Assignment 205 Unit 1 Assignment
Accounting Principles - Unit 1 IP
Adrian Watson
AIU Online: Acct. 205
January 13, 2015
Accounting is the process of keeping track of information transactions and analyzing financial information. Organizations divide accounting into two different branches, management accounting and financial accounting. Management accounting is used for internal use. It allows for private owners to make decisions based on that organizations finances.
External financial accounting on the contrary, is used to create financial statements that will be viewed by a variety of outside people and organizations. This empowers current and/or potential investors to make decisions concerning their interaction with that organization.
Some of the terminology …show more content…
found in financial reports may look foreign to a person lacking a background in accounting. However these terms mean a great deal to those who are aware of their meaning. Here are a few examples of the terms and even formulas found in financial reports. The Accounting Equation Formula is: assets = liabilities + equity. Without knowing the
meaning of some of these terms one would never understand how the formula works. So lets break each of them down.
Assets are anything of cash value that is owned by a person or organization. Liabilities are monies owed to creditors , services, vendors, etc.
Equity is money that belongs to the owner or owners and investors after all debts in relation to the assets are paid off. Now that we know how each of the terms operate within the equation, you may wonder how to keep the report accurate. The key to this is keeping what is called credit and debit entries in balance within the financial report. Credit account entries reflect a negative value for assets, and shows value for equity and liabilities. Debit entries show positive value for assets and negative value for equity and liability. More examples of terminology include net income, revenue, etc. These terms were just a few examples of the terminology you may encounter in the future. Each are important and play a role in accurately reporting the financial state of an organization. I know firsthand how important accuracy, organization, and financial awareness are in everyday life as well as in the professional aspects of my life. I have balance my check book after making a purchase or paying a utility bill. I am lost without doing it. Im likely to …show more content…
forget
I made a transaction and would possibly overdraft my bank account if I didn’t make this a religious practice! My Job as a claims adjuster works very much the same way. I have to report financial information to my superiors, policy holders, lawyers, etc.
on a daily basis. I have to keep a journal of dates, check amounts, and deductibles.. When advising clients of this information i am obligated to ensure the reports are accurate. If there are any mistakes I am ethically bound to advice all interested parties and correct these miscalculations as quickly as possible. Moreover, I cannot knowingly deceive my employer, policy holders, or any interested party about any information that they are entitled to concerning a claim. Doing so risks the my own personal integrity within the company, as well as the company name among our current and potential policy holders. I could also face fines, termination, and possible imprisonment . Needless to say I could never keep up with all of that information without the technology made available to me. Small businesses look to technology as a critical tool to increase efficiency and grow business networks according to (Business News Daily). I believe that the most important impact of technology on small business is improved control of monitoring inventory levels and total cost. With that come greater expenditure control and control of revenue streams.
Sources:
Editorial Board. (2011) Accounting I and II (1 e.d.). Words of Wisdom LLC.
Retrieved January 15, 2013
Business News Daily, 11:45 AM ET October, 15, 2010: Technology Plays A Big Role In small
Business, Senior Writer Ned Smith
Adrian Watson
AIU Online: Acct. 205
January 13, 2015
Accounting is the process of keeping track of information transactions and analyzing financial information. Organizations divide accounting into two different branches, management accounting and financial accounting. Management accounting is used for internal use. It allows for private owners to make decisions based on that organizations finances.
External financial accounting on the contrary, is used to create financial statements that will be viewed by a variety of outside people and organizations. This empowers current and/or potential investors to make decisions concerning their interaction with that organization.
Some of the terminology …show more content…
found in financial reports may look foreign to a person lacking a background in accounting. However these terms mean a great deal to those who are aware of their meaning. Here are a few examples of the terms and even formulas found in financial reports. The Accounting Equation Formula is: assets = liabilities + equity. Without knowing the
meaning of some of these terms one would never understand how the formula works. So lets break each of them down.
Assets are anything of cash value that is owned by a person or organization. Liabilities are monies owed to creditors , services, vendors, etc.
Equity is money that belongs to the owner or owners and investors after all debts in relation to the assets are paid off. Now that we know how each of the terms operate within the equation, you may wonder how to keep the report accurate. The key to this is keeping what is called credit and debit entries in balance within the financial report. Credit account entries reflect a negative value for assets, and shows value for equity and liabilities. Debit entries show positive value for assets and negative value for equity and liability. More examples of terminology include net income, revenue, etc. These terms were just a few examples of the terminology you may encounter in the future. Each are important and play a role in accurately reporting the financial state of an organization. I know firsthand how important accuracy, organization, and financial awareness are in everyday life as well as in the professional aspects of my life. I have balance my check book after making a purchase or paying a utility bill. I am lost without doing it. Im likely to …show more content…
forget
I made a transaction and would possibly overdraft my bank account if I didn’t make this a religious practice! My Job as a claims adjuster works very much the same way. I have to report financial information to my superiors, policy holders, lawyers, etc.
on a daily basis. I have to keep a journal of dates, check amounts, and deductibles.. When advising clients of this information i am obligated to ensure the reports are accurate. If there are any mistakes I am ethically bound to advice all interested parties and correct these miscalculations as quickly as possible. Moreover, I cannot knowingly deceive my employer, policy holders, or any interested party about any information that they are entitled to concerning a claim. Doing so risks the my own personal integrity within the company, as well as the company name among our current and potential policy holders. I could also face fines, termination, and possible imprisonment . Needless to say I could never keep up with all of that information without the technology made available to me. Small businesses look to technology as a critical tool to increase efficiency and grow business networks according to (Business News Daily). I believe that the most important impact of technology on small business is improved control of monitoring inventory levels and total cost. With that come greater expenditure control and control of revenue streams.
Sources:
Editorial Board. (2011) Accounting I and II (1 e.d.). Words of Wisdom LLC.
Retrieved January 15, 2013
Business News Daily, 11:45 AM ET October, 15, 2010: Technology Plays A Big Role In small
Business, Senior Writer Ned Smith