Are you considering an accounting education but confused by all the jargon? This is a quick guide to understanding the different specialties associated with accounting careers and the training you will need to be successful.

Business cannot function without people who monitor, evaluate, and synthesize productivity, financial, and resource data. Accounting, or accountancy, is the practice of collecting and measuring data in order to allocate resources. Most often accounting is specific to a business’s finances. Auditing is a related field whereby records are reviewed and a conclusion reached; resulting in a recommendation for action; geared to ensure efficiency and to improve performance and ensure adherence to standards and principles.

A simple example of the workplace relationship follows: An accountant would enter and keep track of payroll and company expenses. An auditor would review the records kept by the accountant to determine if money and time are being well spent.

When people think of auditors, the first thought is probably one of an IRS man in a suit with a stern expression coming to make sure you paid your taxes. While this type of auditor exists (not to be feared if you have been a good record keeper) auditors are usually individuals who are hired to evaluate the accuracy of accounts kept by a company. Their analyses help management determine effectiveness and efficiency.

Accounting professionals often deal with time to money ratios. In order to keep track of all these numbers, professionals must be well able to use computers; specifically spreadsheet applications (such as Microsoft Excel).

Accountants often specialize in one field. Jobs include bookkeeping, tax accounting, cost accounting, accounts payable, accounts receivable, time keeping and payroll.

o Accounts receivable refers to incoming payments.

o Accounts payable refers to debits and outgoing payments.

o Bookkeeping refers to recording transactions and calculations.

o Tax accounting in its simplest form refers to the specialty of preparing tax returns.

o Cost accounting refers to the specialty of accounting that deals with analyzing, tracking, and recording business costs. Cost may be measured not only in money, but in time.

o Time keeping and payroll clerks do just what it sounds like; they keep track of workers’ time sheets and payroll.

Training for accounting careers varies. For many jobs a bachelor’s degree in accounting is not necessary, though some education or experience is generally required. Accounting training programs often involve computer classes to familiarize students with the applications used in the workplace. Those in the accounting field must be comfortable using spreadsheets and other financial and accounting software (QuickBooks, Microsoft Excel) as well as word processing software such as Microsoft Word. Close attention to detail is essential, as is an aptitude for numbers and order. A high level of trustworthiness and discretion is also essential as much of the information processed is confidential. Office experience and communication skills are also essential in the workplace. Certified Public Accountants (CPAs) must undergo a four-part, two-day exam administered by the American Institute of Certified Public Accountants (AICPA) and are required to complete a minimum of 150 college credit hours (this is 30 hours more than the usual needed to graduate with a bachelor’s degree.) The exam is considered to be quite difficult, and many do not pass all four sections at one time. Partial credit is usually awarded as long as the candidate passes at least two sections.

As with any career, an interest in the subject matter is helpful. Someone who hates math should probably not consider an accounting career just as someone who hates English should steer clear of copywriting.

Remember, it never hurts to do a little research and ask questions about programs. School representatives are always happy to help prospective students find out more about their offerings. Accounting careers are diverse and abundant; why not change your future with an accounting education?

The lists of bank and savings accounts that are available to most people are bewildering. A quick look at a comparison site like Moneynet or Moneyfacts will reveal thousands of different products. Unfortunately many of these accounts are not accessible for anyone with either a poor or even no credit history.

Research carried out for the National Consumer Council (NCC) reveals “that the poor pay more, or get less, for essential goods and services… having a bank account can be a gateway to other products and services, such as affordable credit and insurance”. To help counteract this problem of financial exclusion, the government has tried to initiate the introduction of basic bank accounts for the least well off. The NCC has however warned that, “the current model of basic bank accounts, introduced by government in 2000 in an attempt to enable all low-income consumers to access banking services, is not delivering.”

The new basic bank accounts were introduced as part of a wider push towards ‘universal banking’ and corresponded with the introduction of direct payment of social security benefits to bank accounts as well as the Post Office Card Account (POCA). The plan was that these accounts would also help their users by letting them set up direct debits to pay their utility bills, and so keep better track of their finances from week to week.

The accounts were originally designed to let people save and withdraw money, but in an effort to prevent extending any existing debts and stopping the accounts from becoming overdrawn, they don’t offer cheque books, overdrafts or other credit facilities. The accounts were intended for those with no credit history who might not meet the banks’ criteria for opening a standard current account. The accounts features typically include the ability for payments, for example pensions and benefits, to be credited direct to the account, withdrawals by plastic card through cash machines and the facility to pay bills by direct debit.

The problems experienced seem to be partly because the accounts do not always help those with a small weekly income to deal with the unpredictable gaps which can occur in wages, benefits or spending. Automated monthly direct debit payments for goods and services can prove of little use to many on low weekly based incomes. Those paid on a week by week basis, expressed a preference for weekly cash based, rather than monthly direct debit, budgeting options and felt that bank accounts with direct debit facilities would not provide them any advantages. By using cash instead of a bank account, they found they could juggle payments easier, and avoid punitive additional bank charges if they did not have the funds to hand, to cover an outgoing debit payment.

Another problem experienced was that the holders of these basic accounts are also liable to be those on low incomes, with low (if any) savings and are more likely to be in arrears paying their household bills than those without them. This vulnerable group are less likely than most to be able to deal with unexpected additional expenditure, such as an unforeseen bill for home repairs, but without recourse to any credit facilities, they may be forced into resorting to high interest loans to cover temporary setbacks.

The NCC found that “people on low incomes who use accounts to manage their money are more likely to be in arrears with household bills. They are also more likely to have outstanding credit commitments, partly because they have wider access to credit”, than those without accounts.

The government has set a target of halving the number of households which do not have access to a bank account by 2006. The banks state that they currently face a lack of demand, however more than two million applications, in excess of the government’s expected take-up, for the POCAs have been made. The banks are claiming that reaching the targets will be difficult, as they are being impeded by various barriers to opening basic bank accounts, such as the identification requirements in money laundering rules. Some of those on low incomes may not possess either a full driving license or full passport, and so find difficulties setting up new financial accounts. The banking industry has also been widely criticised for failing to actively promote basic bank accounts and, sometimes, for actually discouraging people from opening them.

The NCC proposed that basic bank accounts need to be more flexible. Suggestions to make the bank accounts meet the needs of consumers included offering weekly, rather than monthly, direct debit facilities where payments are only triggered if the money is available in the account, occasional payment holidays, and small free ‘buffer zone’ overdrafts.

Whether the lack of interest is due to the banks, the government, or the product itself, something needs to be done if there is to be an increase in the take-up rates. Half of those surveyed by the NCC felt they do not really need an account. An even more damning indictment of the current basic bank accounts was that a similar proportion of account holders preferred to withdraw all their income, rather than leave it in the account, and then manage it as cash. An inclusion policy may be a laudable idea, but it is no use if people do not want to be included, and it should not disadvantage those it is meant to help.

After developing five accounting firms from 1984 to 1994, I spent the next fifteen years assisting over 2,000 accountants develop and improve their accounting firms as a Practice Development Consultant. This experience showed that many accountants had implemented many marketing programs that fail.

The primary reason most accounting marketing programs fail is because the accountant attempts to treat his or her services as a commodity. Unfortunately, this often leads to very low response and low quality of clientele. There are volumes of accountants who have tried very expensive marketing programs offered by many companies lured by difficult-to-enforce guarantees experiencing disastrous financial consequences. The majority of these marketing failures centralize on the programs using commodity-marketing techniques.

The accounting industry is not commodity driven; it is driven by trust and loyalty. Trust has to be established. It cannot be sold. Accordingly, if an accountant attempts to sell his or her accounting services as a commodity or product, he or she will fail.

The first step for an accounting services marketing program should be to identify a business that is seeking the services of a CPA or Accountant. If a business is pleased with its current CPA or accountant and is not seeking the services of a new CPA or Accountant, that business is not going to change accountants. Any attempt of an accountant using a marketing program to sever that relationship by aggressive selling techniques will only diminish the business’s perception of the accountant and his or her firm. The wise accountant will never pull a businessperson away from his or her existing accountant if that person is satisfied with the accountant or CPA. Acknowledge the situation as a good one for both the business and the CPA Accountant. Never attempt severing that which is good for the business, neither the CPA Accountant nor the Accounting Industry.

Having acknowledged that a CPA Accountant’s marketing program should have the capacity to identify a business seeking the services of a new CPA Accountant, the second step the accountants marketing program should produce is to have the business seeking a new CPA Accountant to become interested in you and your accounting firm. If your marketing program has a business seeking a new CPA Accountant becoming interested in you, the new client meeting will be much like meeting with referred prospective clients. They will be openly interested in you. You won’t feel yourself in the position of having to sell them into using you or your firm. Remember, the accounting industry is based on trust. The key for your success in your marketing program is its ability to provide you the opportunity to establish trust and demonstrate how you can help the prospective client.

Once you have a business in need of accounting services interested in you, the third step your accounting services marketing program should perform is showing you how to demonstrate your ability to help your prospective client in your presentation. Too many accounting marketing programs fail because they are predicated on the CPA Accountant performing sales presentations to new prospective clients. Businesses are not interested in being sold accounting services. Businesses are interested in how the CPA Accountant can help them and their business. The CPA Accountant should provide the examples of how they can help and apply those examples to his or her business. It is important he or she understands and sees the value you are providing. Most businesses do not understand the value a CPA accountant provides. If your accountant-marketing program centralizes your presentations about you and your firm, it is the wrong marketing program; the program must centralize your presentation around the prospective client and your ability to help him or her.

Finally, the fourth step your accountant’s marketing program should provide you is techniques to price your services in relationship to the value you demonstrated in your presentation. Your objective is not to discount your firm’s services to entice a new client to come on board, but to price your service as a good value in relationship to the value you are providing. For example, if a prospective client could choose to spend $1,000 to have a CPA or Accountant prepare his or her business tax return, he or she or may not choose to do so. However, if that same CPA or accountant showed the prospective client tax-saving strategies that will save him or her save $5,000 per year in taxes, the client will definitely choose to have that CPA Accountant prepare his or her taxes for $1,000. He or she will perceive using that CPA or Accountant of great value. Observe in the example, the primary factor of why the prospective client decided to come on board was not the absolute cost of the service but the value received in relationship to that cost.

In summary, there are four steps an accountant’s marketing program should employ. It should:

1) identify a business seeking a new CPA or Accountant,

2) generate an interest in that business in using you or your firm,

3) show you how to demonstrate value in your new client presentation, and

4) price your firm’s services in relationship to your value.

If your accountant’s marketing program fails to employ any of the four basic steps or attempts to market accounting services as a commodity, it is recommended that you abandon the implementation of that program. You will avoid frustration and possible financial disasters. Remember, the key to a successful CPA Accountant’s marketing program is never sales oriented. It is placing you and your firm in contact with a business that has a need and is interested in you or your firm fulfilling that need.

Bed linens showroom is an asset of a bed linens business. In placing value on the assets of a business, what figure should the accountant use? The market value? The cost of replacing them? Their original cost? Valuing assets is obviously a bristly problem.

Consider for example, the luxury bed ensemble you are using. If you were to value them at their market value, how would you determine that value? Any two persons would probably disagree as to the market value.

However, if we were to use your original cost of the bed ensemble as the basis for valuing them, any two persons would probably agree as to the price you paid, given the necessary information.

Market value provides a subjective basis for valuing objects, whereas original cost is an objective basis. If market value were used as the basis for valuing your luxury bed ensemble, a person to whom the valuation is given would not know how much he could trust the valuation.

Moreover, you are not likely to sell your bed ensemble, anyway. Therefore, you do not need to know their current market value. Instead, you are going to use them in the course of your normal activities. Because you are not about to resell your luxury bed ensemble, for most purposes its market value is irrelevant.

Similarly, a business purchases its assets with the assumption that they will be used in the company’s operations; i.e., the normal assumption is that the business is a going concern.

Thus, there are two reasons for valuing the assets of a business at cost rather than market value: First, market value is too subjective a measure and the second, the business does not need to know the market value because it intends to use the assets in the normal course of business rather than to resell them.

The accounting principle according to which we normally assume that a business will continue for an indefinite period and is not about to be sold is called the going concern concept.

The going-concern concept and the difficulty in determining market value objectively require us to value assets at their cost. The fact that normally assets are valued at their cost is another major accounting principle, the cost concept. Evidently, the going concern concept is one reason for the cost concept.

Assets should be recorded at cost which is the amount exchanged at the time the item was acquired. Machinery with a list price of $5,000 which was purchased at a discount of $1,000 should be recorded at $4,000. A bed linen showroom costing $70,000 at the time it was purchased on installment basis payable in 4 yearly installments of $20,000 or a total installment price of $80,000 should be recorded at $70,000 which is the amount or value exchanged at the time the asset was acquired.

purecomfortlinens.com, the ecommerce outlet of Vicera Enterprises, Inc., a duly registered corporation, offers a wide variety of high quality bedding and accessories for every bedroom in your house. It carries simple and colorful linens, stylish bedspreads, conventional comforters with self corded edge finish, etc., balmy pillows, beautiful pillow cases and other bed accouterments. We have been providing consumers with durability and comfort at reasonable prices.

Accounts are kept for business entities, rather than for the persons who own, operate, or otherwise are associated with the business. The business entity concept assumes that a business enterprise is separate and distinct from the owner or investor.

For example, Mr. A is the sole owner of Bed Linens Online, a sole proprietorship. Mr. A withdraws $100.00 from the business. In preparing financial accounts for the business, we should record the effect of this transaction on the accounts of Bed Linens Online.

In this transaction, Mr. A exchanges $100 of owner’s equity for $100 in cash. Mr. A is no better or worse off than he was before. We have seen that Mr. A is just as well off after this transaction as before. What about the business? It now has $100 less in assets.

Evidently, transactions such as this can affect the owner in one way and the business in another. Financial accounts of Bed Linens Online, however, will report only the effect that the transaction has upon the business.

The fact that accounts are kept for business entities as distinguished from the persons associated with those entities is called business entity concept.

A business may be organized under any one of several legal forms, such as corporation, partnership, or unincorporated proprietorship. The business entity concept applies regardless of the legal status.

Supposing John joined Mr. A to run Bed Linens Online as partners. Each removes $1,000 from the business and puts it in his savings toward the college education of his children. An accounting report of the financial status of the partnership would show that the business has $2,000 less cash.

Personal properties and liabilities of the owner are not included in the business financial statements. Let us assume that Mr. A bought two computer sets, one for his personal use and the other for Bed Linens Online. Only the computer for use in the business should be recorded in the books of the partnership.

It is also required under this concept that if the owner has more than one business firms, the records and financial statements of each should be separately maintained. The accounting process is primarily for the enterprise and secondarily for the owner or investor.

Let us assume that Mr. A, aside from his personal assets and Bed Linens Online, owns two more enterprises, a laundry service and a delivery service. Records and financial statements of the three enterprises should be separately maintained so that decisions can be made for each one of the businesses.

If they are kept in the same set of accounting records, or if the personal activities of the owner are included, it would be difficult to find out which business is financially profitable or solvent.

Purecomfortlinens.com, the ecommerce outlet of Vicera Enterprises, Inc., a duly registered corporation, offers a wide variety of high quality bedding and accessories for every bedroom in your house. It carries simple and colorful linens, stylish bedspreads, conventional comforters with self corded edge finish, etc., balmy pillows, beautiful pillow cases and other bed accouterments. We have been providing consumers with durability and comfort at reasonable prices.

What is ethical accounting? The idea of accounting ethics deals with the moral and values-based judgments and decisions an accountant or accounting agency confront daily in their practice. Due to the nature of their work as communicators of financial information to business managers, shareholders, and the general public, as well bookkeeping and auditing of business entities, accountants and accounting agencies are held to the highest standards of transparency and morality in regards to their research and the information they convey. Accounting can be used as a way to study how and why a business may succeed or fail, but above all it is a public service; those who practice it must make judgments and decisions that can sometimes supersede the interests of their clients in favor of the interests of the public at large.

Failure to apply ethical standards to accounting creates the opportunity for manipulation of facts and information that, if used to mislead, could cause a person to invest under false pretenses, or a business to represent its finances fraudulently to its shareholders. It is of the utmost importance that the public be able to trust accountants and accounting, because their financial future, and that of their family or business, could be at stake.

Why is it important that accountants and accounting firms be ethical?

Over the years there have been several large accounting scandals in the United States, and in the world at large, which caused private investors and public shareholders to lose billions of dollars, and giant businesses and accounting firms to fold, because of falsified or incorrect information given out about the companies in which the money was invested. The Enron scandal is perhaps the most recent and glaring example of unethical accounting causing widespread negative effects, including the loss of $25 billion in shareholder assets, the closure of the Arthur Anderson auditing firm, and the subsequent loss of 85000 jobs when the unethical practices were reported and the company dissolved.

Ethical accounting is not only important to private businesses or individuals for reliable information about their respective financial states, but has a responsibility to the public to provide transparent evaluations of publicly held business entities. Ethical accounting can help eliminate the serious problems raised when incomplete or incorrect information about business or individual is disseminated, saving money and jobs and helping to increase stability in financial markets.

It is important that all organizations keep records of their resources, resource uses and claims against the organization. These resources are known as assets, and represent the things of value that the company owns.

There are financial assets such as Cash in the bank and Account Receivables (amounts owed to the company). There are also non-financial assets, such as machinery and office furniture. Also there are Intangible assets defined as identifiable non-monetary assets that cannot be seen, touched or physically measured, which are created through time such as Goodwill.

ASSET AND LIABILITY
The business assets can be obtained from money contributed to the business by its owners to expand operations. Borrowing from a bank also creates an asset (Cash) and also a liability (note payable). The business also incurs an asset (Inventory) and a liability (Accounts payable or notes payable) when merchandise inventory is acquired.

PROFITS
A net increase to assets is obtained assets such as inventory is sold at a price higher than that at which it is bought, including the expenses to sell.–resulting in a profit. Note that the overall profit for any given period is derived by subtracting all the expenses of operation from the revenue generated. It should also be noted that the total expenses used in the computation depends on whether the company is using the CASH BASIS or the ACCRUAL BASIS of accounting.

CASH AND ACCRUAL BASIS
The cash method is more commonly used in small businesses. Under the cash method, income is not counted until payment is actually received, and expenses are not counted until they are actually paid.

Under the accrual method, transactions are counted when the goods or services are ordered, the item is delivered, or the services received, regardless of when the money for them is actually received or paid.

Profit is the motive of all business-type organizations. This form of organization is distinct from a non-profit organization, such as a charity or a church.

The difference between assets and liability is called Equity or Capital. Capital can also be introduced to the business when the owner or shareholder makes a contribution to the business.

We derive the accounting equation from these three elements-asset, liability and equity. The equation is: Assets = Liability + Equity – meaning that the assets of an entity are equal to the resources of those assets: which is the liability and equity.

Thus, at any given time in a period, a financial statement can be prepared showing the assets on one side of a balance Sheet and the liabilities and equity on the other side. This statement is called a Balance Sheet, and represents the status of the financial position of a business. Some non-profit organization also refers to this statement as a statement of financial position.

Equity will be changed (increased) when an asset is sold for profit, and will be decreased when an item is sold at a loss.

There are much to accounting than stated above, the reader can use search topics in the search engines to get more information, or follow this Author for future postings.

The term current asset denotes assets which are either currently in the form of cash or are expected to be converted into cash within a short period, usually one year. Cash, of course, is a current asset under this definition, since it consists of unrestricted funds available for immediate disbursement.

By marketable securities is meant securities that are expected to be converted into cash within a year. Marketable securities are current assets. They are recorded at cost which is in accord with one of the accounting principles, the cost concept.

Investments are securities that are held for a longer period of time and are purchased for reasons other than temporary use of excess cash, they are noncurrent assets.

The word security means an instrument such as a stock or bond. Thus a share of the common stock of Bed Linens Company, Inc. would be classified as a security.

An accounts receivable is an amount that is owed to the business, usually by one of its customers, as a result of the ordinary extension of credit. Thus your monthly bills from a telephone company, electric company, etc. would be carried on their books as their accounts receivable. Similarly, if Bed Linens Company, Inc. sold quality bed linens and sheet sets on account, it has accounts receivable from customers.

A debt that is evidenced by a note or other written acknowledgement is termed a note receivable. Thus an obligation of a bed linens company to pay a manufacturing company for wall treatments purchased on account is to be recorded as accounts receivable on the books of the manufacturing company.

Most of the time, a creditor would ask his customer to sign a promissory note after the customer defaulted in the settlement of his obligation. If this happens, a promissory note to repay a debt is a note receivable on the books of the creditor thus substituting the accounts receivable entry.

A fence around a company’s property benefits the company by providing security and protection against loss. It is an asset. Would you think that a fire insurance policy that gives a year protection would also be an asset? It is. The protection provided by a one-year insurance policy will last a relatively short period. Therefore, such a policy would be considered a current asset.

Goods being held for sale, as well as materials and partially finished products which upon completion will be sold are termed inventories. For example, wall treatments used by the business in its office is not inventory. Wall treatments owned by a bed linens business for resale is inventory.

Wall treatments together with luxury bed ensembles, quality bed linens, unique beach towels and other  bedroom accessory are noncash assets but are expected to be converted into cash within a short period of time; hence they are listed as current assets under the account title merchandise inventory.

PureComfortLinens.com, the ecommerce outlet of Vicera Enterprises, Inc., a duly registered corporation, offers a wide variety of high quality bedding and accessories for every bedroom in your house. It carries simple and colorful linens, stylish bedspreads, conventional comforters with self corded edge finish, etc., balmy pillows, beautiful pillow cases and other bed accouterments. We have been providing consumers with durability and comfort at reasonable prices.

What are assets of a business in the accounting sense of the word? To qualify as an asset of a business in the accounting sense of the word, a property must be owned by that business.

Therefore if Bed Linens Manufacturing Company leases a delivery truck from Quilts & Shams Enterprises, which owns a fleet of such trucks, the rented equipment would not be an asset of Bed Linens Company and would be an asset of Quilts & Shams Enterprises.

A lease is an agreement under which the owner of property permits someone to use it. Thus families who live in an apartment house ordinarily lease their apartments from the owner of the apartment house. Similarly, a weaving machine on lease would not be an asset of the company borrowing it.

All assets must be owned. Also, it must be of value to the business, either because it will be converted into cash, or because it is expected to benefit future operations. The right to collect moneys owed by customers to the business and current inventory of luxury bed ensembles and sheet sets would qualify as assets.

A final requirement as an asset is that the property or property right must have been purchased at a measurable cost. Thus, if Bed Linens Manufacturing Company gradually acquires an excellent reputation because of the consistently high quality of its goods and services, this reputation would not be an asset in the accounting sense of the word.

However, if a company pays a specific amount of money to acquire a reputation, as when it purchases another business to acquire its good name, then the reputation would be classified as an asset in the accounting sense of the word.

Bed Linens Manufacturing Company has operated a bed linens showroom at the same location for twenty years. During that period, it has developed a growing number of steady customers because of its reputation of good quality and services at fair prices. The value of this reputation is not an asset in the accounting sense of the word.

Bed Linens Manufacturing Company has tangible assets with a fair market value of $1M. Comforters and Duvets Retail Store pays $1.2M to purchase Bed Linens Manufacturing Company. Evidently, Comforter and Duvet Retail Store is paying $1M to acquire Bed Linens Manufacturing Company’s tangible assets and $.2M to acquire intangible things such as reputation and favorable location.

If Comforter and Duvet Retail Store has paid $.2M to acquire intangible things, then these intangibles would be classified as an asset on its books. When favorable location or reputation qualifies as an asset, they are listed as the item, goodwill on the balance sheet.

Other items that are treated in the same way as goodwill, i.e., that must be paid for at a measurable cost in order to be listed as assets, are copyrights, patents, licenses, franchises, and trademarks.

To qualify as an asset therefore, a thing must be of value to the business, it must be owned by the business and measurable in terms of money.  and sheet sets which comprise the bulk of merchandise inventory of Bed Linens Manufacturing Company, qualify as assets as they are measurable in terms of money, owned by the business, and expected to be converted into cash.