Mastering Accounting Basics for Small to Medium Businesses #shorts #finance

What are the key accounting principles that I need to be aware of as a small business owner? For the most part, if you are a small to medium sized business owner and you're having a review engagement completed or an audit engagement completed, it's required that we follow a specified framework. And the framework that you would follow in this instance would be accounting standards for private enterprise. So ASPE essentially outlines how all of the items on your financial statements come together, some of the judgment and the criteria of how to report and disclose things in your financial statements. In many instances there's hundreds of accounting principles that we should be aware of, but the main ones I would talk about would be revenue recognition, a policy that would identify when you recognize revenue being earned inside your business. And the key element is earned when your revenue, not necessarily when you get the cash in your business, but what is the triggering event that allows you to recognize the revenue being earned in your business.