Why Study Accounting and Finance?
Accountants record, classify, summarise, interpret and communicate the financial information about a business. However they do more than just prepare financial reports on the activities of an organisation. Experienced accountants work strategically with the executive and management teams by providing expert financial advice on the impacts of management decisions, compliance and governance and the deployment of systems, resources and processes throughout the company. At Macquarie, students learn to apply accounting skills to a range of different managerial, business and problem-solving situations.
According to the Australian Government Australian Careers website, average weekly earnings for accountants are 20% higher than the all occupations average wage* and job prospects are very good. Property and business services industry, finance and insurance companies, and Government Departments were the biggest employers.
Depending on the program selected, accounting also provides training for a wide range of vocations including:
* Auditing
* Merchant banking
* Government accounting
* Public practice
* Investment management
* Service industries
* Manufacturing
* Stockbroking
* Management consulting
* Taxation
Finance concerns the commercial activity of providing funds and capital. It studies the ways in which individuals, businesses and organizations raise, allocate and use monetary resources over time, and addresses the problems of risk and liquidity inherent in the projects. It is concerned with decision making within financial and capital markets and the financial instruments that are traded in those markets and looks at how these interactions facilitate the flow of funds and the control of risk. Finance deals with financing and investment decisions and considers the the development of risk-hedging strategies so as to minimise the damaging effects of adverse movements in share prices, interest rates, exchange rates, and other uncertainties.
According to the Australian Government Australian Careers website, average weekly earnings for financial managers are 39% higher than the all occupations average wage* and job prospects are very good. Property and business services industry, finance and insurance companies, and Government Departments were the biggest employers.
Depending on the program selected, Finance provides training for a wide range of vocations including:
* financial managers
* bank and insurance managers
* multinational funds managers
* investment analysts
* financial researchers in stockbroking firms, banks and government departments
* corporate financial managers or treasurers
* security and derivatives traders
* portfolio managers for trust funds, superannuation funds and insurance companies
* investment analysts in stock exchange markets
* management consultants
* corporate advisors in merchant banks, public accounting firms, and management consulting firms.
*These figures cannot be used in determining a particular wage rate or as an indication of what a person will earn in that job
Tuesday, May 25, 2010
Oxford Diploma in Financial Strategy
"An understanding of financial strategy is critical for anyone seeking the most senior and rewarding careers in finance. The Oxford Diploma in Financial Strategy will challenge and deepen your knowledge, and offer the competitive advantage of an MBA."
Kathy Harvey, Director, Diploma Programmes
The University of Oxford Diploma in Financial Strategy is a prestigious postgraduate qualification for senior finance professionals. It is an opportunity to broaden and enhance skills while gaining an Oxford qualification.
The programme comprises of the finance and strategy components from Oxford’s Executive MBA to further advance professional qualifications and experience. Participants learn to apply expert skills in strategic management, finance and management control systems. Each module is taught over four days in January, April, June and September allowing participants to study alongside employment, and complete the programme in one year.
The Diploma is rigorous and intellectually challenging. It attracts participants from all over the world, and provides world-class teaching, analysis and exchange of ideas in a global context.
The Oxford Diploma in Financial Strategy:
* Builds on qualifications and experience of senior accounting and finance professionals
* Four intensive short modules of intensive teaching from Oxford professors
* Learn to apply expert skills in strategic management, finance and management control systems
* Gain a Masters level qualification from the University of Oxford
Kathy Harvey, Director, Diploma Programmes
The University of Oxford Diploma in Financial Strategy is a prestigious postgraduate qualification for senior finance professionals. It is an opportunity to broaden and enhance skills while gaining an Oxford qualification.
The programme comprises of the finance and strategy components from Oxford’s Executive MBA to further advance professional qualifications and experience. Participants learn to apply expert skills in strategic management, finance and management control systems. Each module is taught over four days in January, April, June and September allowing participants to study alongside employment, and complete the programme in one year.
The Diploma is rigorous and intellectually challenging. It attracts participants from all over the world, and provides world-class teaching, analysis and exchange of ideas in a global context.
The Oxford Diploma in Financial Strategy:
* Builds on qualifications and experience of senior accounting and finance professionals
* Four intensive short modules of intensive teaching from Oxford professors
* Learn to apply expert skills in strategic management, finance and management control systems
* Gain a Masters level qualification from the University of Oxford
International Accounting Standard
IAS 1
Presentation of Financial Statements
Issued in September 1997:
Replaced IAS1 (January 1975), IAS 5 (October 1976), IAS 13 (November 1979)
Revised in September 2007
Complete set of financial statements
(1) statement of financial position
--> at the end of period
(2) statement of comprehensive income
--> for the period
(3) statement of changes in equity
--> for the period
(4) statement of cash flows
--> for the period
(5) statement of financial position
--> at the beginning of
--> earliest comparative period
(6) notes, a summary of significant accounting policies
Accrual basis of accounting
--> is used in preparing financial statements
--> except for the statement of cash flows
Comparative information
--> (in respect of the previous period)
--> is required for all amounts
--> reported in the current period's
--> financial statements
Consistency of presentation and classification
--> (from one period to the next)
--> is required
Statement of comprehensive income
--> can be presented in (1) or (2)
(1) in a single statement of comprehensive income
(2) in two statements:
(2a) separate income statement
--> for profit or loss
(2b) separate statement of comprehensive income
--> for other comprehensive income
Presentation of Financial Statements
Issued in September 1997:
Replaced IAS1 (January 1975), IAS 5 (October 1976), IAS 13 (November 1979)
Revised in September 2007
Complete set of financial statements
(1) statement of financial position
--> at the end of period
(2) statement of comprehensive income
--> for the period
(3) statement of changes in equity
--> for the period
(4) statement of cash flows
--> for the period
(5) statement of financial position
--> at the beginning of
--> earliest comparative period
(6) notes, a summary of significant accounting policies
Accrual basis of accounting
--> is used in preparing financial statements
--> except for the statement of cash flows
Comparative information
--> (in respect of the previous period)
--> is required for all amounts
--> reported in the current period's
--> financial statements
Consistency of presentation and classification
--> (from one period to the next)
--> is required
Statement of comprehensive income
--> can be presented in (1) or (2)
(1) in a single statement of comprehensive income
(2) in two statements:
(2a) separate income statement
--> for profit or loss
(2b) separate statement of comprehensive income
--> for other comprehensive income
Accountancy courses qualifications
So, what is a rewarding career? A career with a high salary? A career which has a respected position in society? A career with mobility and excellent prospects?
The accounting profession offers all of these opportunities, as well as a challenging and varied work environment. Accountancy is essentially the effective management and administration of the financial affairs, and accountants are a vital part of any organisation's operations.
As a qualified accountant, you have the opportunity to pursue a variety of finance careers in any of the world's financial centres and in any business sector. Accountants are employed in the public or private sector, industry or commerce, and across the whole spectrum of financial work; from audit and public practice; to management or financial accounting; in taxation related work: or in management consultancy and financial services. Accountants are often perceived as boring 'number crunchers', but the variety of career opportunities open to the qualified accountant highlights this as a misconception.
With accountancy you have the luxury of career mobility; the freedom to choose your own career path and the opportunity to gain the knowledge and skills required to rise to the top in your chosen field. To benefit from career mobility you must acquire the skills that employers want. Employers want quality personnel, professional, flexible and adaptable employers. How do you acquire these skills?
To become qualified accountant in the UK and in other countries around the world the generally accepted route is to join a professional accountancy body and to pass the professional examinations. In addition to this, bodies also require their graduates to satisfy stipulated work experience to gain full membership and qualification.
Taking the UK as an example, the accountancy profession is unregulated except for certain areas, which are regulated by law. These three areas are; investment advice, insolvency work and company audit work. Individuals wishing to practise as an auditor in the UK are required by law to hold an audit qualification from a Recognised Qualifying Body (RQB) there are five RQB's: Association of International Accountants, Institute of Chartered Accountants in England and Wales; Institute of Chartered Accountants of Scotland, Institute of Chartered Accountant in Ireland; Association of Chartered Certified Accountants.
The majority of students pursuing a career in accountancy opt to study a degree prior to their professional examinations.
Most professional bodies operate a policy of exemptions designed to reduce repetition for students who have already attained a qualification of an acceptable standard. For students holding degrees, this means that they are often rewarded exemptions from the whole or part of the first level of a professional qualification, effectively reducing the time scale for qualification.
The accounting profession offers all of these opportunities, as well as a challenging and varied work environment. Accountancy is essentially the effective management and administration of the financial affairs, and accountants are a vital part of any organisation's operations.
As a qualified accountant, you have the opportunity to pursue a variety of finance careers in any of the world's financial centres and in any business sector. Accountants are employed in the public or private sector, industry or commerce, and across the whole spectrum of financial work; from audit and public practice; to management or financial accounting; in taxation related work: or in management consultancy and financial services. Accountants are often perceived as boring 'number crunchers', but the variety of career opportunities open to the qualified accountant highlights this as a misconception.
With accountancy you have the luxury of career mobility; the freedom to choose your own career path and the opportunity to gain the knowledge and skills required to rise to the top in your chosen field. To benefit from career mobility you must acquire the skills that employers want. Employers want quality personnel, professional, flexible and adaptable employers. How do you acquire these skills?
To become qualified accountant in the UK and in other countries around the world the generally accepted route is to join a professional accountancy body and to pass the professional examinations. In addition to this, bodies also require their graduates to satisfy stipulated work experience to gain full membership and qualification.
Taking the UK as an example, the accountancy profession is unregulated except for certain areas, which are regulated by law. These three areas are; investment advice, insolvency work and company audit work. Individuals wishing to practise as an auditor in the UK are required by law to hold an audit qualification from a Recognised Qualifying Body (RQB) there are five RQB's: Association of International Accountants, Institute of Chartered Accountants in England and Wales; Institute of Chartered Accountants of Scotland, Institute of Chartered Accountant in Ireland; Association of Chartered Certified Accountants.
The majority of students pursuing a career in accountancy opt to study a degree prior to their professional examinations.
Most professional bodies operate a policy of exemptions designed to reduce repetition for students who have already attained a qualification of an acceptable standard. For students holding degrees, this means that they are often rewarded exemptions from the whole or part of the first level of a professional qualification, effectively reducing the time scale for qualification.
What's the Recommended Type of Bookkeeping System and Accounting Method ?
Most accountants when asked will recommend that a business use the double entry bookkeeping system and the accrual basis or method of accounting which is based on the revenue realization principle and a principle called the matching concept. The revenue realization principle states that revenue should be recorded when actually earned.
Don't tell me accountants actually play matchmakers or promote a dating service! No the matching principle is recording the revenues earned during a period using the revenue realization principle and matching (offsetting) the revenues with the expenses incurred in generating this revenue. Why is this so important ? All businesses small and large need information to determine how well or badly they are performing; however, if this information is misleading it could lead to false conclusions and unnecessary actions. Show me what you mean.
The following sample business transactions for a mowing and landscaping company will be used to illustrate the accrual basis of accounting/matching concept and the cash basis of accounting.
January xxxx Billed $30,000 To Customers For Services Performed & Completed In January XXXX
January xxxx Received Payments From Customers of $15,000
January xxxx Billed $12,000 by Outside Contractors For Services Performed & Completed In January XXXX
January xxxx Paid Outside Contractors $8,000
February xxxx Received Payments From Customers of $15,000
February xxxx Paid Outside Contractors $4,000
Don't tell me accountants actually play matchmakers or promote a dating service! No the matching principle is recording the revenues earned during a period using the revenue realization principle and matching (offsetting) the revenues with the expenses incurred in generating this revenue. Why is this so important ? All businesses small and large need information to determine how well or badly they are performing; however, if this information is misleading it could lead to false conclusions and unnecessary actions. Show me what you mean.
The following sample business transactions for a mowing and landscaping company will be used to illustrate the accrual basis of accounting/matching concept and the cash basis of accounting.
January xxxx Billed $30,000 To Customers For Services Performed & Completed In January XXXX
January xxxx Received Payments From Customers of $15,000
January xxxx Billed $12,000 by Outside Contractors For Services Performed & Completed In January XXXX
January xxxx Paid Outside Contractors $8,000
February xxxx Received Payments From Customers of $15,000
February xxxx Paid Outside Contractors $4,000
Accounting Methods
Another decision faced by a new business is what accounting/bookkeeping method is going to be used to track revenues and expenses. An accounting method is just a set of rules used to determine when and how income and expenses are reported.
If inventories are a major part of a business, the decision is made for the business owner by the Internal Revenue Service (IRS). Some business will be required to use the accrual method of accounting while others may be granted an exception and allowed to use the cash basis along with some special rules.
You're more than likely to encounter both the term method and basis used when this topic is discussed. In some cases you'll see the term cash method used and other cases see the term cash basis used. Likewise you'll see the term accrual method used and the term accrual basis used. They both refer to the same concept and are used interchangeably.
* Cash Method
The cash method or basis of accounting recognizes revenues (earnings) in the period the cash is received and expenses in the period when the cash payments are made. Actually, two types of cash methods (basis) of accounting exist:
o strict cash method (basis)
o modified cash method (basis)
A strict cash method follows the cash flow exactly. A modified cash method includes some elements from the accrual method of accounting and provides special methods for handling items such as inventory and cost of goods sold, payroll tax expenses and liabilities, and recording and depreciating property and equipment.
Many small businesses, whether they know it or not, are actually using a modified cash method.
By concentrating on recording revenues and expenses, the purpose of the cash or modified cash method of accounting is on determining the net income or loss for a period based on the cash received and the cash spent.
Information, such as the amounts billed to customers for products and/or services and not paid, and the amounts billed by suppliers for their products and/or services and not paid is not normally recorded and maintained in the "books" using the cash method.
Many small businesses start out using the cash basis rather than the accrual basis of accounting.
Use of the cash basis generally is not considered to be in conformity with generally accepted accounting principles (GAAP). Is this necessarily bad ? No, if no need is foreseen for what are called audited financial statements there's no need for concern. In most cases, audited statements are only required for the "big boys" (companies whose ownership interests are publicly traded). The "little guys" like the ma and pa shops don't need to worry. Still, when possible, a business should strongly consider using the accrual method of accounting.
* Accrual Method
The accrual method or basis of accounting records income in the period earned and records expenses and capital expenditures such as buildings, land, equipment, and vehicles in the period incurred.
The purpose of the accrual method of accounting is to properly match income and expenses in the correct period.
In order to accomplish this, the accrual method of accounting records revenue as earned when the product and/or service is shipped or rendered and invoiced (billed) to customers. Likewise, expenses and capital expenditures are recorded as incurred when the product and or service is shipped or rendered and invoiced (billed) by the supplier.
Information, such as the amounts billed to customers for products and/or services and not paid, and the amounts billed by suppliers for their products and/or services and not paid is recorded and maintained in the "books" using the accrual method. This is the accounting method that is required to be used in order to conform to generally accepted accounting principles (GAAP) in preparing financial statements for external users.
Difference Between The Two Methods
The difference between the two methods used for recording revenues and expenses results from when the business transaction is recorded in the "books" (timing). A business using the accrual method will record revenues and expenses in their "books" before a business using the cash method. In other words, unlike the cash method, they don't wait until they get paid by the customer or wait until they pay a supplier to record the transaction.
Comment: I've heard that "forewarned is fore armed" so here goes. Cash Flow and Profits are two different "animals". Due to the timing difference as to when revenue and expenses are recorded and when the cash resulting from the revenue and expenses is actually received or paid out , a business using the accrual method of accounting and reporting a "hefty" profit does not necessarily mean that they have the cash to pay their bills.
Even though the accrual method provides a better measure of profit and loss, many small businesses still use the cash basis of accounting. I think with the advent of easier to use computer accounting and bookkeeping software, we'll see more businesses adopting the accrual basis of accounting.
Relationship Between the Type of Bookkeeping System Used and the Accounting Method Used
What if any is the relationship between the type of bookkeeping system used and the method of accounting ?
The Single Entry bookkeeping system is used along with the Cash Method of accounting.
Debits and Credits are not used to record financial events.
The Double Entry bookkeeping system can be used with both the Cash and Accrual methods of accounting.
Debits and Credits are used to record financial events.
So You Know
You can use a different accounting method, the cash method or the accrual method, for each business that you set up.
Also, you can keep two sets of books, one on the cash basis and the other on the accrual basis, for the same business. You do; however, have to select one of the methods for tax purposes and continue to use it in the future. This is perfectly legal. It's when you keep two sets of books to hide your true earnings when the trouble begins.
Accounting and Bookkeeping Software
Let's muddy the water about the single and double entry accounting method at least as to how it relates to using bookkeeping and accounting software.
Single or Double Entry ?
Accounting and bookkeeping software programs actually allow the user to make a single (one) entry and the software handles creating the debit and credit entries "behind the scenes". The double-entry system is still there, but it's hidden from the user. The one exception is the general journal where the user does enter debits and credits.
Let's look at a sample transaction of invoicing (billing) a customer to illustrate what I'm talking about.. An invoice to a customer is created and printed and the resulting transaction is automatically recorded in the "books" as an increase to the amounts owed by customers and an increase to revenues (sales) using debits and credits.
Wow, since it's automatic, does that mean we don't need to learn about debits and credits later ? Only in your dreams. Although an airplane can be flown on auto-pilot, would you want to be on that plane without a trained pilot ? The same applies to using accounting and bookkeeping software. You need a properly trained bookkeeper or accountant that is also familiar with the software product in order to properly use the software. That ole saying "GIGO" (Garbage In - Garbage Out) definitely applies here.
Let's also muddy the water regarding the cash method and accrual method of accounting.
Some accounting software allows you to convert data back and forth between a cash basis and accrual basis of accounting. As I stated earlier, you do have to select one of the methods for tax purposes and continue to use it in the future.
If inventories are a major part of a business, the decision is made for the business owner by the Internal Revenue Service (IRS). Some business will be required to use the accrual method of accounting while others may be granted an exception and allowed to use the cash basis along with some special rules.
You're more than likely to encounter both the term method and basis used when this topic is discussed. In some cases you'll see the term cash method used and other cases see the term cash basis used. Likewise you'll see the term accrual method used and the term accrual basis used. They both refer to the same concept and are used interchangeably.
* Cash Method
The cash method or basis of accounting recognizes revenues (earnings) in the period the cash is received and expenses in the period when the cash payments are made. Actually, two types of cash methods (basis) of accounting exist:
o strict cash method (basis)
o modified cash method (basis)
A strict cash method follows the cash flow exactly. A modified cash method includes some elements from the accrual method of accounting and provides special methods for handling items such as inventory and cost of goods sold, payroll tax expenses and liabilities, and recording and depreciating property and equipment.
Many small businesses, whether they know it or not, are actually using a modified cash method.
By concentrating on recording revenues and expenses, the purpose of the cash or modified cash method of accounting is on determining the net income or loss for a period based on the cash received and the cash spent.
Information, such as the amounts billed to customers for products and/or services and not paid, and the amounts billed by suppliers for their products and/or services and not paid is not normally recorded and maintained in the "books" using the cash method.
Many small businesses start out using the cash basis rather than the accrual basis of accounting.
Use of the cash basis generally is not considered to be in conformity with generally accepted accounting principles (GAAP). Is this necessarily bad ? No, if no need is foreseen for what are called audited financial statements there's no need for concern. In most cases, audited statements are only required for the "big boys" (companies whose ownership interests are publicly traded). The "little guys" like the ma and pa shops don't need to worry. Still, when possible, a business should strongly consider using the accrual method of accounting.
* Accrual Method
The accrual method or basis of accounting records income in the period earned and records expenses and capital expenditures such as buildings, land, equipment, and vehicles in the period incurred.
The purpose of the accrual method of accounting is to properly match income and expenses in the correct period.
In order to accomplish this, the accrual method of accounting records revenue as earned when the product and/or service is shipped or rendered and invoiced (billed) to customers. Likewise, expenses and capital expenditures are recorded as incurred when the product and or service is shipped or rendered and invoiced (billed) by the supplier.
Information, such as the amounts billed to customers for products and/or services and not paid, and the amounts billed by suppliers for their products and/or services and not paid is recorded and maintained in the "books" using the accrual method. This is the accounting method that is required to be used in order to conform to generally accepted accounting principles (GAAP) in preparing financial statements for external users.
Difference Between The Two Methods
The difference between the two methods used for recording revenues and expenses results from when the business transaction is recorded in the "books" (timing). A business using the accrual method will record revenues and expenses in their "books" before a business using the cash method. In other words, unlike the cash method, they don't wait until they get paid by the customer or wait until they pay a supplier to record the transaction.
Comment: I've heard that "forewarned is fore armed" so here goes. Cash Flow and Profits are two different "animals". Due to the timing difference as to when revenue and expenses are recorded and when the cash resulting from the revenue and expenses is actually received or paid out , a business using the accrual method of accounting and reporting a "hefty" profit does not necessarily mean that they have the cash to pay their bills.
Even though the accrual method provides a better measure of profit and loss, many small businesses still use the cash basis of accounting. I think with the advent of easier to use computer accounting and bookkeeping software, we'll see more businesses adopting the accrual basis of accounting.
Relationship Between the Type of Bookkeeping System Used and the Accounting Method Used
What if any is the relationship between the type of bookkeeping system used and the method of accounting ?
The Single Entry bookkeeping system is used along with the Cash Method of accounting.
Debits and Credits are not used to record financial events.
The Double Entry bookkeeping system can be used with both the Cash and Accrual methods of accounting.
Debits and Credits are used to record financial events.
So You Know
You can use a different accounting method, the cash method or the accrual method, for each business that you set up.
Also, you can keep two sets of books, one on the cash basis and the other on the accrual basis, for the same business. You do; however, have to select one of the methods for tax purposes and continue to use it in the future. This is perfectly legal. It's when you keep two sets of books to hide your true earnings when the trouble begins.
Accounting and Bookkeeping Software
Let's muddy the water about the single and double entry accounting method at least as to how it relates to using bookkeeping and accounting software.
Single or Double Entry ?
Accounting and bookkeeping software programs actually allow the user to make a single (one) entry and the software handles creating the debit and credit entries "behind the scenes". The double-entry system is still there, but it's hidden from the user. The one exception is the general journal where the user does enter debits and credits.
Let's look at a sample transaction of invoicing (billing) a customer to illustrate what I'm talking about.. An invoice to a customer is created and printed and the resulting transaction is automatically recorded in the "books" as an increase to the amounts owed by customers and an increase to revenues (sales) using debits and credits.
Wow, since it's automatic, does that mean we don't need to learn about debits and credits later ? Only in your dreams. Although an airplane can be flown on auto-pilot, would you want to be on that plane without a trained pilot ? The same applies to using accounting and bookkeeping software. You need a properly trained bookkeeper or accountant that is also familiar with the software product in order to properly use the software. That ole saying "GIGO" (Garbage In - Garbage Out) definitely applies here.
Let's also muddy the water regarding the cash method and accrual method of accounting.
Some accounting software allows you to convert data back and forth between a cash basis and accrual basis of accounting. As I stated earlier, you do have to select one of the methods for tax purposes and continue to use it in the future.
Bookkeeping
Hello my name is Dave and yes I'm a bean counter. No I didn't say alcoholic, that's a soft drink not a beer in my hand, and this is not a meeting of Alcoholics Anonymous. For those of you that don't know a bean counter is slang sometimes used to refer to a bookkeeper. I've searched the web for good free bookkeeping and accounting tutorials and came to the conclusion that they're hard to find so this is my attempt to try and fill the void. What qualifies me to attempt this task ? I guess you can tell it's not my fancy dress code. I have over 30 years experience in business and even taught at a small business college for a couple of years. My method of passing on knowledge is to make the subject easy to understand and to use simple examples and terminology to illustrate the concepts being presented. If you're anything like me I learn a lot easier when I can see an example of what we're talking about. Tell me and show me too.
This free bookkeeping tutorial is geared to business owners, managers, and individuals who have not had any formal bookkeeping training or on the job experience and need or want to learn the basics of bookkeeping. In other words, this tutorial is for beginners (newbies) or those needing a quick refresher and is only an introduction into the world of accounting. They say a little knowledge is a dangerous thing. Well my goal is to make you dangerous.
Tutorial Navigation
A menu of all the lessons is presented at the top and bottom of all the lessons. A back and next arrow also allow you to go back to the prior lesson or on to the next lesson. In addition, some Lessons contain Interactive Tables, Forms, and Lists. These sections include Navigation Instructions. The Lessons also include Links to additional learning materials and quizzes.
# Additional Needs My bookkeeping and accounting quizzes and games require Adobe's Free Macromedia Flash Player which is normally already installed on your computer.
Get Adobe's Free Flash Player.
# My Skill Tests require Javascript to be enabled in your browser. Most computers also already have this feature enabled.
What's Covered ?
This Introduction discusses the types of business organizations, types of business activities, users of financial information, bookkeeping systems, accounting rules, and the cash and accrual basis of accounting.
Lesson 1 The Bookkeeping Language introduces you to some of the terminology and definitions used in the accounting and bookkeeping language.
Lesson 2 Property and Property Rights explains Property & Property Rights, the Accounting Equation, double entry bookkeeping, and how business transactions affect the equation.
Lesson 3 Debits and Credits introduces and explains Debits and Credits and how they affect the Accounting Equation and are used to record business transactions.
Lesson 4 Recording Business Transactions explains and uses examples to illustrate how business transactions are properly analyzed, recorded, and summarized.
Lesson 5 The General Ledger and Journals explains what General Ledger and Journals are, how they're used, and what bookkeeping purposes they serve.
Lesson 6 Financial Statements explains what financial statements are, how they're created, and how they're used.
Lesson 7 Review of Major Concepts reviews the major definitions, concepts, and bookkeeping records previously discussed and necessary for an understanding of bookkeeping.
Introduction
Why Learn Bookkeeping ?
Why would you want to learn bookkeeping and keep up to date financial records anyway ? Can't you hire an accountant to come after the end of the year and get your check book and shoe box and do your taxes ? Sure you can ! And yes you will have adequately fulfilled your taxpayer obligations. But in order to run a business and know what, where, and when to take corrective actions requires business information. How do you get and where do you find this information ? You don't if you don't keep accurate and current records about your business financial activities (bookkeeping).
Users of Financial Information
Who needs financial information about a business besides the owner(s) ?
Users can be grouped into two broad categories namely internal users and external users. Internal users are the managers and the owners and employees who actually work for the business. External users include lenders and other creditors (suppliers), investors, customers, and governmental regulatory and taxing agencies.
Why do they need financial information ?
Users need this information to make knowledgeable decisions. Lenders and other creditors want to make sure that they will be paid back for the credit that they have extended to a business. Even lenders that offer alternatives to small business loans like credit card factoring, more commonly known as business cash advances, will need this information because they will base their funding decisions on your credit card receivables history. By analyzing financial information, they at least have something to base their lending or credit decision on. The days of the "friendly" banker are gone. You need to provide them with financial information as a basis for their loan decisions. A "good ole boy" handshake won't cut it now. Similarly, customers want to make sure that the business they're buying products or services from is going to be around and not be in such a poor financial position as to have to close its doors. Other users have their own reasons for using this financial information.
Since users require financial information to base their decisions on, let's determine what is required to fill this need.
Let's begin with a definition for accounting.
Accounting is the art of analyzing, recording, summarizing, reporting, reviewing, and interpreting financial information.
Let's also define what bookkeeping is and is not. I hate to admit this but I'm going to tell a true story about myself in high school. I thought I was fairly smart back in my high school days and took all the college prep classes. My high school offered bookkeeping classes but I had no clue as to what that course was about. I thought bookkeeping was a course on how to properly organize and stack the reading books in the proper place and shelves in the library using that Dewey decimal code. That is keeping the books isn't it ? Well kinda, but that's not the bookkeeping you're going to learn here. Bookkeeping is one of the components of accounting. Think of accounting as the mom and bookkeeping as one of her children.
Bookkeeping is the process of recording and classifying business financial transactions (activities). In simple language-maintaining the records of the financial activities of a business or an individual. Bookkeeping's objective is simply to record and summarize financial transactions into a usable form that provides financial information about a business or an individual.
Accountants normally plan and set up the accounting and bookkeeping system for a business and turn over the day to day record keeping to the owner or one of his/her employees. In this age of computers, more and more of the daily bookkeeping is being done using bookkeeping software and computers although some businesses still maintain manual records. Due to the reasonable cost of computers and software, I recommend an automated (computer) bookkeeping system. Visit my site for some recommended software. In order to illustrate and understand what is actually being recorded and summarized by a computer bookkeeping system (behind the scenes) my lessons will illustrate the manual method of recording a company's financial information.
This free bookkeeping tutorial is geared to business owners, managers, and individuals who have not had any formal bookkeeping training or on the job experience and need or want to learn the basics of bookkeeping. In other words, this tutorial is for beginners (newbies) or those needing a quick refresher and is only an introduction into the world of accounting. They say a little knowledge is a dangerous thing. Well my goal is to make you dangerous.
Tutorial Navigation
A menu of all the lessons is presented at the top and bottom of all the lessons. A back and next arrow also allow you to go back to the prior lesson or on to the next lesson. In addition, some Lessons contain Interactive Tables, Forms, and Lists. These sections include Navigation Instructions. The Lessons also include Links to additional learning materials and quizzes.
# Additional Needs My bookkeeping and accounting quizzes and games require Adobe's Free Macromedia Flash Player which is normally already installed on your computer.
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What's Covered ?
This Introduction discusses the types of business organizations, types of business activities, users of financial information, bookkeeping systems, accounting rules, and the cash and accrual basis of accounting.
Lesson 1 The Bookkeeping Language introduces you to some of the terminology and definitions used in the accounting and bookkeeping language.
Lesson 2 Property and Property Rights explains Property & Property Rights, the Accounting Equation, double entry bookkeeping, and how business transactions affect the equation.
Lesson 3 Debits and Credits introduces and explains Debits and Credits and how they affect the Accounting Equation and are used to record business transactions.
Lesson 4 Recording Business Transactions explains and uses examples to illustrate how business transactions are properly analyzed, recorded, and summarized.
Lesson 5 The General Ledger and Journals explains what General Ledger and Journals are, how they're used, and what bookkeeping purposes they serve.
Lesson 6 Financial Statements explains what financial statements are, how they're created, and how they're used.
Lesson 7 Review of Major Concepts reviews the major definitions, concepts, and bookkeeping records previously discussed and necessary for an understanding of bookkeeping.
Introduction
Why Learn Bookkeeping ?
Why would you want to learn bookkeeping and keep up to date financial records anyway ? Can't you hire an accountant to come after the end of the year and get your check book and shoe box and do your taxes ? Sure you can ! And yes you will have adequately fulfilled your taxpayer obligations. But in order to run a business and know what, where, and when to take corrective actions requires business information. How do you get and where do you find this information ? You don't if you don't keep accurate and current records about your business financial activities (bookkeeping).
Users of Financial Information
Who needs financial information about a business besides the owner(s) ?
Users can be grouped into two broad categories namely internal users and external users. Internal users are the managers and the owners and employees who actually work for the business. External users include lenders and other creditors (suppliers), investors, customers, and governmental regulatory and taxing agencies.
Why do they need financial information ?
Users need this information to make knowledgeable decisions. Lenders and other creditors want to make sure that they will be paid back for the credit that they have extended to a business. Even lenders that offer alternatives to small business loans like credit card factoring, more commonly known as business cash advances, will need this information because they will base their funding decisions on your credit card receivables history. By analyzing financial information, they at least have something to base their lending or credit decision on. The days of the "friendly" banker are gone. You need to provide them with financial information as a basis for their loan decisions. A "good ole boy" handshake won't cut it now. Similarly, customers want to make sure that the business they're buying products or services from is going to be around and not be in such a poor financial position as to have to close its doors. Other users have their own reasons for using this financial information.
Since users require financial information to base their decisions on, let's determine what is required to fill this need.
Let's begin with a definition for accounting.
Accounting is the art of analyzing, recording, summarizing, reporting, reviewing, and interpreting financial information.
Let's also define what bookkeeping is and is not. I hate to admit this but I'm going to tell a true story about myself in high school. I thought I was fairly smart back in my high school days and took all the college prep classes. My high school offered bookkeeping classes but I had no clue as to what that course was about. I thought bookkeeping was a course on how to properly organize and stack the reading books in the proper place and shelves in the library using that Dewey decimal code. That is keeping the books isn't it ? Well kinda, but that's not the bookkeeping you're going to learn here. Bookkeeping is one of the components of accounting. Think of accounting as the mom and bookkeeping as one of her children.
Bookkeeping is the process of recording and classifying business financial transactions (activities). In simple language-maintaining the records of the financial activities of a business or an individual. Bookkeeping's objective is simply to record and summarize financial transactions into a usable form that provides financial information about a business or an individual.
Accountants normally plan and set up the accounting and bookkeeping system for a business and turn over the day to day record keeping to the owner or one of his/her employees. In this age of computers, more and more of the daily bookkeeping is being done using bookkeeping software and computers although some businesses still maintain manual records. Due to the reasonable cost of computers and software, I recommend an automated (computer) bookkeeping system. Visit my site for some recommended software. In order to illustrate and understand what is actually being recorded and summarized by a computer bookkeeping system (behind the scenes) my lessons will illustrate the manual method of recording a company's financial information.
Learn the Fundamentals of Accounting
Understanding the basics of accounting can make the difference between success and failure in so many different areas of life. Financial reports, balance sheets, reconciling bank statements--and the ability to create, interpret and implement them--are all tools we can't afford to ignore.
roll today! This is a self-paced, online course. You have 6 months to finish. An instructor will monitor your progress and assess your body of work at course completion.
http://www.universalclass.com/i/crn/30302.htm
roll today! This is a self-paced, online course. You have 6 months to finish. An instructor will monitor your progress and assess your body of work at course completion.
http://www.universalclass.com/i/crn/30302.htm
WHAT IS ACCOUNTING?
Quite simply, accounting is a language: a language that provides information about the financial position of an organization. When you study accounting you are essentially learning this specialized language. By learning this language you can communicate and understand the financial operations of any and all types of organizations.
This is because the information required by most organizations is very similar and can be broken down into three main categories:
ACCOUNTING INTRODUCTION
Operating Information
This is the information that is needed on a day-to-day basis in order for the organization to conduct its business. Employees need to get paid, sales need to be tracked, the amounts owed to other organizations or individuals need to be tracked, the amount of money the organization has needs to be monitored, the amounts that customers owe the organization need to be checked, any inventory needs to be accounted for: the list goes on and on. Operating information is what constitutes the greatest amount of accounting information and it provides the basis for the other two types of accounting information.
Financial Accounting Information
This is the information that is used by managers, shareholders, banks, creditors, the government, the public, etc… to make decisions involving the organization and its operations. Shareholders want information about what their investment is worth and whether they should buy or sell shares, bankers and other creditors want to know whether the organization has an ability to pay back money lent, managers want to know how the company is doing compared to other companies. This type of information would be very difficult to extract if every company used a different system for recording their financial position. Financial accounting information is subject to a set of ground rules that dictate how the information is reported and this ensures uniformity.
Managerial Accounting Information
In order for the managers of a company to make the best decisions for a company they need to have specific information prepared. They use this information for three main management functions: planning, implementation and control. Financial information is used to set budgets, analyze different options on a cost basis, modify plans as the need arises, and control and monitor the work that is being done.
As you can see, accounting is a multifaceted system involving different people with different needs and after analyzing the various uses and applications of accounting information the American Accounting Association has come up with this definition: “the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by users of the information.”
In order to facilitate the informed use of this financial information, accounting has come to be based on specified rules or conventions called “principles.” These principles provide general laws or rules that are used to guide accounting activity and are called Generally Accepted Accounting Principles, or GAAP for short. These principles are established by the Financial Accounting Standards Board (FASB) which is a nongovernmental agency funded by the accounting profession and contributions from business organizations. While there is no legal obligation for companies to adhere to GAAP, there are strong practical reasons to do so. From auditing to reporting earning to the US Securities Exchange Commission to applying for a loan, there are very compelling reasons for organizations to conform to the generally accepted standard.
What Is The End Result Of All This Accounting Information? We’ve talked about the reason for maintaining accounting information and the end result of all of this recording is the preparation of financial statements. These statements let people see, at a glance, the financial position of an organization. These statements provide summaries of the operating information and are used extensively by people within and external to the company. The statements fall into one of two categories:
*
Status/Stock – these statements show the financial status of an organization at one specified instant in time. Stock reports = a snapshot.
*
Flow Report – these statements show the flow of financial information over a period of time. Flow reports = motion picture
GAAP requires the preparation of three different statements:
Balance Sheet
A Balance Sheet is a status report that shows information about the organization’s resources at one given time. Examples of information found on a balance sheet are how much cash is in the bank, what is owed to creditors, and the value of the company’s assets.
Income Statement
An Income Statement (also called a Statement of Earnings, Statement of Operations, or a Profit and Loss Statement) is a report that shows the flow of revenues (amounts earned from business activity) and expenses (amounts paid in the course of operations) over a given period of time, typically a month, quarter, or year.
Statement of Cash Flow
As the name suggests, this is also a flow statement that details the movement of cash through the organization over a specified period.
The whole purpose of accounting is to provide information that is useful and relevant for interested parities when making decisions regarding the company and its operations. In order to do that effectively, a specific language and subsequent rules have been developed for users of the information. By learning accounting you learn these rules and can then communicate financial information with others in a comprehensible and comparable manner.
This is because the information required by most organizations is very similar and can be broken down into three main categories:
ACCOUNTING INTRODUCTION
Operating Information
This is the information that is needed on a day-to-day basis in order for the organization to conduct its business. Employees need to get paid, sales need to be tracked, the amounts owed to other organizations or individuals need to be tracked, the amount of money the organization has needs to be monitored, the amounts that customers owe the organization need to be checked, any inventory needs to be accounted for: the list goes on and on. Operating information is what constitutes the greatest amount of accounting information and it provides the basis for the other two types of accounting information.
Financial Accounting Information
This is the information that is used by managers, shareholders, banks, creditors, the government, the public, etc… to make decisions involving the organization and its operations. Shareholders want information about what their investment is worth and whether they should buy or sell shares, bankers and other creditors want to know whether the organization has an ability to pay back money lent, managers want to know how the company is doing compared to other companies. This type of information would be very difficult to extract if every company used a different system for recording their financial position. Financial accounting information is subject to a set of ground rules that dictate how the information is reported and this ensures uniformity.
Managerial Accounting Information
In order for the managers of a company to make the best decisions for a company they need to have specific information prepared. They use this information for three main management functions: planning, implementation and control. Financial information is used to set budgets, analyze different options on a cost basis, modify plans as the need arises, and control and monitor the work that is being done.
As you can see, accounting is a multifaceted system involving different people with different needs and after analyzing the various uses and applications of accounting information the American Accounting Association has come up with this definition: “the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions by users of the information.”
In order to facilitate the informed use of this financial information, accounting has come to be based on specified rules or conventions called “principles.” These principles provide general laws or rules that are used to guide accounting activity and are called Generally Accepted Accounting Principles, or GAAP for short. These principles are established by the Financial Accounting Standards Board (FASB) which is a nongovernmental agency funded by the accounting profession and contributions from business organizations. While there is no legal obligation for companies to adhere to GAAP, there are strong practical reasons to do so. From auditing to reporting earning to the US Securities Exchange Commission to applying for a loan, there are very compelling reasons for organizations to conform to the generally accepted standard.
What Is The End Result Of All This Accounting Information? We’ve talked about the reason for maintaining accounting information and the end result of all of this recording is the preparation of financial statements. These statements let people see, at a glance, the financial position of an organization. These statements provide summaries of the operating information and are used extensively by people within and external to the company. The statements fall into one of two categories:
*
Status/Stock – these statements show the financial status of an organization at one specified instant in time. Stock reports = a snapshot.
*
Flow Report – these statements show the flow of financial information over a period of time. Flow reports = motion picture
GAAP requires the preparation of three different statements:
Balance Sheet
A Balance Sheet is a status report that shows information about the organization’s resources at one given time. Examples of information found on a balance sheet are how much cash is in the bank, what is owed to creditors, and the value of the company’s assets.
Income Statement
An Income Statement (also called a Statement of Earnings, Statement of Operations, or a Profit and Loss Statement) is a report that shows the flow of revenues (amounts earned from business activity) and expenses (amounts paid in the course of operations) over a given period of time, typically a month, quarter, or year.
Statement of Cash Flow
As the name suggests, this is also a flow statement that details the movement of cash through the organization over a specified period.
The whole purpose of accounting is to provide information that is useful and relevant for interested parities when making decisions regarding the company and its operations. In order to do that effectively, a specific language and subsequent rules have been developed for users of the information. By learning accounting you learn these rules and can then communicate financial information with others in a comprehensible and comparable manner.
Columbia Southern University
When there isn't enough of you to go around, yet you understand the importance of earning your degree...
Columbia Southern University is your Answer
CSU's programs were designed for those of us who must juggle career and family, along with our own professional educational needs, without jeopardizing what we already have.
At CSU, you'll earn your degree while you earn a living. You will earn your degree on your schedule in the comfort of your home or office at times that are convenient to you, without sacrificing the main benefit of classroom instruction - the Professor.
Learn from the best
The select members of our faculty are not academicians steeped in theory alone. In addition to having earned their degrees from such prestigious universities as Duke University, the University of Notre Dame, Purdue, and Penn State, CSU's faculty are recognized leaders within their chosen professions and bring to our programs a wealth of "real world" experience that will prove beneficial to you as you progress through your studies here at CSU.
Worried about returning to school after all of these years?
Dont be. You will find yourself in good company. Few of our students are eighteen or twenty years old. Most are twenty-nine, or thirty-five, or forty-seven years old with two or three kids, and a dog and a cat just like you. But, just to put your mind at ease, the first course you will complete is CSUs Student Orientation that serves to ease you back into your studies.
Personalized Service
We are dedicated to the principle that it is only through your success that we succeed. You will find us readily accessible to answer questions or concerns you may have. We are only a phone call or email away.
Flexible
AT CSU there are no campus or scheduled online sessions to contend with. You complete your course work at times and places of your choosing. CSU provides the academic tools and support you'll need to successfully earn your degree.
Transfer Credits
CSU allows maximum transfer credit for academic. Up to 75% of undergraduate courses and 50% of graduate coursework can be transferred into your degree program at CSU - Saving you time and money.
Worried about library resources?
Don't be. You will find everything you need to complete assignments and more at CSU Online Library. Real-time reference assistance is provided 24/7 by professional librarians. Here you will find online tutorials, program resources, articles, government resources, etc that will prove valuable to you.
University & Learning Partners
Columbia Southern University is proud to be associated with the following Universities and Learning Partners: UWA, UNA, UWF and Delta Air Lines to name a few.
Would you benefit by earning a degree through Columbia Southern University? These CSU graduates did.
"I have already secured a new position since earning my Bachelor Degree that increased my salary by $15,000. Thanks CSU."
- James L. Cain
"Since receiving my bachelor's degree, I have accepted a position with a high-end military contractor, and received a 20% salary increase. Thank you, Columbia Southern University."
- Michael Scott
Open Enrollment
Start class when you are ready, with CSU's Per Course Enrollment. There are no predetermined semester or session dates you need to contend with. You may indicate a desired course start date up to two-weeks in advance (four-weeks allowed for APO) or you may choose to begin your course(s) as quickly as possible.
Accelerated Degree Program
You set the pace. With CSU’s per course enrollment system, students are given ten weeks to finish each course. However, students can complete courses in less time if they are able to do so. And you can choose to complete one course at a time, or complete several at the same time--students are entitled to choose w hat suits them best.
Columbia Southern University is your Answer
CSU's programs were designed for those of us who must juggle career and family, along with our own professional educational needs, without jeopardizing what we already have.
At CSU, you'll earn your degree while you earn a living. You will earn your degree on your schedule in the comfort of your home or office at times that are convenient to you, without sacrificing the main benefit of classroom instruction - the Professor.
Learn from the best
The select members of our faculty are not academicians steeped in theory alone. In addition to having earned their degrees from such prestigious universities as Duke University, the University of Notre Dame, Purdue, and Penn State, CSU's faculty are recognized leaders within their chosen professions and bring to our programs a wealth of "real world" experience that will prove beneficial to you as you progress through your studies here at CSU.
Worried about returning to school after all of these years?
Dont be. You will find yourself in good company. Few of our students are eighteen or twenty years old. Most are twenty-nine, or thirty-five, or forty-seven years old with two or three kids, and a dog and a cat just like you. But, just to put your mind at ease, the first course you will complete is CSUs Student Orientation that serves to ease you back into your studies.
Personalized Service
We are dedicated to the principle that it is only through your success that we succeed. You will find us readily accessible to answer questions or concerns you may have. We are only a phone call or email away.
Flexible
AT CSU there are no campus or scheduled online sessions to contend with. You complete your course work at times and places of your choosing. CSU provides the academic tools and support you'll need to successfully earn your degree.
Transfer Credits
CSU allows maximum transfer credit for academic. Up to 75% of undergraduate courses and 50% of graduate coursework can be transferred into your degree program at CSU - Saving you time and money.
Worried about library resources?
Don't be. You will find everything you need to complete assignments and more at CSU Online Library. Real-time reference assistance is provided 24/7 by professional librarians. Here you will find online tutorials, program resources, articles, government resources, etc that will prove valuable to you.
University & Learning Partners
Columbia Southern University is proud to be associated with the following Universities and Learning Partners: UWA, UNA, UWF and Delta Air Lines to name a few.
Would you benefit by earning a degree through Columbia Southern University? These CSU graduates did.
"I have already secured a new position since earning my Bachelor Degree that increased my salary by $15,000. Thanks CSU."
- James L. Cain
"Since receiving my bachelor's degree, I have accepted a position with a high-end military contractor, and received a 20% salary increase. Thank you, Columbia Southern University."
- Michael Scott
Open Enrollment
Start class when you are ready, with CSU's Per Course Enrollment. There are no predetermined semester or session dates you need to contend with. You may indicate a desired course start date up to two-weeks in advance (four-weeks allowed for APO) or you may choose to begin your course(s) as quickly as possible.
Accelerated Degree Program
You set the pace. With CSU’s per course enrollment system, students are given ten weeks to finish each course. However, students can complete courses in less time if they are able to do so. And you can choose to complete one course at a time, or complete several at the same time--students are entitled to choose w hat suits them best.
Independence University - Online
Advance your career on your own terms with accredited online degree programs from Independence University. We offer certificates, diplomas and associate, bachelor's and master's degrees in early childhood education, health education, and business. Build a successful career with rigorous distance learning programs tailored to your busy schedule. There's no need to quit your job and give up income in order to earn a respected degree.
For more than twenty-five years, Independence University has been offering high-quality, prestigious online degrees. IU is the first and only college to offer CAAHEP-accredited respiratory therapy programs at a distance. We offer more distance learning degrees and diplomas in health care than any other private, accredited institution.
A Quality Career Education
Independence University is accredited by the Accrediting Commission of the Distance Education and Training Council (DETC). The college is a recognized member of the Council for Higher Education Accreditation. Independence University is also endorsed by the National Academy of Opticianry (NAO).
These accreditations and endorsements ensure that our students enjoy the highest quality education. Our accreditation also enables students to receive federal financial aid and qualifies them to sit for state and national licensing exams.
The IU Advantage: Convenient Career Training
Your comprehensive, accredited distance education program includes:
* Books and resource materials developed by experts, sent directly to your home
* Student support and assistance when you need it
* Experienced faculty who work closely with you to ensure a lasting learning experience
* Distance learning that is as good as or even better than on-campus learning*
* A flexible, convenient solution for your career needs that doesn't disrupt your current professional or personal life
Earn the recognized credentials you need for licensure, promotion or a career change--or study for your own personal satisfaction. Whatever your goals are, Independence University can help.
*In a survey of managers of distance-learning graduates, over 90 percent believed the graduates compared favorably in skills, knowledge, and attitude to those with on-campus degrees.
For more than twenty-five years, Independence University has been offering high-quality, prestigious online degrees. IU is the first and only college to offer CAAHEP-accredited respiratory therapy programs at a distance. We offer more distance learning degrees and diplomas in health care than any other private, accredited institution.
A Quality Career Education
Independence University is accredited by the Accrediting Commission of the Distance Education and Training Council (DETC). The college is a recognized member of the Council for Higher Education Accreditation. Independence University is also endorsed by the National Academy of Opticianry (NAO).
These accreditations and endorsements ensure that our students enjoy the highest quality education. Our accreditation also enables students to receive federal financial aid and qualifies them to sit for state and national licensing exams.
The IU Advantage: Convenient Career Training
Your comprehensive, accredited distance education program includes:
* Books and resource materials developed by experts, sent directly to your home
* Student support and assistance when you need it
* Experienced faculty who work closely with you to ensure a lasting learning experience
* Distance learning that is as good as or even better than on-campus learning*
* A flexible, convenient solution for your career needs that doesn't disrupt your current professional or personal life
Earn the recognized credentials you need for licensure, promotion or a career change--or study for your own personal satisfaction. Whatever your goals are, Independence University can help.
*In a survey of managers of distance-learning graduates, over 90 percent believed the graduates compared favorably in skills, knowledge, and attitude to those with on-campus degrees.
Baker Online - Degree Programs Offered 100% Online
Baker Online - Degree Programs Offered 100% Online
arn your degree at home, on the road, or virtually anywhere in the world. Introducing a new way to earn a Doctorate, Master's degree, bachelor degree, associate degree, or certificate.
What is Baker Online? Simply the delivery of high quality, respected courses and programs through your home computer. By using the Internet to link faculty and students, you are able to pursue your degree more conveniently than ever before.
Convenience & Accessibility
Baker Online offers the convenience of classroom accessibility 24 hours a day, seven days a week, from virtually anywhere in the world. Because you do all your classroom work when it is convenient for you, your schedule is very flexible. You simply access your virtual classroom through the Web. Baker Online is not a self-paced program. Rather, courses begin and end on specific dates and classwork is assigned deadlines. If you have a busy schedule, Baker Online is the ideal way to earn your degree.
Baker College Is the largest private college in the state of Michigan and home to one of the largest online educational programs in the United States. Baker College Online is proud to serve over 40,000 students worldwide.
At Baker, we help people get 100% ready to enter exciting career fields in the shortest possible time...real growth careers in business, health and human services, and technology. Baker graduates are totally prepared to start working with no additional training needed.
Why is Baker your best choice for online education? Because we understand what you need to succeed! Our mission at Baker College is to provide you with quality education and training that will enable you to be successful throughout your career.
Baker College Online Is...
* Accredited. As an accredited university, we combine the highest academic standards with the flexibility and convenience of the Internet to provide you with an experience that is unmatched by our competition. Baker is accredited by the North Central Association of Colleges and Schools.
* Affordable. Have you thought that the tuition of online colleges was too expensive? It doesn't have to be! Tuition is only $190 per credit hour for undergraduate programs, $330 per credit hour for graduate level courses.
* Convenient. Unlike programs that require you to attend your online class on a specific day and time, our programs are entirely asynchronous. That means you can attend class from anywhere at any time.
* Flexible. Some colleges require students to take courses in a specific order, on specific dates with a specific group of people. Baker doesn't get that specific. Our Development Coordinators will help you work out a plan that fits your needs. And if you need to make changes along the way? No problem!
* Respected. We offer over 40 different degree programs that provide our students with practical experience and training. Our programs are continually updated to provide the skills and expertise that are in high demand, and our online graduate programs in business were ranked by US News as among the best!
arn your degree at home, on the road, or virtually anywhere in the world. Introducing a new way to earn a Doctorate, Master's degree, bachelor degree, associate degree, or certificate.
What is Baker Online? Simply the delivery of high quality, respected courses and programs through your home computer. By using the Internet to link faculty and students, you are able to pursue your degree more conveniently than ever before.
Convenience & Accessibility
Baker Online offers the convenience of classroom accessibility 24 hours a day, seven days a week, from virtually anywhere in the world. Because you do all your classroom work when it is convenient for you, your schedule is very flexible. You simply access your virtual classroom through the Web. Baker Online is not a self-paced program. Rather, courses begin and end on specific dates and classwork is assigned deadlines. If you have a busy schedule, Baker Online is the ideal way to earn your degree.
Baker College Is the largest private college in the state of Michigan and home to one of the largest online educational programs in the United States. Baker College Online is proud to serve over 40,000 students worldwide.
At Baker, we help people get 100% ready to enter exciting career fields in the shortest possible time...real growth careers in business, health and human services, and technology. Baker graduates are totally prepared to start working with no additional training needed.
Why is Baker your best choice for online education? Because we understand what you need to succeed! Our mission at Baker College is to provide you with quality education and training that will enable you to be successful throughout your career.
Baker College Online Is...
* Accredited. As an accredited university, we combine the highest academic standards with the flexibility and convenience of the Internet to provide you with an experience that is unmatched by our competition. Baker is accredited by the North Central Association of Colleges and Schools.
* Affordable. Have you thought that the tuition of online colleges was too expensive? It doesn't have to be! Tuition is only $190 per credit hour for undergraduate programs, $330 per credit hour for graduate level courses.
* Convenient. Unlike programs that require you to attend your online class on a specific day and time, our programs are entirely asynchronous. That means you can attend class from anywhere at any time.
* Flexible. Some colleges require students to take courses in a specific order, on specific dates with a specific group of people. Baker doesn't get that specific. Our Development Coordinators will help you work out a plan that fits your needs. And if you need to make changes along the way? No problem!
* Respected. We offer over 40 different degree programs that provide our students with practical experience and training. Our programs are continually updated to provide the skills and expertise that are in high demand, and our online graduate programs in business were ranked by US News as among the best!
Financial Accounting
Introduction
The purpose of accounting is to provide the information that is needed for sound economic decision making. The main purpose of financial accounting is to prepare financial reports that provide information about a firm's performance to external parties such as investors, creditors, and tax authorities. Managerial accounting contrasts with financial accounting in that managerial accounting is for internal decision making and does not have to follow any rules issued by standard-setting bodies. Financial accounting, on the other hand, is performed according to Generally Accepted Accounting Principles (GAAP) guidelines.
CPA's
The primary accounting professional association in the U.S. is the American Institute of Certified Public Accountants (AICPA). The AICPA prepares the Uniform CPA Examination, which must be completed in order to become a certified public accountant. To be eligible to become a CPA, one needs an undergraduate degree in any major with 150 credit hours of course work. Of these 150 credit hours, a minimum of 36 credit hours must be in accounting. Only about 10% of those taking the CPA exam pass it the first time.
Accounting Standards
In order that financial statements report financial performance fairly and consistently, they are prepared according to widely accepted accounting standards. These standards are referred to as Generally Accepted Accounting Principles, or simply GAAP. Generally Accepted Accounting Principles are those that have "substantial authoritative support".
Accrual vs. Cash Method
Many small businesses utilize an accounting system that recognizes revenue and expenses on a cash basis, meaning that neither revenue nor expenses are recognized until the cash associated with them actually is received. Most larger businesses, however, use the accrual method.
Under the accrual method, revenues and expenses are recorded according to when they are earned and incurred, not necessarily when the cash is received or paid. For example, under the accrual method revenue is recognized when customers are invoiced, regardless of when payment is received. Similarly, an expense is recognized when the bill is received, not when payment is made.
Under accrual accounting, even though employees may be paid in the next accounting period for work performed near the end of the present accounting period, the expense still is recorded in the current period since the current period is when the expense was incurred.
Underlying Assumptions, Principles, and Conventions
Financial accounting relies on the following underlying concepts:
*
Assumptions: Separate entity assumption, going-concern assumption, stable monetary unit assumption, fixed time period assumption.
*
Principles: Historical cost principle, matching principle, revenue recognition principle, full disclosure principle.
*
Modifying conventions: Materiality, cost-benefit, conservatism convention, industry practices convention.
Financial Statements
Businesses have two primary objectives:
* Earn a profit
* Remain solvent
Solvency represents the ability of the business to pay its bills and service its debt.
The four financial statements are reports that allow interested parties to evaluate the profitability and solvency of a business. These reports include the following financial statements:
* Balance Sheet
* Income Statement
* Statement of Owner's Equity
* Statement of Cash Flows
These four financial statements are the final product of the accountant's analysis of the transactions of a business. A large amount of effort goes into the preparation of the financial statements. The process begins with bookkeeping, which is just one step in the accounting process. Bookkeeping is the actual recording of the company's transactions, without any analysis of the information. Accountants evaluate and analyze the information, making sense out of the numbers.
For the reports to be useful, they must be:
* Understandable
* Timely
* Relevant
* Fair and Objective (free from bias)
Double Entry Accounting
Financial accounting is based on double-entry bookkeeping procedures in which each transaction is recorded in opposite columns of the accounts affected by the exchange. Double entry accounting is a significant improvement over simple and more error-prone single-entry bookkeeping systems.
Fundamental Accounting Model
The balance sheet is based on the following fundamental accounting equation :
Assets = Liabilities + Equity
This model has been used since the 18th century. It essentially states that a business owes all of its assets to either creditors or owners, where the assets of a business are its resources, and the creditors and owners are the sources of those resources.
Transactions
To record transactions, one must:
1.
Identify an event that affects the entity financially.
2.
Measure the event in monetary terms.
3.
Determine which accounts the transaction affects.
4.
Determine whether the transaction increases or decreases the balances in those accounts.
5.
Record the transaction in the ledgers.
Most larger business accounting systems utilize the double entry method. Under double entry, instead of recording a transaction in only a single account, the transaction is recorded in two accounts.
The Accounting Process
Once a business transaction occurs, a sequence of activities begins to identify and analyze the transaction, make the journal entries, etc. Because this process repeats over transactions and accounting periods, it is referred to as the accounting cycle.
The purpose of accounting is to provide the information that is needed for sound economic decision making. The main purpose of financial accounting is to prepare financial reports that provide information about a firm's performance to external parties such as investors, creditors, and tax authorities. Managerial accounting contrasts with financial accounting in that managerial accounting is for internal decision making and does not have to follow any rules issued by standard-setting bodies. Financial accounting, on the other hand, is performed according to Generally Accepted Accounting Principles (GAAP) guidelines.
CPA's
The primary accounting professional association in the U.S. is the American Institute of Certified Public Accountants (AICPA). The AICPA prepares the Uniform CPA Examination, which must be completed in order to become a certified public accountant. To be eligible to become a CPA, one needs an undergraduate degree in any major with 150 credit hours of course work. Of these 150 credit hours, a minimum of 36 credit hours must be in accounting. Only about 10% of those taking the CPA exam pass it the first time.
Accounting Standards
In order that financial statements report financial performance fairly and consistently, they are prepared according to widely accepted accounting standards. These standards are referred to as Generally Accepted Accounting Principles, or simply GAAP. Generally Accepted Accounting Principles are those that have "substantial authoritative support".
Accrual vs. Cash Method
Many small businesses utilize an accounting system that recognizes revenue and expenses on a cash basis, meaning that neither revenue nor expenses are recognized until the cash associated with them actually is received. Most larger businesses, however, use the accrual method.
Under the accrual method, revenues and expenses are recorded according to when they are earned and incurred, not necessarily when the cash is received or paid. For example, under the accrual method revenue is recognized when customers are invoiced, regardless of when payment is received. Similarly, an expense is recognized when the bill is received, not when payment is made.
Under accrual accounting, even though employees may be paid in the next accounting period for work performed near the end of the present accounting period, the expense still is recorded in the current period since the current period is when the expense was incurred.
Underlying Assumptions, Principles, and Conventions
Financial accounting relies on the following underlying concepts:
*
Assumptions: Separate entity assumption, going-concern assumption, stable monetary unit assumption, fixed time period assumption.
*
Principles: Historical cost principle, matching principle, revenue recognition principle, full disclosure principle.
*
Modifying conventions: Materiality, cost-benefit, conservatism convention, industry practices convention.
Financial Statements
Businesses have two primary objectives:
* Earn a profit
* Remain solvent
Solvency represents the ability of the business to pay its bills and service its debt.
The four financial statements are reports that allow interested parties to evaluate the profitability and solvency of a business. These reports include the following financial statements:
* Balance Sheet
* Income Statement
* Statement of Owner's Equity
* Statement of Cash Flows
These four financial statements are the final product of the accountant's analysis of the transactions of a business. A large amount of effort goes into the preparation of the financial statements. The process begins with bookkeeping, which is just one step in the accounting process. Bookkeeping is the actual recording of the company's transactions, without any analysis of the information. Accountants evaluate and analyze the information, making sense out of the numbers.
For the reports to be useful, they must be:
* Understandable
* Timely
* Relevant
* Fair and Objective (free from bias)
Double Entry Accounting
Financial accounting is based on double-entry bookkeeping procedures in which each transaction is recorded in opposite columns of the accounts affected by the exchange. Double entry accounting is a significant improvement over simple and more error-prone single-entry bookkeeping systems.
Fundamental Accounting Model
The balance sheet is based on the following fundamental accounting equation :
Assets = Liabilities + Equity
This model has been used since the 18th century. It essentially states that a business owes all of its assets to either creditors or owners, where the assets of a business are its resources, and the creditors and owners are the sources of those resources.
Transactions
To record transactions, one must:
1.
Identify an event that affects the entity financially.
2.
Measure the event in monetary terms.
3.
Determine which accounts the transaction affects.
4.
Determine whether the transaction increases or decreases the balances in those accounts.
5.
Record the transaction in the ledgers.
Most larger business accounting systems utilize the double entry method. Under double entry, instead of recording a transaction in only a single account, the transaction is recorded in two accounts.
The Accounting Process
Once a business transaction occurs, a sequence of activities begins to identify and analyze the transaction, make the journal entries, etc. Because this process repeats over transactions and accounting periods, it is referred to as the accounting cycle.
Accounting Reading Strategies
Reading is more important for some accounting courses, such as income taxes, than for others. The following tips enhance reading comprehension (M.B. Harms, CAL).
* SQ3R
* To use the SQ3R strategy, begin the assigned reading by surveying the title, introduction, section headings, and conclusion. Develop questions that may be answered in the reading. Then read one section at a time for content, reciting the main ideas of each section. After reading the chapter, review the content.
* Illustrations
* Be sure to carefully examine the illustrations that accompany the readings. What concepts are being illustrated? How do they relate to the text? Why are they significant?
* Margin Notes
* As each section of the chapter is read, record notes in the margins of the text, identifying the main points, key terms, supporting details, and examples. This is especially important in income tax accounting courses.
* Develop an Index
* If the book's index is inadequate for finding specific types of information, develop your own index listing the type of information (e.g. the key term, concept, formula, etc.) and the page number(s) on which the information is found.
Information Organization
Flash Cards
Flow Charts
Matrices
Outlines
Hierarchies
* SQ3R
* To use the SQ3R strategy, begin the assigned reading by surveying the title, introduction, section headings, and conclusion. Develop questions that may be answered in the reading. Then read one section at a time for content, reciting the main ideas of each section. After reading the chapter, review the content.
* Illustrations
* Be sure to carefully examine the illustrations that accompany the readings. What concepts are being illustrated? How do they relate to the text? Why are they significant?
* Margin Notes
* As each section of the chapter is read, record notes in the margins of the text, identifying the main points, key terms, supporting details, and examples. This is especially important in income tax accounting courses.
* Develop an Index
* If the book's index is inadequate for finding specific types of information, develop your own index listing the type of information (e.g. the key term, concept, formula, etc.) and the page number(s) on which the information is found.
Information Organization
Flash Cards
Flow Charts
Matrices
Outlines
Hierarchies
A GUIDE FOR STUDENTS STUDYING ACCOUNTING
A GUIDE FOR STUDENTS STUDYING ACCOUNTING
The following study guide is a series of rules and suggestions
which, if followed, will help you achieve the maximum results for
your study efforts. Although there is no substitute for HARD
WORK and a DESIRE TO LEARN, most of you can use your study time
and classroom time more efficiently.
READING THE TEXTBOOK
-------------------
1. Studying accounting is not like reading a novel or even like
-----------------------------------------------------------
studying history, sociology, or economics.
-----------------------------------------
a. Each assignment in accounting BUILDS on previous
assignments. If you do half-hearted work in Chapter 1 and 2, you
may be confused by Chapter 3 and lost by Chapter 4.
b. Accounting books are condensed. Almost every sentence is
important. Scan reading just does not work!
2. Read to understand "WHY."
------------------------
a. This is a technical subject, it is logical, and it
requires reasoning.
b. Strive to be able to say, "I understand why they do
that." If you can understand "WHY" in accounting, there is very
little to memorize.
c. Try to explain every new topic in your own words.
Putting the new ideas into your own words is better that reciting
the words of the text a hundred times.
3. Work problems to understand "HOW."
---------------------------------
a. Even though you understand "why they do that" in
accounting, you must be able to do it yourself. This is a
do-it-yourself course.
b. To be sure that you understand "how" as well as "why,"
work the problems that are shown with the reading material.
Don't copy the book. Try your own skill and then check your
answers.
4. Remember "why"and "how.
----------------------
a. Go back to previous chapters and notes to refresh your
memory. Rework problems that were difficult for you. Try to
work extra problems that are similar to the assigned homework.
b. Never wait until examination time to review your
accounting.
The REVIEW-AS-YOU-GO plan produces better results, doesn't
take as long, and saves all that last minute worry and sacrifice
of other courses. The forgetting curve is the mirror image of
the learning curve. You forget as fast as you learn
It is a scientific fact that information that has been
forgotten requires that it be relearned, requiring the same time
it took to learn it the first time.
5. If there is something you do not understand, prepare
specific questions to ask your instructor. Some students keep a
notebook of points with which they have questions. PIN-POINT THE
ITEMS THAT YOU DO NOT UNDERSTAND. Don't make vague comments to
your instructor such as "I don't understand any of this
material." Such statements are a strong indication to the
instructor that you have made no attempt to try to understand,
and will receive very little sympathy or help.
WORKING HOMEWORK PROBLEMS
-------------------------
1. READ THE PROBLEM! Read the instructions and scan the
problem to see what is ahead.
2. Work the problems without "PAGE FLIPPING" back to the
chapter.
a. When in doubt, look back at the chapter -- but NOT until
you have tried to do the problem on your won. This indicates
that you do not remember the chapter material. You are not
prepared for an examination.
b. The "PAGE-PLIPPING" method is guaranteed to waste a
maximum of your time and to produce a minimum of results.
3. Keep up with the class! IT IS EASIER TO KEEP UP THAN TO
CATCH UP!!
A. Check your problem against the solution presented in
class.
b. Be sure that you understand the correct solution.
4. Note the part of the problem with which you have difficulty
and ask questions during the classroom session.
MAKE BEST USE OF CLASS TIME
---------------------------
1. Classes are never interesting unless you TAKE PART.
2. ALWAYS BE PREPARED before you go to class.
3. DO NOT BE AFRAID TO ASK QUESTIONS. If you have a question,
at least ten other students probably have the same question but
are afraid to ask because it might sound like a dumb question.
4. Students who make FAILING GRADES also fail to attend
classes, fail to pay attention during class, fail to have their
homework,and fail to ask the instructor for help until it is too
late. And when they do ask, it isn't for help. They go to the
instructor to offer poor excuses for poor performance which the
instructor has heard from other students over the years.
Remember, when you start your career after graduation, excuses
won't be a substitute for poor performance; nor will it earn you
a grade in this course.
PREPARING FOR EXAMS
-------------------
1. Be specific in your study; concentrate on the things which
seem to be most important.
a. Note items that the instructor emphasizes in class.
b. Note homework problems that are assigned.
2. Do not stop with just "getting the idea." Be sure that you
can work problems without the aid of the book. Practice by
teaching the material to someone else. Study groups of two or
three students work well for this purpose.
3. Every exam has an element of speed. Have your "hows" and
"whys" at your finger tips. If you are slow, you probably need
to study more.
4. The questions on exams approach the material from a slightly
different angle to test your ability to REASON AND UNDERSTAND
rather than your ability to memorize.
5. When taking exams, many points are lost and questions missed
because the student does not READ THE PROBLEM. This is
especially true with multiple choice questions. Read what the
question is really asking, not what you think or want it to
ask..AVOID CARELESS ERRORS. On each exam, assume that you have
made several careless errors and allow enough time at the end of
the exam to look for them.
6. An excellent strategy to use when taking an exam is to
quickly look through the entire exam and answer all of the
questions that are easy for you. Those are "sure" points and
help to relieve the pressure when you go back to work on the more
difficult and time-consuming problems.
7. The greatest weakness in a student's ability to take an exam
is to keep up a good STEADY PACE without the clock causing the
student to panic. Remember, when you panic by constantly
thinking about the time factor, the mind closes up on you and
that ends any chance you have to do well. It is better to
concentrate on answering only 80% of the questions and getting
them all correct than to answer all of the question and missing
half of them. Of course it is best to answer all of the questions
and get them all correct, which is only possible if you
concentrate, keep your composure, and maintain a steady pace.
END
The following study guide is a series of rules and suggestions
which, if followed, will help you achieve the maximum results for
your study efforts. Although there is no substitute for HARD
WORK and a DESIRE TO LEARN, most of you can use your study time
and classroom time more efficiently.
READING THE TEXTBOOK
-------------------
1. Studying accounting is not like reading a novel or even like
-----------------------------------------------------------
studying history, sociology, or economics.
-----------------------------------------
a. Each assignment in accounting BUILDS on previous
assignments. If you do half-hearted work in Chapter 1 and 2, you
may be confused by Chapter 3 and lost by Chapter 4.
b. Accounting books are condensed. Almost every sentence is
important. Scan reading just does not work!
2. Read to understand "WHY."
------------------------
a. This is a technical subject, it is logical, and it
requires reasoning.
b. Strive to be able to say, "I understand why they do
that." If you can understand "WHY" in accounting, there is very
little to memorize.
c. Try to explain every new topic in your own words.
Putting the new ideas into your own words is better that reciting
the words of the text a hundred times.
3. Work problems to understand "HOW."
---------------------------------
a. Even though you understand "why they do that" in
accounting, you must be able to do it yourself. This is a
do-it-yourself course.
b. To be sure that you understand "how" as well as "why,"
work the problems that are shown with the reading material.
Don't copy the book. Try your own skill and then check your
answers.
4. Remember "why"and "how.
----------------------
a. Go back to previous chapters and notes to refresh your
memory. Rework problems that were difficult for you. Try to
work extra problems that are similar to the assigned homework.
b. Never wait until examination time to review your
accounting.
The REVIEW-AS-YOU-GO plan produces better results, doesn't
take as long, and saves all that last minute worry and sacrifice
of other courses. The forgetting curve is the mirror image of
the learning curve. You forget as fast as you learn
It is a scientific fact that information that has been
forgotten requires that it be relearned, requiring the same time
it took to learn it the first time.
5. If there is something you do not understand, prepare
specific questions to ask your instructor. Some students keep a
notebook of points with which they have questions. PIN-POINT THE
ITEMS THAT YOU DO NOT UNDERSTAND. Don't make vague comments to
your instructor such as "I don't understand any of this
material." Such statements are a strong indication to the
instructor that you have made no attempt to try to understand,
and will receive very little sympathy or help.
WORKING HOMEWORK PROBLEMS
-------------------------
1. READ THE PROBLEM! Read the instructions and scan the
problem to see what is ahead.
2. Work the problems without "PAGE FLIPPING" back to the
chapter.
a. When in doubt, look back at the chapter -- but NOT until
you have tried to do the problem on your won. This indicates
that you do not remember the chapter material. You are not
prepared for an examination.
b. The "PAGE-PLIPPING" method is guaranteed to waste a
maximum of your time and to produce a minimum of results.
3. Keep up with the class! IT IS EASIER TO KEEP UP THAN TO
CATCH UP!!
A. Check your problem against the solution presented in
class.
b. Be sure that you understand the correct solution.
4. Note the part of the problem with which you have difficulty
and ask questions during the classroom session.
MAKE BEST USE OF CLASS TIME
---------------------------
1. Classes are never interesting unless you TAKE PART.
2. ALWAYS BE PREPARED before you go to class.
3. DO NOT BE AFRAID TO ASK QUESTIONS. If you have a question,
at least ten other students probably have the same question but
are afraid to ask because it might sound like a dumb question.
4. Students who make FAILING GRADES also fail to attend
classes, fail to pay attention during class, fail to have their
homework,and fail to ask the instructor for help until it is too
late. And when they do ask, it isn't for help. They go to the
instructor to offer poor excuses for poor performance which the
instructor has heard from other students over the years.
Remember, when you start your career after graduation, excuses
won't be a substitute for poor performance; nor will it earn you
a grade in this course.
PREPARING FOR EXAMS
-------------------
1. Be specific in your study; concentrate on the things which
seem to be most important.
a. Note items that the instructor emphasizes in class.
b. Note homework problems that are assigned.
2. Do not stop with just "getting the idea." Be sure that you
can work problems without the aid of the book. Practice by
teaching the material to someone else. Study groups of two or
three students work well for this purpose.
3. Every exam has an element of speed. Have your "hows" and
"whys" at your finger tips. If you are slow, you probably need
to study more.
4. The questions on exams approach the material from a slightly
different angle to test your ability to REASON AND UNDERSTAND
rather than your ability to memorize.
5. When taking exams, many points are lost and questions missed
because the student does not READ THE PROBLEM. This is
especially true with multiple choice questions. Read what the
question is really asking, not what you think or want it to
ask..AVOID CARELESS ERRORS. On each exam, assume that you have
made several careless errors and allow enough time at the end of
the exam to look for them.
6. An excellent strategy to use when taking an exam is to
quickly look through the entire exam and answer all of the
questions that are easy for you. Those are "sure" points and
help to relieve the pressure when you go back to work on the more
difficult and time-consuming problems.
7. The greatest weakness in a student's ability to take an exam
is to keep up a good STEADY PACE without the clock causing the
student to panic. Remember, when you panic by constantly
thinking about the time factor, the mind closes up on you and
that ends any chance you have to do well. It is better to
concentrate on answering only 80% of the questions and getting
them all correct than to answer all of the question and missing
half of them. Of course it is best to answer all of the questions
and get them all correct, which is only possible if you
concentrate, keep your composure, and maintain a steady pace.
END
Fifteen Tips for Studying Accounting
# The sequence is intentional. Keep in mind that the accounting course that you are taking is one in a sequence of courses. It has been placed where it is because that course’s material is derived from material from one or more earlier courses. Make sure that you have access to textbooks of your earlier courses. (If you’re a little bit inclined to take courses out of order, forget it!)
# The material within a given course is often sequential. This is especially true of Accounting I (ACCT-200). That is, the material covered early in the course is necessary to do problems covered later in the course. If you don’t understand the first few chapters of the textbook, you need to go back and study those chapters before going on to later ones.
# Determine the scope of the course. It’s not unusual for particular chapters or particular sections of chapters to be deleted from the scope of a course.
# Practice, practice, practice. There is tremendous value in going over as many problems as you can.
# You’re trying to learn as many points as you can. If you get stuck on a particular point, don’t spend a long time trying to look it up or figure it out. Make a note of it and ask a friend or the professor about it later.
# Novels are meant to be read from beginning to end. Accounting textbooks are not. Skim the text, use the index, jump around, read the questions at the end of the chapter, look at tables and charts, cross-reference things, and notice the section headings. You’re dealing with technical language: it’s not unusual to have to read a given paragraph several times before you understand it.
# We’re not in Kansas anymore. In a history class, if you know 90% of the information about each presidency, war, historical movement, etc., then you’ll probably be fine. In accounting, you often have to know how to finish the problem. This is especially true for multiple-choice exams. For this reason, it’s often better to completely understand some problems (and not know how to do other problems) than to have a somewhat vague notion of how to approach every type of problem. Also, having a strong understanding of one type of problem will sometimes give you a clue as to how to approach a seemingly unrelated problem that you never studied.
# Sorry to disappoint you, but accounting isn’t exactly like math. In math, the rules tend to be absolute. In accounting, many of the rules have exceptions and often the "final answer" (for example, a recommendation to a company) depends a great deal on the context of the problem.
# But wait, currency doesn’t come in negative denominations. Get in the habit of asking yourself if your final answer makes sense in the context of the problem.
# Find a partner. Spend part of your study time by yourself and part of your study time with someone else. A portion of the study time by yourself can be used to identify what things you understand and what things you don’t. You and your study partner can trade notes on this and teach each other. Studies have shown that by teaching others you ensure that you will recall the information later. The most important rule about working with someone else: keep to the task! Work hard to keep to the subject at hand. Interrupt your partner when he/she starts talking about unrelated topics.
# Learn the vocabulary. There is no quicker tip-off to the professor that you don’t know what you’re doing than using terminology inappropriately. (For example, the clueless student will typically sprinkle the term "money" liberally throughout an essay while accounting textbooks seldom use the term.) Most accounting textbooks have at least one glossary. Also, most textbooks put the key terms in boldface type. Do enough reading of the textbooks to understand how the author uses each important term.
# Don’t be fatalistic. Yes, accounting is difficult. Yes, accounting is hard work. Yes, it takes time. No, it’s not impossible. Most good students report having some breakthrough moments: times when suddenly a range of topics suddenly make sense. You might be closer than you think to having one of those breakthroughs.
# Develop a sense of curiosity. There are many rules in accounting which seem at first to be either contradictory or counterintuitive or both. Try to figure out why the rule exists and talk to other people about it. The really good students treat accounting as one big puzzle-game which they expect to win!
# Take some satisfaction in the fact that you’re doing something difficult. Even though accounting is a very marketable skill, that’s not the best reason to study it. The best reason to study accounting is that it helps develop your ability to do analytic thinking.
# Bad things happen. If nothing else motivates you to study, remind yourself that it’s very possible to get a "D" or an "F" in an accounting course. This worst-case scenario plays itself out for some students every semester. Use this fact as motivation when you are debating whether to study accounting or to go out for pizza.
# The material within a given course is often sequential. This is especially true of Accounting I (ACCT-200). That is, the material covered early in the course is necessary to do problems covered later in the course. If you don’t understand the first few chapters of the textbook, you need to go back and study those chapters before going on to later ones.
# Determine the scope of the course. It’s not unusual for particular chapters or particular sections of chapters to be deleted from the scope of a course.
# Practice, practice, practice. There is tremendous value in going over as many problems as you can.
# You’re trying to learn as many points as you can. If you get stuck on a particular point, don’t spend a long time trying to look it up or figure it out. Make a note of it and ask a friend or the professor about it later.
# Novels are meant to be read from beginning to end. Accounting textbooks are not. Skim the text, use the index, jump around, read the questions at the end of the chapter, look at tables and charts, cross-reference things, and notice the section headings. You’re dealing with technical language: it’s not unusual to have to read a given paragraph several times before you understand it.
# We’re not in Kansas anymore. In a history class, if you know 90% of the information about each presidency, war, historical movement, etc., then you’ll probably be fine. In accounting, you often have to know how to finish the problem. This is especially true for multiple-choice exams. For this reason, it’s often better to completely understand some problems (and not know how to do other problems) than to have a somewhat vague notion of how to approach every type of problem. Also, having a strong understanding of one type of problem will sometimes give you a clue as to how to approach a seemingly unrelated problem that you never studied.
# Sorry to disappoint you, but accounting isn’t exactly like math. In math, the rules tend to be absolute. In accounting, many of the rules have exceptions and often the "final answer" (for example, a recommendation to a company) depends a great deal on the context of the problem.
# But wait, currency doesn’t come in negative denominations. Get in the habit of asking yourself if your final answer makes sense in the context of the problem.
# Find a partner. Spend part of your study time by yourself and part of your study time with someone else. A portion of the study time by yourself can be used to identify what things you understand and what things you don’t. You and your study partner can trade notes on this and teach each other. Studies have shown that by teaching others you ensure that you will recall the information later. The most important rule about working with someone else: keep to the task! Work hard to keep to the subject at hand. Interrupt your partner when he/she starts talking about unrelated topics.
# Learn the vocabulary. There is no quicker tip-off to the professor that you don’t know what you’re doing than using terminology inappropriately. (For example, the clueless student will typically sprinkle the term "money" liberally throughout an essay while accounting textbooks seldom use the term.) Most accounting textbooks have at least one glossary. Also, most textbooks put the key terms in boldface type. Do enough reading of the textbooks to understand how the author uses each important term.
# Don’t be fatalistic. Yes, accounting is difficult. Yes, accounting is hard work. Yes, it takes time. No, it’s not impossible. Most good students report having some breakthrough moments: times when suddenly a range of topics suddenly make sense. You might be closer than you think to having one of those breakthroughs.
# Develop a sense of curiosity. There are many rules in accounting which seem at first to be either contradictory or counterintuitive or both. Try to figure out why the rule exists and talk to other people about it. The really good students treat accounting as one big puzzle-game which they expect to win!
# Take some satisfaction in the fact that you’re doing something difficult. Even though accounting is a very marketable skill, that’s not the best reason to study it. The best reason to study accounting is that it helps develop your ability to do analytic thinking.
# Bad things happen. If nothing else motivates you to study, remind yourself that it’s very possible to get a "D" or an "F" in an accounting course. This worst-case scenario plays itself out for some students every semester. Use this fact as motivation when you are debating whether to study accounting or to go out for pizza.
How to Succeed in Financial Accounting
Success Strategies for Financial Accounting, Accounting 215
The information below is designed to provide you with tips for the Accounting 215 course. Accounting is more like a math class than a history class. While understanding accounting vocabulary is necessary for you to understand lectures and problems, success in accounting comes from learning and applying the accounting process for the various topics you encounter in the class.
Try these suggestions and decide what works for you. The first four chapters are key to understanding the rest of the book, so it is important for you to develop good study habits at the beginning of the class.
I. Reading the Text
An accounting book cannot be read in the same way that you read other textbooks. Each phrase or sentence is important. Gain the most from your reading of the book by doing the following:
* Spend more time reading accounting material than you would reading other texts.
* Skim through the chapter noting the headings, then read the chapter straight through. Reread the material you do not understand.
* Read the material in smaller chunks – for no more than an hour at a time. Immediately try an exercise from the back of the chapter involving the material you have just read, or complete the self study quizzes embedded in the text.
* Take notes or underline key concepts from each section.
* Read the text before class discussion on that chapter. The class presentation will parallel but not duplicate the text.
* Put sticky notes on difficult topics for quick reference when you ask questions later.
* Make 3 x 5 index cards of key points or terminology. Carry the cards with you and review them when an opportunity arises.
* Carefully review figures and diagrams until you understand how the process or procedure should be done. If you can reconstruct and explain major figures and diagrams in the text, you will have a good grasp of the concept.
II. Lecture
Lectures are meant to clarify the more difficult concepts and draw the material together into a meaningful pattern. The class presentation will parallel but not duplicate the text.
* Organized notes serve as a reference for homework problems and exam preparation. For more note-taking tips, go back to the accounting main page to connect with the general study guide websites.
* Topics covered in the lecture are deemed important by your instructor. You have a high probability of seeing this material again!
* There is no such thing as a dumb question! Others in the class may not understand the topic. Resolving your questions keeps you from being stumped on a test or quiz, and helps to make the class more interesting for everyone.
* Copy all problems shown in class – even those problems that seem simple or that you already understand. You may forget them by the time you get to homework or exam preparation.
* Try not to miss a class. Borrow notes from another student if you miss a day.
* Bring the textbook and a calculator to class. These items let you to better participate in the class discussion.
* Start preparing for exams on the first day of class.
III. Homework
Accounting cannot be learned by reading alone. Doing the homework problems is the best way to retain concepts covered in the chapter. A good faith effort on homework helps you earn credit for the class.
* After you read the chapter, solve the review problems and complete the self-quizzes. If you have difficulty, try additional problems. Refer back to your text (complete with sticky notes) and class notes when necessary.
* When doing accounting problems, you must show more than just the answers. You need to support your answers with the step-by-step computations. This is called "documentation" or "leaving an audit trail".
* Do the homework as it is assigned. It is very difficult to catch up.
* Attempt all problems. If you are not sure of how to do the problem, make an honest effort. You might surprise yourself and figure it out!
* If you get stuck on a problem, don’t waste too much time on it. Go on to the next problem. The next problem may help you understand the previous problem. If you are really having difficulty, take a short break. If this fails, put a question mark by the problem and go on. Sometimes, when you look at a problem after a good night’s sleep, the solution is suddenly obvious. Finally, the solutions manual is on closed reserve in the library. You can use it to check your work or to help you when you have taken the problem as far as you can.
* Look for a study partner among the students in your class. One of you may understand concepts that the other is having difficulty with.
IV. Tests
* Go back over your homework and class notes to review for an exam.
* Develop memory aids to remember lists or long concepts.
* Remember to bring your calculator and pencils to the test.
* Before you start the test, jot down the formulas and memory aids you developed as you studied while they are still clear in your mind.
* When you first get the test, look it over quickly to gauge how much time is needed for each section.
* Do the problems you are confident about first. Subsequent problems might help you with the questions with which you had a problem.
* Do not spend too much time on one problem. Go on to the other problems and come back to the difficult problem if there is time. Taking a "break" from the problem can suddenly make it clear to you.
* There is always time to read the questions carefully – underline key words in the question so you are certain that you are answering the right question. Make sure you answer all parts of the question.
* In a multiple-choice question, try to eliminate obviously wrong answers. Unless you are sure you misread the problem, it is probably not wise to change a multiple-choice answer. Generally your first instinct is best.
* In a problem question, summarize the facts of the problem on the side of the page. This step can help you organize the steps you need to do to calculate the answer.
* Document your answer by showing your work. If the logic of your answer is correct, but you make math errors, you may still get partial credit.
* If you are recording answers onto a scantron sheet, try marking your answer on the exam and transferring all of the answers during the last few minutes of the exam. This reduces the risk of putting the wrong answer to the wrong question number or not sufficiently erasing an answer you changed.
* Don’t be surprised if accounting problems contain information that you don’t need. Part of the test process is to see if you know what information you are supposed to use to get the right answer.
The information below is designed to provide you with tips for the Accounting 215 course. Accounting is more like a math class than a history class. While understanding accounting vocabulary is necessary for you to understand lectures and problems, success in accounting comes from learning and applying the accounting process for the various topics you encounter in the class.
Try these suggestions and decide what works for you. The first four chapters are key to understanding the rest of the book, so it is important for you to develop good study habits at the beginning of the class.
I. Reading the Text
An accounting book cannot be read in the same way that you read other textbooks. Each phrase or sentence is important. Gain the most from your reading of the book by doing the following:
* Spend more time reading accounting material than you would reading other texts.
* Skim through the chapter noting the headings, then read the chapter straight through. Reread the material you do not understand.
* Read the material in smaller chunks – for no more than an hour at a time. Immediately try an exercise from the back of the chapter involving the material you have just read, or complete the self study quizzes embedded in the text.
* Take notes or underline key concepts from each section.
* Read the text before class discussion on that chapter. The class presentation will parallel but not duplicate the text.
* Put sticky notes on difficult topics for quick reference when you ask questions later.
* Make 3 x 5 index cards of key points or terminology. Carry the cards with you and review them when an opportunity arises.
* Carefully review figures and diagrams until you understand how the process or procedure should be done. If you can reconstruct and explain major figures and diagrams in the text, you will have a good grasp of the concept.
II. Lecture
Lectures are meant to clarify the more difficult concepts and draw the material together into a meaningful pattern. The class presentation will parallel but not duplicate the text.
* Organized notes serve as a reference for homework problems and exam preparation. For more note-taking tips, go back to the accounting main page to connect with the general study guide websites.
* Topics covered in the lecture are deemed important by your instructor. You have a high probability of seeing this material again!
* There is no such thing as a dumb question! Others in the class may not understand the topic. Resolving your questions keeps you from being stumped on a test or quiz, and helps to make the class more interesting for everyone.
* Copy all problems shown in class – even those problems that seem simple or that you already understand. You may forget them by the time you get to homework or exam preparation.
* Try not to miss a class. Borrow notes from another student if you miss a day.
* Bring the textbook and a calculator to class. These items let you to better participate in the class discussion.
* Start preparing for exams on the first day of class.
III. Homework
Accounting cannot be learned by reading alone. Doing the homework problems is the best way to retain concepts covered in the chapter. A good faith effort on homework helps you earn credit for the class.
* After you read the chapter, solve the review problems and complete the self-quizzes. If you have difficulty, try additional problems. Refer back to your text (complete with sticky notes) and class notes when necessary.
* When doing accounting problems, you must show more than just the answers. You need to support your answers with the step-by-step computations. This is called "documentation" or "leaving an audit trail".
* Do the homework as it is assigned. It is very difficult to catch up.
* Attempt all problems. If you are not sure of how to do the problem, make an honest effort. You might surprise yourself and figure it out!
* If you get stuck on a problem, don’t waste too much time on it. Go on to the next problem. The next problem may help you understand the previous problem. If you are really having difficulty, take a short break. If this fails, put a question mark by the problem and go on. Sometimes, when you look at a problem after a good night’s sleep, the solution is suddenly obvious. Finally, the solutions manual is on closed reserve in the library. You can use it to check your work or to help you when you have taken the problem as far as you can.
* Look for a study partner among the students in your class. One of you may understand concepts that the other is having difficulty with.
IV. Tests
* Go back over your homework and class notes to review for an exam.
* Develop memory aids to remember lists or long concepts.
* Remember to bring your calculator and pencils to the test.
* Before you start the test, jot down the formulas and memory aids you developed as you studied while they are still clear in your mind.
* When you first get the test, look it over quickly to gauge how much time is needed for each section.
* Do the problems you are confident about first. Subsequent problems might help you with the questions with which you had a problem.
* Do not spend too much time on one problem. Go on to the other problems and come back to the difficult problem if there is time. Taking a "break" from the problem can suddenly make it clear to you.
* There is always time to read the questions carefully – underline key words in the question so you are certain that you are answering the right question. Make sure you answer all parts of the question.
* In a multiple-choice question, try to eliminate obviously wrong answers. Unless you are sure you misread the problem, it is probably not wise to change a multiple-choice answer. Generally your first instinct is best.
* In a problem question, summarize the facts of the problem on the side of the page. This step can help you organize the steps you need to do to calculate the answer.
* Document your answer by showing your work. If the logic of your answer is correct, but you make math errors, you may still get partial credit.
* If you are recording answers onto a scantron sheet, try marking your answer on the exam and transferring all of the answers during the last few minutes of the exam. This reduces the risk of putting the wrong answer to the wrong question number or not sufficiently erasing an answer you changed.
* Don’t be surprised if accounting problems contain information that you don’t need. Part of the test process is to see if you know what information you are supposed to use to get the right answer.
How to Study Accounting
Ken Harper, Instructor
Sharon Miller, Assistant
1. Cumulative Study -- Accounting is certainly not a mystery, and is easy to learn. The major secret to learning accounting is remembering that it is a cumulative study subject based on the first five chapters. Each learning objective builds on the previously learned concepts and procedures. The accounting course is organized so that you learn the most fundamental concepts and procedures first, then you will be required to build on these concepts and procedures. To learn accounting, you must master the first five chapters. These fiver chapters are the basis for the next sixteen chapters. When students run into difficulty, it is generally because they have either forgotten the earlier material or have not learned it well enough to move forward.
2. Maintain a good attendance record -- You need to hear from me what topics are important, why they are important, and how to use them. Copying notes from other classmates may not always show you the what, why and how.
3. Participate actively in class -- Arrive at your classroom a few minutes early. Choose a seat where you can hear and be heard. Don't be afraid to ask or respond to questions. Try to overcome your shyness. Commit yourself to ask or answer questions in class. Remember someone else in the class is probably wondering about the same thing.
4. Do not use memorization as a substitute for understanding -- You need to understand both the reasons and the mechanic of accounting. Memorizing information will hurt you later on in the course.
5. Take notes -- A recent study indicated that you will remember 10% to 15% of what was said in class. However, if you write it down, your retention rate increases to 85%. Note taking is essential to learning accounting. You must learn to take notes efficiently, accurately, and quickly so you will not jeopardize your ability to listen effectively.
6. Make friends by studying in a group -- Exchange telephone numbers with at least two classmates. Make arrangements to study with these friends on a regular basis. Working in groups has benefits. These benefits include increasing your knowledge of accounting and improving your critical thinking and communication skills. If you are able to explain and demonstrate (verbalize) the learning objective to other group members, then you really understand the concepts. Don't be afraid to change study groups if you are unhappy with your original group. Finally, don't allow you study group turn into a gossip group, stick to your accounting.
7. Be prepared -- Before going to class review the textbook, study guide, homework assignment, and class notes. Make a list of questions you have to ask me. Writing out your questions makes it easier for you to ask me in class.
8. Keep up with the work -- Waiting until the last minute does not give you the opportunity to completely understand the learning objectives. If you have completed your homework and are able to verbalize the learning objectives to other members in your study group, then you will do well on the test. If however, you are trying to complete the reading and homework assignments the night before the examination, you will be unprepared. There is a saying, "He who does the homework ahead of time gets the A or B. He who doesn't do the homework ahead of time gets the C or D."
9. Tape record the class lectures -- This procedure has two benefits. First, you will not be overly concerned about taking notes. Secondly, recording gives you another opportunity to hear the lesson. It especially lets you review words that you are not familiar.
10. Find out what resources are available to you -- Resources available to you are:
1. Study guide
2. Tutorial - Sharon Miller
3. Your fellow classmates
4. Your instructor:
5. F41
6. Phone 408.864.8589
7. Electronic Mail School harperken@fhda.edu
8. Electronic Mail Home: drkenharper@yahoo.com
Sharon Miller, Assistant
1. Cumulative Study -- Accounting is certainly not a mystery, and is easy to learn. The major secret to learning accounting is remembering that it is a cumulative study subject based on the first five chapters. Each learning objective builds on the previously learned concepts and procedures. The accounting course is organized so that you learn the most fundamental concepts and procedures first, then you will be required to build on these concepts and procedures. To learn accounting, you must master the first five chapters. These fiver chapters are the basis for the next sixteen chapters. When students run into difficulty, it is generally because they have either forgotten the earlier material or have not learned it well enough to move forward.
2. Maintain a good attendance record -- You need to hear from me what topics are important, why they are important, and how to use them. Copying notes from other classmates may not always show you the what, why and how.
3. Participate actively in class -- Arrive at your classroom a few minutes early. Choose a seat where you can hear and be heard. Don't be afraid to ask or respond to questions. Try to overcome your shyness. Commit yourself to ask or answer questions in class. Remember someone else in the class is probably wondering about the same thing.
4. Do not use memorization as a substitute for understanding -- You need to understand both the reasons and the mechanic of accounting. Memorizing information will hurt you later on in the course.
5. Take notes -- A recent study indicated that you will remember 10% to 15% of what was said in class. However, if you write it down, your retention rate increases to 85%. Note taking is essential to learning accounting. You must learn to take notes efficiently, accurately, and quickly so you will not jeopardize your ability to listen effectively.
6. Make friends by studying in a group -- Exchange telephone numbers with at least two classmates. Make arrangements to study with these friends on a regular basis. Working in groups has benefits. These benefits include increasing your knowledge of accounting and improving your critical thinking and communication skills. If you are able to explain and demonstrate (verbalize) the learning objective to other group members, then you really understand the concepts. Don't be afraid to change study groups if you are unhappy with your original group. Finally, don't allow you study group turn into a gossip group, stick to your accounting.
7. Be prepared -- Before going to class review the textbook, study guide, homework assignment, and class notes. Make a list of questions you have to ask me. Writing out your questions makes it easier for you to ask me in class.
8. Keep up with the work -- Waiting until the last minute does not give you the opportunity to completely understand the learning objectives. If you have completed your homework and are able to verbalize the learning objectives to other members in your study group, then you will do well on the test. If however, you are trying to complete the reading and homework assignments the night before the examination, you will be unprepared. There is a saying, "He who does the homework ahead of time gets the A or B. He who doesn't do the homework ahead of time gets the C or D."
9. Tape record the class lectures -- This procedure has two benefits. First, you will not be overly concerned about taking notes. Secondly, recording gives you another opportunity to hear the lesson. It especially lets you review words that you are not familiar.
10. Find out what resources are available to you -- Resources available to you are:
1. Study guide
2. Tutorial - Sharon Miller
3. Your fellow classmates
4. Your instructor:
5. F41
6. Phone 408.864.8589
7. Electronic Mail School harperken@fhda.edu
8. Electronic Mail Home: drkenharper@yahoo.com
How to Study Accounting
How to Study Accounting
Studying is defined as applying oneself to learning. The purpose of studying accounting is to obtain the textbook and technical knowledge of accounting plus the experience necessary to succeed in the accounting profession.
Research has shown that the greater your involvement in studying, the more you retain. Retention means how long you are able to remember the concepts and practices. The four groups of study activities are shown from the lowest percentage of retention (about 10%) to the highest level of retention (about 98%):
* Hearing
* Seeing
* Saying
* Doing
Let's also look at why you are studying manual accounting when you hear so much about the use of the computer to complete accounting tasks in business. It is true that computers have become an integral part of accounting. However, you must first know the basics of accounting, the language of the profession, and the flow of the accounting cycle before you can effectively enlist the aid of a computer. A computer is only a tool to perform routine accounting tasks and print the results more quickly and attractively.
Now, let's begin our journey learning manual accounting. To do so, we shall work our way through the hierarchy of retention.
Hearing alone will only take you to the lowest level of retention. This means that if the only activity you enlist in your learning process is listening, you will retain very little. However, this does not mean that listening is not important as a learning tool. There are several things you can do in the area of listening.
* Attend class equipped with paper and pencil to take notes. Use a tape recorder if this fits your needs and the instructor agrees. Also, take your textbook to class to refer to as the presentation progresses.
* Be prepared to listen to questions asked and answers given, as well as classroom discussion.
The second level of retention adds seeing to hearing to increase the amount you remember. Two re- sources are critical to this level: your instructor and your textbook.
* First, observe your instructor carefully. Take note when he or she makes references to textbook examples, shows illustrations on handouts, distributes material on transparencies or overhead projections, or shows examples drawn in chalkboard presentations.
* Second, know your textbook and what it contains, how it is structured, and where you can find various tools.
So far, we have looked at only half of the retention hierarchy. Hearing allows you to retain the least. Hearing and seeing together increase your chances for retention. However, if you add saying or verbal participation at the third level, you will significantly increase what you remember. There are several ways in which you can strengthen your learning by hearing the sound of your own voice speaking about the subject.
* Ask questions. Sometimes you may feel confused and feel unable to formulate a question. Don't let that stop you. Try to avoid the sweeping negative statement, "I just don't get this." Narrow your question to the place your understanding went off the track.
* Volunteer answers. Be an active and enthusiastic learner!
* Participate in classroom discussions. You may be surprised how your own life experiences have prepared you for this course in accounting. You have owned things, owed money, bought items, sold things, incurred expenses, and earned an income. You may have filled out a W-4 form when you went to work for an employer, and received a W-2 form from the employer at the end of a calendar year. You may have had a checking account. Each of the activities mentioned are ones that you will experience in accounting. Your experience is valuable-share it in class. Use your personal experiences to visualize accounting tasks. See how each task fits into the accounting cycle. The discussion questions at the end of each chapter provide material to spark conversations and support discussions.
* Study with a Partner or group. It will serve not only as a way to get acquainted, but it will also provide you with support. The give and take of studying as a team will help both of you learn. You both win because your voice is a powerful tool for teaching others as well as strengthening your own learning.
* Finally, outside of class, talk to yourself. Yes, talk to yourself! For example, study glossary terms aloud, reread your notes aloud, talk your way through an accounting transaction. Let your brain hear you. You will decrease your journalizing and posting errors considerably with this technique. Don't be bashful. It will be much easier for you to speak up in class as the terminology becomes more familiar.
Let's add the last retention builder to the hierarchy--doing. So far, we have investigated
* hearing only
* hearing plus seeing
* hearing plus seeing plus saying
and now,
* hearing plus seeing plus saying plus doing.
You may have heard it said that accounting is best learned through the end of a pencil. In other words, you can read and listen all you wish, but until you actually do it, it does not become yours. An analogy might be one of studying to become a surgeon or an auto mechanic by only reading and hearing about your profession-until you try it, you do not have a working knowledge of the subject. Therefore, let me suggest that you thoughtfully and conscientiously complete all assignments your instructor makes whether they are questions, exercises, or problems.
Accounting is like a pyramid. What you learn in each new chapter builds on knowledge from previous chapters. If the base of the pyramid is not firmly in place, your accounting skills will be weak.
To summarize, in looking at "How to Study Accounting," you have seen that you need to put into force all levels of action to give yourself the highest level of retention-hearing plus seeing plus saying plus doing. You have also seen how important it is that you know your textbook-how it is structured and where to find the things you need.
Studying is defined as applying oneself to learning. The purpose of studying accounting is to obtain the textbook and technical knowledge of accounting plus the experience necessary to succeed in the accounting profession.
Research has shown that the greater your involvement in studying, the more you retain. Retention means how long you are able to remember the concepts and practices. The four groups of study activities are shown from the lowest percentage of retention (about 10%) to the highest level of retention (about 98%):
* Hearing
* Seeing
* Saying
* Doing
Let's also look at why you are studying manual accounting when you hear so much about the use of the computer to complete accounting tasks in business. It is true that computers have become an integral part of accounting. However, you must first know the basics of accounting, the language of the profession, and the flow of the accounting cycle before you can effectively enlist the aid of a computer. A computer is only a tool to perform routine accounting tasks and print the results more quickly and attractively.
Now, let's begin our journey learning manual accounting. To do so, we shall work our way through the hierarchy of retention.
Hearing alone will only take you to the lowest level of retention. This means that if the only activity you enlist in your learning process is listening, you will retain very little. However, this does not mean that listening is not important as a learning tool. There are several things you can do in the area of listening.
* Attend class equipped with paper and pencil to take notes. Use a tape recorder if this fits your needs and the instructor agrees. Also, take your textbook to class to refer to as the presentation progresses.
* Be prepared to listen to questions asked and answers given, as well as classroom discussion.
The second level of retention adds seeing to hearing to increase the amount you remember. Two re- sources are critical to this level: your instructor and your textbook.
* First, observe your instructor carefully. Take note when he or she makes references to textbook examples, shows illustrations on handouts, distributes material on transparencies or overhead projections, or shows examples drawn in chalkboard presentations.
* Second, know your textbook and what it contains, how it is structured, and where you can find various tools.
So far, we have looked at only half of the retention hierarchy. Hearing allows you to retain the least. Hearing and seeing together increase your chances for retention. However, if you add saying or verbal participation at the third level, you will significantly increase what you remember. There are several ways in which you can strengthen your learning by hearing the sound of your own voice speaking about the subject.
* Ask questions. Sometimes you may feel confused and feel unable to formulate a question. Don't let that stop you. Try to avoid the sweeping negative statement, "I just don't get this." Narrow your question to the place your understanding went off the track.
* Volunteer answers. Be an active and enthusiastic learner!
* Participate in classroom discussions. You may be surprised how your own life experiences have prepared you for this course in accounting. You have owned things, owed money, bought items, sold things, incurred expenses, and earned an income. You may have filled out a W-4 form when you went to work for an employer, and received a W-2 form from the employer at the end of a calendar year. You may have had a checking account. Each of the activities mentioned are ones that you will experience in accounting. Your experience is valuable-share it in class. Use your personal experiences to visualize accounting tasks. See how each task fits into the accounting cycle. The discussion questions at the end of each chapter provide material to spark conversations and support discussions.
* Study with a Partner or group. It will serve not only as a way to get acquainted, but it will also provide you with support. The give and take of studying as a team will help both of you learn. You both win because your voice is a powerful tool for teaching others as well as strengthening your own learning.
* Finally, outside of class, talk to yourself. Yes, talk to yourself! For example, study glossary terms aloud, reread your notes aloud, talk your way through an accounting transaction. Let your brain hear you. You will decrease your journalizing and posting errors considerably with this technique. Don't be bashful. It will be much easier for you to speak up in class as the terminology becomes more familiar.
Let's add the last retention builder to the hierarchy--doing. So far, we have investigated
* hearing only
* hearing plus seeing
* hearing plus seeing plus saying
and now,
* hearing plus seeing plus saying plus doing.
You may have heard it said that accounting is best learned through the end of a pencil. In other words, you can read and listen all you wish, but until you actually do it, it does not become yours. An analogy might be one of studying to become a surgeon or an auto mechanic by only reading and hearing about your profession-until you try it, you do not have a working knowledge of the subject. Therefore, let me suggest that you thoughtfully and conscientiously complete all assignments your instructor makes whether they are questions, exercises, or problems.
Accounting is like a pyramid. What you learn in each new chapter builds on knowledge from previous chapters. If the base of the pyramid is not firmly in place, your accounting skills will be weak.
To summarize, in looking at "How to Study Accounting," you have seen that you need to put into force all levels of action to give yourself the highest level of retention-hearing plus seeing plus saying plus doing. You have also seen how important it is that you know your textbook-how it is structured and where to find the things you need.
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