The World of Business and Accounting You and the World of Accounting chapter 1 & 2 The World of Business and Accounting You and the World of Accounting

Jobs in Accounting Accounting – The act of identifying, tracking, analyzing, and planning financial transactions. Accounting Clerks – entry-level job that can vary from specializing in one part of the system to doing a wide range of tasks within the accounting department Accountant – handles a broad range of responsibilities, makes business decisions, and prepares and interprets financial reports Certified Public Accountant – an accountant who has met certain education and experience requirements and passed a national test Networking – making contacts with people to share information and advice One way to assure that you will be employable after college is to get a specialty degree. It will allow you to get jobs that require any generic degree but sets you apart for specialized jobs like accounting. Even if you get a job that doesn’t require an accounting degree like a clerk and you work there for many years and love it and are good at it, you will not be allowed to take over the accountant’s position without an accounting degree. Accounting skills are needed in many positions, even those not considered financial. Many department managers have to manage their department budgets and understand its impact on the company as a whole.

Who Makes a Good Accountant? Personality – a set of unique qualities that makes us different from all other people Skills – activities that you do well, they usually come naturally or with little effort Values – the principles you live by and the beliefs that are important to you Lifestyle – the way you use your time, energy, and resources Anyone can be an accountant but not everyone should be. Any career choice should be motivated by your personality, skills, values, and lifestyle. Not just one combination of these traits makes a good accountant but the combination of them can make for a happy career/work life or one that is unfulfilling and unsatisfying. Personality – are you: confident, dependable, funny, friendly, sympathetic, outgoing, introverted, honest? Do you like being with people or prefer to spend your time with one or two close people? Do you like computers, books, sports, art, etc. Skills – math, spelling, athletics, drawing, geography, facts, problem solving, conflict management Values – actions we take to express our commitment to an idea. The things we feel are important. Being charitable, education, politics, freedoms, responsibility, achievement, relationships, compassion, courage, recognition, money, God Lifestyle Goals – playing sports, playing video games, traveling, volunteering, praying, studying, reading

Types of Organizations that Need Accountants For-Profit Business – operates to earn money for their owners Profit – the amount of money earned over and above the amount spent to keep the business operating Loss – spending more money than earned Not-For-Profit – operate for purposes other than making a profit Public Accountant (Firm) – provides clients a variety of accounting services including the independent audit, financial planning , and tax return preparation Audit – the review of a company’s accounting systems and financial statements to confirm that they follow generally accepted accounting principles

Do the Math – pg 12 Congratulations! The good news is that you’ve decided to attend a local community college after high school. The bad news is that tuition for an 18-week semester is $1,820. You estimate travel expenses of $20 per week and $300 for books and supplies. You plan to work 20 hours a week, earning $6.75 per hour, and you will apply all your paychecks toward college expenses. Social Security and income taxes will take about 15% of your earnings. What is the total cost for a semester? Assume that you have already saved $300 toward your first semester’s costs. Approximately how long will it take to save enough to cover our tuition and books for one semester?

https://www.youtube.com/watch?v=QdbwTqACb8w

Businesses Need Accountants Free Enterprise System – freedom to produce the goods and services chosen by the business owner based on consumers’ right to choose from the selection offered Entrepreneur – a person who transforms ideas for products or services into real-world businesses Accounting System (Manual and Computer) – designed to collect, document, and report on financial transactions affecting the business Generally Accepted Accounting Principles (GAAP) – set of rules for preparing financial reports put out by The Financial Accounting Standards Board (FASB) and followed by all accountants Financial Reports – summarized information about the financial status of the business (used to make internal and external decision about the company) Accounting Period – period of time covered by an accounting report Going Concern – the idea that the business intends to continue operating Do 2-5 together in class

Business Organizational Structures Sole Proprietorship – a business owned by one person (easiest to start due to little or no legal paperwork) Partnership – a business owned by two or more persons who agree to operate the business as co-owners Corporation – a business recognized by law to be a business entity (not connected to any one individual or group of individuals) Charter – legal permission given by the state in which the business operates which also lays out the rules under which the corporation is to operate Capital – money supplied/owned by the business used to startup, maintaining day to day operations and paying business owner(s) Do 2-7 together in class

Types of Businesses Service Business – provides a needed service for a fee Merchandising Business – buys finished products and resells them to individuals or other businesses Manufacturing Business – buys raw materials, uses labor and machinery to transform them into finished products, and sells the finished products to individuals or other businesses Do 2-4 together in class

Reporting Financial Information Financial Accounting – focuses on reporting information to external users (those not involved in the) day to day operations of the business Management Accounting – focuses on reporting information to management and internal users of the accounting information

Do the Math pg 32 Suppose that you bought 500 shares of Pinewood Dairy Corporation for $39 per share several months ago. Yesterday you sold 200 of the shares at the current price of $45 per share. How much money did you gain or lose on the shares you sold? What was the gain or loss per share? Based on the price of $45 per share, what was the market value of your remaining shares yesterday?