Lesson 1: Define AccountingOrutt Academy Finance & AccountingUnit 1: Basic Accounting Concepts

Basic Accounting Concepts• If you don't understand the basic accounting concepts then

you're going to have a tough time with the subject. That’s why this unit is CRUCIAL to your success in the rest of the course.

What is Accounting?

Accounting is a system of recording information about a business.

Accounting Information• The information that is collected is primarily numerical.• This information is then presented to various people to

help them make decisions.

To Account…

• To account for something means to keep a record of something in your business by using the accounting system.

An accountant (or bookkeeper) collects documentation and records this information, categorizes it (i.e. organizes the different bits of information under certain categories), and presents it in specific formats.

Financial StatementsAccounting information is finally presented in the form of financial

statements – the key reports of a business.

Bookkeepers• Bookkeepers are

involved in data collection and entry.

Accountants

• Accountants prepare and present financial statements and fulfill an advisory or consulting role. • Accountants have even become business strategists,

intimately involved in guiding the operations of a business.

Learn more• Learn more about the accounting profession here!