4.01 Accounting and Finance

What is Accounting? Method of reporting financial activity of a business Financial transactions recorded in an orderly fashion

Accounting Equation Assets = Liabilities + Owner’s Equity

Assets Anything of Value owned by the Business Cash / Accounts Receivable Office Equipment Building / Real Estate Company Cars Office Furniture Office Supplies

Liabilities Money owed by the business Accounts Payable Mortgage Payable Office Supply Store Utilities Corporation Taxes Due

Financial Statements Written reports that describe the financial health of a company; prepared regularly on quarterly and annual basis.  Balance Sheet  Income Statement  Statement of Change in Owner’s Equity

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

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)

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.

Accounting Activities related 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?

Banking Activities occur 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?

Finance Activities are 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?

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

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

Check your understanding! 1.ASSETS = LIABILITIES + OWNER’S EQUITY. a.Payroll Record b.Budget c.Accounting Equation 2.Money owed by the business (debts, accounts payable) a.Revenue b.Liabilities c.Assets

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

Check your understanding! 1.ASSETS = LIABILITIES + OWNER’S EQUITY. a.Payroll Record b.Budget c.Accounting Equation 2.Money owed by the business (debts, accounts payable) a.Revenue b.Liabilities c.Assets 3.Anything 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

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

Public Accountants Perform audits Prepare taxes for corporations, government agencies, nonprofits and individuals

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.

Government Accountants Maintain and examine government records Audit private businesses or individuals on the government's behalf

Internal Auditors Are fiscal “police officers” Verify the accuracy of an organization's financial records Look for waste, mismanagement and fraud.

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.

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.

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.

4.02 Understand business management activities and careers.

Business management is the direct control of a business or enterprise. It means working with people and using resources effectively and efficiently to accomplish organizational goals.

Who performs management functions? Every business, large or small has managers. Their overall job is to make sure that the organization meets its goals and obligations.

Levels of Business Management (Managers) 1. Top-level Managers 2. Middle-level Managers 3. First-line Managers OR Supervisory Managers (sometimes called operational managers)

1. Top-Level Managers: Set goals Plan for the future Examples  President  Vice president  CEO Top-level managers usually consist of a small group of people or even one person.

2. Middle-level Managers Carry out the decisions of top- level management. They are responsible for Planning and controlling an operation. Examples  Plant managers  Department heads

3. First-Line Managers: Direct the day-to-day activities of operational employees. Examples  Supervisors  Team Leaders  Coaches  Unit Coordinators

PLANNINGPLANNINGORGANIZINGORGANIZING LEADING CONTROLLING Business management activities are classified as one of the four functions of management. Four Functions of Managers

1. Planning Setting company goals Deciding what must be done (Top-level managers), Deciding who will do what Deciding how the work will be grouped, and Why is planning important?

2. Organizing  Assigning managers different tasks  Coordinating activities.  Knowing what the other managers are doing Why is organizing important?

3. Leading  Creating a vision for the company  Setting standards  Communicating company goals to employees  Providing guidance  Resolving conflict among employees How does Leading help a business?

4. Controlling  Keeping the company on track  Making sure all goals are met. How does Controlling help the business? Check your understanding! Which of the four management functions do you think you could BEST perform? Why?

Check your understanding! The FBLA president falls under which level of management?

4.02 PowerPoint Part II  4.02 Understand business management activities and careers.

If You Like: Business Numbers Organizing things

Then you might consider a career in: Business Management.

Factors That Will Affect Your Career  Education  Where You Want To Work (Workplace)  The money you want to make (salary)  The things you do on your job (job duties)

Education & Salary  Different jobs require different education levels. For example:  A File Clerk may only need to have a High School Diploma but  A Manager may need a Bachelors’ Degree  Generally, the more education you have the more money you will earn.

Types Of Education  High School Diploma  High School Career and Technical Education/Training  On the Job Training  Apprenticeship  Bachelors’ Degree  Masters’ Degree  PhD (Doctorial Degree)

Work Description  What you would be required to do on the job.  Your job duties. For example:  A Receptionist will answer the phone.  A Supervisor is responsible for directing the day-to-day activities of employees.

Choosing Your Workplace The kind of activities you do will impact the career you choose and place you work!

What Is The Occupational Outlook Handbook?  The Occupational Outlook Handbook lists various information on hundreds of different types of jobs—such as Administrator and Manager. It is available online and in hard copy.

The Occupational Outlook Handbook Tells:  The training and education needed  Earnings  Expected job prospects  What workers do on the job  Working conditions  Job search tips  Links to job markets in the each state & more

Some Business Management Careers  Administrative Services Manager  Construction Manager  Education Administrators  Farm Operations and Manager  Funeral Director  Loan Officers and Counselors  Health Service Manager  Hotel Manager  Human Resources (HR) Manager  Public Relations Manager