standard 2: functions of a business eq 1a: what are tasks associated with accounting and finance?
TRANSCRIPT
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Standard 2: Functions of A Business
EQ 1A: What are tasks associated with Accounting and Finance?
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What is Accounting?
• Method of reporting financial activity of a business
• Financial transactions recorded in an orderly fashion
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Accounting EquationAccounting Equation
Assets =
Liabilities +
Owner’s
Equity
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Assets
Anything of Value
owned by the Business
Cash / Accounts Receivable Office
Equipment
Building / Real Estate
Company Cars
Office Furniture
Office Supplies
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LiabilitiesMoney owed by
the business
Accounts Payable
Mortgage Payable
Office Supply Store Utilities
Corporation
Taxes Due
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Financial Statements
• Financial Statements• Written reports that describe the
financial health of a company; prepared regularly on quarterly and annual basis.
Balance SheetIncome StatementStatement of Change in Owner’s
Equity
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Financial Statements, cont.• Balance Sheet
• Reports assets, liabilities, and owner’s equity on a certain date
• Assets• Anything of value
that is owned by the business.
• Liabilities• Money owed by
the business (debts, accounts payable)
• Owner’s Equity• Net worth of the
business
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Financial Statements, cont.• Income Statement
• Financial Statement of a business that reports the revenue, expenses and the net income (loss) of a business for the fiscal period.
• Revenue• Amount of money
that a company earns
• Expenses• Costs of maintaining
and operating a business.
• Income/Profit• Results when a
business’s income is greater than its expenses.
• Loss• Results when a
business’s expenses are greater than its income.
• Fiscal Period• Specific period of
time covered by an accounting statement or report (1 month or year)
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Financial Statements, cont.
• Statement of Change in Owner’s Equity • Financial Statement
of a business that reports the changes that have occurred in the owner’s equity account during the fiscal period.
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Accounting Tasksrelated to orderly record-keeping of financial information • Recording daily
transactions
• Preparing financial statements
• Paying bills
• Preparing payroll checks
• Preparing tax forms
• Auditing financial records• Examining financial
records for accuracy and compliance with regulations
• Reconciling the checkbook• Bringing the checkbook
into agreement with bank statement
• What are other accounting activities?
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Banking Tasksoccur in banks, credit unions and savings and loans
• Accepting deposits and processing withdrawals
• Preparing money orders and cashiers checks
• Opening new accounts for customers
• Processing loan applications
• What are other banking activities?
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Finance Tasksare related to investments and managing finances • Analyzing budgets• Buying and selling
stock and other securities
• Consulting with businesses on financial matters
• Counseling investors• Selling
insurance
• Managing the finances for the entire company
• What are other finance activities?
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Check your understanding!
1. ASSETS = LIABILITIES + OWNER’S EQUITY.
a. Payroll Recordb. Budgetc. Accounting Equation
2. Money owed by the business (debts, accounts payable)
a. Revenueb. Liabilitiesc. Assets
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3. Anything of of value that is owned by the business
a. Revenue
b. Loss
c. Assets
4. Net worth of the business
a. Liabilities
b. Owner’s Equity
c. Revenue
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Check your understanding!1. ASSETS = LIABILITIES + OWNER’S EQUITY.
a. Payroll Recordb. Budgetc. Accounting Equation
2. Money owed by the business (debts, accounts payable)a. Revenueb. Liabilitiesc. Assets
3. Anything of value that is owned by the businessa. Revenueb. Lossc. Assets
4. Net worth of the businessd. Liabilitiese. Owner’s Equityf. Revenue
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Standard 2: Functions of A Business
EQ 1B: What are The Careers in The Accounting and Finance Field?
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Finance Careers• Financial Manager
• Top level professional who may have final responsibility for aspects of a business’ financial activity
• Accountant• Professional who
produces and examines financial records, prepares financial reports and tax returns; may give budget, tax or investment advice to company/customer
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Finance Careers, cont.• Certified Public Accountant (CPA)
• Accountants who meet specific educational requirements and pass a national examination
• Auditor• Professional whose work involves checking on
the accuracy of work completed by bookkeepers and accountants
• Bank Teller• Bank employee who handles deposits,
withdrawals, selling travelers check, accepting loan payments, preparing money orders
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What do Accountants do?
• Track companies’ expenses• Prepare, analyze and verify financial
documents• Look for ways to run businesses
more efficiently• Keep public records• Make sure taxes are paid properly
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Certified Public Accountants
• Perform audits• Prepare taxes for
corporations, government agencies, nonprofits and individuals
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Management Accountants
Management accountants are members of the executive team who: • Record and analyze information about
budgets, costs and assets• Support strategic planning or product
development• Write financial reports for stockholders,
creditors or government agencies.
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Government Accountants
• Maintain and examine government records
• Audit private businesses or individuals on the government's behalf
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Internal Auditors
• Are fiscal “police officers”• Verify the accuracy of an
organization's financial records• Look for waste,
mismanagement and fraud.
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Job Outlook in Accounting
• CPA accountants will continue to be in high demand, especially as states increase the education and experience requirements for the certification.
• Certified Management Accountants and those with MBAs will also fare well.
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Job Outlook in Accounting
• Having a specialty, such as information systems, government regulation or international business, will help you land a job.
• Those without a degree or certification and those vying for the upper-most echelons of accounting will find keen competition for jobs.
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Education Requirements
• A bachelor's degree is the minimum requirement, and to advance, you'll need additional certification or graduate-level education.
• Those in the accounting field can earn the Certified Public Accountant designation by meeting experience and educational requirements and passing an exam.