Accounting Basics
The
accounting
basics include an overview of accounting. Accounting is a profession in
which trained accountants gather financial information about a company or individual and report
this information in a summarized format that can be understood.
Accountants must be certain to capture all financial events or possible
events that have an effect on finances.
Usually, before an individual
becomes an accountant, he
must go to college and acquire a bachelor degree. From that point, many
go on to work for a CPA firm and then take a CPA exam to become a
Certified Public Accountant. Other accountants work for
businesses
as cost accountants,
payroll and accounts payable clerks, financial advisors, etc. There are
many different types of accountants and job descriptions.
In a four year
degree program, an accountant will learn what accounting is,
the principles
of accounting, how to use accrual accounting,
cash
basis accounting,
accounting
formulas, accounting
terms, internal
controls, as well as learn about accounting
history and ethics.
Accounting
is used by:
Accounting is very important to the world of business.
Without it, the country and the world would not have much to
rely on to determine if a business is in good financial shape. A
business is run by analyzing costs and revenues to determine
if
products and services are profitable. It is the accountant's job to
insure that revenue and costs are accurately reported in order to aid
management and other stakeholders in a business in making well informed
decisions.
Can you
imagine a bank making a loan to a business without knowing what
their revenue and expenses are? Would you invest thousands of
dollars in company stock if you didn't understand their financial
position?
While there have been scandals such as Enron that have involved
misleading accounting, the system we have is continually improving and
evolving.