The first thing we clarify is the basic accounting concepts that you should know in order to interpret your business accounts and thus achieve a global vision of your company's situation.
Most people have heard (either on television, in the press or in their environment) terms such as debit, credit, assets, liabilities, share japan business email list capital, balance sheets... but it is not clear to them how they and their businesses could benefit if they knew the meaning and application of these accounting concepts .
Basic Accounting Concepts
In this article I will explain to you in a simple and understandable way , what are the basic concepts that every person (business owner or not) should know.
I'll give you an example:
We have a fashion company called ROPA-FASHION, run by two partners, which buys from factories and then sells to physical stores. The two partners contribute €1,800 each (€3,600 in total share capital) to the company in order to start buying clothes.
1. Must
This is the debit account for the company; that is, expenses increase by the debit account.
2. To have
This is a credit account for the company; that is, income and liabilities increase on the credit side.