Unit 1 : “Accounting” – the language of business

Often referred to as the language of business; accounting is more a means of keeping score in a common format.

Accounting involves recording business transactions in financial terms and reporting that information to business owners and other interested parties.

Business transactions such as:

  • Making a sale
  • Buying goods and services
  • Paying Staff
  • Borrowing money
  • Paying loans back
  • Investing in assets (machinery, buildings, vehicles etc)
  • Paying tax

are described in accounting for the impact that they have and evaluated to a common base known as money.

By common agreement in the UK we accept that the money base is £ sterling (it could be any other unit of measure if we all agreed and recognised it).

The business score in accounting is usually presented in three documents, each in a particular format and showing financial information of different significance:

Finance course-Unit1-02-02

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