This document provides an introduction to fundamental accounting concepts for city employees who work with budgets. It defines key terms like accounting, bookkeeping, assets, and liabilities. It also explains what GAAP stands for (Generally Accepted Accounting Principles) and lists some of the core GAAP principles like comparability, reliability, and realization. The goal is to improve budget communications and transparency by giving employees a baseline understanding of accounting standards and terminology.

1. Budget -- Associate Guide
Fundamental Accounting Concepts
Part I
Building your foundation
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2. Budget -- Associate Guide
SECTION I: INTRODUCTION
 Course Information – Improve communications and transparency by making sure all
City Employees who are in charge of handling and/or creating budgets has a baseline
understanding of general accounting concepts.
 Learning Objectives – Upon completion of this course, you will be:
o Introduced to and apply basic accounting terms.
o Introduced to and apply GAAP Principle.
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3. Budget -- Associate Guide
SECTION II: BASIC FINANCIAL TERMS
Define the following terms, using your own words: (Hint: Ok to work in groups.)
Accounting -
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Bookkeeping -
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Assets -
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Liabilities -
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:::Please stay on this page:::
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4. Budget -- Associate Guide
Formal definitions: (Compare you have on the following page)
Accounting – The art of identifying, measuring, recording, interpreting and communication the
results of economic activities
Bookkeeping – The record keeping aspect of accounting
Assets – Anything that the business owns
Liabilities – Anything that the business owes to others.
SECTION III: GAAP Principles
What does GAAP stand for?
Your best guess Actual meaning
G ___________ G ___________
A ___________ A ___________
A ___________ A ___________
P ___________ P ___________
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5. Budget -- Associate Guide
8 GAAP Principles:
 Comparability among different companies
 Reliability of the information
 The business entity concept: A business is a separate distinct entity from its
owner/owners
 The cost principle: Assets and service, and the resulting liability are taken into the
accounting records at cost.
 The going-concern principle: The business will continue to operate, using its assets to
carry on its operations and, with the exception of merchandise, not offering the assets for
sale.
 The objectivity principle: A rule requiring that whenever possible the amounts used in
recording transactions be based upon objective evidence rather than on subjective
judgments.
 The stable-dollar assumption: The idea that the purchasing power of the unit of measure
used in accounting, the dollar, does not change.
 The realization principle: This principle defines revenue as an inflow of assets, not
necessarily case, in exchange for gods for services. It requires the revenue to be
recognized at the time, but not before it is earned.
After reviewing the 8 Principles, how will these principles help you do your job better? (We will
work together as a class.)
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SECTION IV: CLASS REFLECTION
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6. Budget -- Associate Guide
How will knowing general accounting terms improve communications and transparency?
How will knowing GAAP Principles improve communications and transparency?
Other thoughts…
Please keep this workbook as a reference.
Thank you for attending!!!
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