Financial Accounting

On this page will be the basics of financial accounting. Listed below is the accounting equation, the steps of opening and closing the books, and a few detailed pieces of accounting.


The Accounting Equation


Assets=Liabilities-Owners Equity (OE-Drawings+Revenues-Expenses)


Four types of statements accountants use are listed below


  1. Income Statement
  2. Statement of Owners Equity
  3. Balance Sheet
  4. Statement of Cash Flow

The Accounting Process


Assets=Liabilities-Owners Equity (OE-Drawings+Revenues-Expenses)


Adjusting Accounts



Closing Books


  • Temporary Accounts=Revenue, Expenses, Drawings, Income Summary
  • Permanent Accounts=Balance Sheet Items

    • Merchandising Accounts


    FIFO. LIFO, Weighted Average


    Internal Controls


    Accounts and Notes Receivale