Imagine for a moment that you are home for the summer and decide to mow lawns to make some money. With $100 of your own money and $200 borrowed from a relative, you purchase a $260 lawn mower, a $20 gas can, and $20 of gas. During June, you mow 40 lawns at $10 each, buy $175 of additional gasoline, and pay your relative $1 of interest. At the end of June, you have $194 in cash, $10 of gasoline, and $30 due from customers. Given this information, can you tell what happened to your business in June? Were you profitable? What do you have to show for your efforts? How can you tell? Getting answers to such questions requires accounting. Accounting is the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions. Put more simply, accounting is the ´language of business.´ When you want to know about the financial results of a business, you must understand and speak accounting. The purpose of this book is to teach you this language. With this overall purpose in mind, the current chapter introduces the basic terms, principles and rules that comprise the grammar of the accounting language. It does so by creating the June financial statements of the lawn service scenario described above. At the end of the chapter, you should be familiar with the four main financial statements of accounting. You should also have a working accounting vocabulary that can be built upon in the following chapters.