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# Accounting

**Def** :: accounting is a type of information system, a system where we deal with financial decision to fullfil the user's needs.

## 1. Steps of an Accounting Process
1. Identification
2. Recording
3. Communication.

## 2. Users and uses of accounting
- **Internal users**
- **External users.**

## 3. Ethics is a fundamental business concept
There are *2* kinds of ethics:
- **Law**
- **Norms.**

## 4. Generally Accepted Accounting Principle
**def** : GAAP(generally accepted accounting principle) are some standard rules to follow which is used to write proper financial account.

### 4.1. Measurement Principle.
#todo : Add sidenotes
<aside>
These are mostly selected by considering <em>relevance</em> and <em>faithful representation</em>.
</aside>

## 5. 5.GAAP uses one of the ==2== measurements
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1. [[Cost Principle]] :: Buying value of an asset 
2. [[Fair Value Principle]] :: Market(selling) value of an asset.

### 5.1. Assumption
1. Monetary Unit Assumption
2. Economic Entity Assumption.

### 5.2. Proprietorship
### 5.3. Partnership
### 5.4. Corporation

## 6. The Accounting Equation
- Basic equation:: $$Assets = Liability + Owner's Equity$$
	- **Assets**
	- **Liability** :: Something of a asset, that is used by the owner to get benifit from it.
	- **Owner's Equity**
		-  It has 4 section
			1. Capital(+)
			2. Revinue(+).
			3. Expense(-)
			4. Drawing(-).
- Extended Equation
	- $$Assets = liability+Capital+Revinue-Expense-Drawing$$