen. There is one critically important reason to unlocking why you need to deal with these strict accounting requirements through standard financial statements. You're effectively communicating your business performance to external investors, creditors and other stakeholders. These statements are then used for them to make trusted decisions to be able to compare your business performance to any other business. In the United States, businesses are regulated by the generally accepted accounting principles, which are common set of rules put forth by the accounting bodies and the S.E.C. that creates standard methods for companies to present their results and forecasts. Think about it like this If you were doing things your own way and I was doing things a different way, how does that third person make a smart…
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