My latest job requires me to get acquainted with Accounting and its principles leading up to some advanced concepts too. Now for someone who has an engineering background, this is no easy task I tell you! In fact, the first few sessions were so boring, I almost fell asleep! :P … Thankfully, now I have started getting the hang of it a bit as some bull has made its way in me head if you know what I’m saying! :)
Two cheers for Accrual-based accounting apparently, it follows the US GAAP principle where as cash-based does not. Something to do with realizing revenue at the proper time. The real mind-boggling stuff for any accounting newbie is to learn when certain types of accounts are debited and when they are credited. Couldn't they just make one freaking rule for everything?! I guess not! Asset and expense accounts, apparently, are debited on increase and credited on decrease whereas liability, equity and revenue accounts are credited on increase and debited on decrease! You see my predicament? Now we talk of acquisitions and depreciations like it’s our jargon … uff … still needs some getting used to. More on it later.