Book accounting tutoring in Mississauga

What are the 5 basic accounting principles?

Accounting principles are rules that organizations follow in order to report their financial information. Of these principles, there are five accounting terms that ensure certain accounting practices are followed in alliance with best practices. Additionally, this means they are in accordance with state and federal laws. Depending on the size of your business, they can be used as references for stakeholders or any other managing entities. The five basic accounting principles are as followed:

1. The Revenue Principle

You may hear this referred to as “the revenue recognition principle”.  This is the concept that a business ought only to recognize value when its earnings processes are completed. This means a business should only record revenue at the point of sale when the buyer takes possession of the item or the service is complete.

2. The Expense Principle

This basic accounting principle identifies the point in time that a company can log a transaction as an expense. It is sometimes referred to as the expense recognition principle. This concept states that an expense occurs at the time the business accepts the good or service from an entity.

3. The Matching Principle

Under the matching principle, each item of revenue should match an item of expense. For example, if you are selling apparel and a customer buys a pair of pants, you would also account for the costs of making said pants. The expense to make the pair of pants must match the revenue earned from selling them.

4. The Cost Principle

The cost principle is the concept that a business should not use the resell cost to record the cost of an item in the books. Rather, the business ought to use the historical cost. For example, let’s hypothesize that your business owns the space it operates out of, you would list the historical costs of the property as the cost, instead of the fair market value of the property.

5. The Objectivity Principle

Lastly, we have the objectivity principle. In accounting, the objectivity principle is the concept that your books should only contain verifiable data that can be backed up with objective evidence. There should never be a subjective measurement of values, even if that data is better than the verifiable data. If you were to forego this rule, it could lead to confusion between different parties who may not find the subjective information easy to understand.

What are the lessons in accounting?

Accountants provide financial advice and help businesses to manage their money and maximize profits. The job often involves preparing financial reports, checking the accuracy of financial documents, and advising on finances. The lessons in accounting mostly will consist of learning how to execute the aforementioned tasks, such as:

• Understanding documents such as cash flow statements, income statements, profit and loss statements, and balance sheets.
• Debits and credits - where a debit is a record of all money expected to come into an account and a credit is a record of all money expected to come out of an account.
• Accounts Receivable and Accounts
• Understanding the Costs of Goods Sold (COGS) & Cost of Sales (COS)
• Expenses - these include any purchases you make or money you spend in an effort to generate revenue.
• Margins, margins, and more margins!

How can I learn accounting by myself?

Accounting is a fascinating field, full of subspecialties that span across various sectors here in Mississauga. But can you learn accounting by yourself? Yes, but you will probably need some help and will definitely need some accreditation to be able to work as an accountant. Typically speaking, accounting usually requires at least a University level degree before continuing a professional training program. Sometimes, it is possible to work towards a degree apprenticeship as an accounting or taxation professional. Regardless of the path you choose, if you’re wanting to improve your chances at acing an accounting exam in University or passing the CPA exam before launching your career, look no further! In fact, many of our Superprof tutors offer a free first lesson to see if it’s the right fit for you.   

Lucky for you, here in Mississauga our Superprof accounting tutors are accounting professors, CPAs, PhD candidates, seasoned accounting professionals and more! If you’re curious about having a career as an accountant, our tutors can also give advice and tips on how you can land your dream job in Mississauga. Our Superprof tutors are dynamic and well versed in all specializations that suit your needs.

Our Mississauga accounting enthusiasts can prepare you for your next accounting exam in Mississauga in person or online - giving you freedom of time and choice! Better yet, our accounting tutors can help you understand a variety of accounting topics based on your needs and interests.