Introduction to Accounting: Types, Classification, and Basic Terms

Cash Book and Accounting Equation

• The primary purpose of a cash book is to record and track all cash transactions, including receipts and payments, in a systematic and organized manner.
• The accounting equation, also known as the balance sheet equation, is Assets = Liabilities + Equity, and its significance lies in providing a snapshot of a company's financial position at a specific point in time.
• The accounting equation is a fundamental concept in accounting, as it ensures that the total value of a company's assets is equal to the total value of its liabilities and equity.

Petty Cash Book

• The purpose of a petty cash book is to record and track small, day-to-day cash transactions, such as expenses for office supplies, travel, or other miscellaneous items, which are not significant enough to be recorded in the main cash book.

Test your knowledge on the types and classification of accounting, basic terms used in accounting, accounting standards, accounting equation, journal and ledger, and cash book including single column and double column formats.