By: Mae Sejour
American InterContinental University
Unit 1 IP
October 7, 2012
This paper will be giving in details the main objectives of accounting, the basic terminology of accounting process, the job responsibilities of an accountant to individuals and businesses, the part technology play in a business and how accounting can affect my personal life; stressing accounting role in professional ethics.
Accounting principles, known as Generally Accepted Accounting Practices (GAAP) guidelines, which are the procedures and rules that companies must follow when reporting financial data (Cusumano, 2003).
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Objectives are something toward which effort is directed, a goal, an aim or end of action (Vanbreda, 2012). The principal objectives of accounting are record of liabilities and assets. The first being disclosure, which is important in every accounting department; the disclosure of different kinds of financial statements in all business department are required by GAAP guidelines be prepared and issued for public knowledge. Like the balance sheet; this financial statement reveals the value and price of the company, which is the end result (Riese, 2012). The next objective is financial standing, this shows how much the company has earned at the present time and during the past year; how much they have; if they are improving; if they are in debt and the amount that is under obligation to be repaid from other business. This would help in decision making to determine whether the business is worth investing in; another objective is the financial planning. Since the company is knowledgeable of their financial standing, they can determine where to spend money and what expenses that can be reduced, which leads into the last objective; assets and liabilities. This displays how to bring in profits, how to be cost effective in production and how to use cost effectiveness to increase sales. Assets that are not helping can be vended off and liabilities are solved. In addition, the government is a purpose of accounting, every company needs to be under some system to ensure that the guidelines are being following and no illegal actions are being carried out (Owen, 2010).
The most important terminology of accounting process is debit and credit. Debit is a transaction of value added to an account and a credit is a transaction of value removed from an account, which is recorded to all business transactions; how you apply the transactions, depends on the type of account you are working with. Also, I would explain to them the dissimilar types of accounts in the accounting system which is assets, an account that adds value; liabilities, account that removes value; equity identifies a person contribution of money invested; revenue tracks all of the income that is generated and expenses which is an account that is setup to record the financial transactions that occur as expenditure in generating income (Owen, 2010).
Accounting has affected my personal life on a day-to-day basic when I am determining to buy differs things with cash, debit or on credit; recording the data correctly to maintain a balance account book on what was added and what was subtracted. Also it affected my life by emphasizing on professional ethics that shows that I am honest when it comes to filing my income taxes and assisting others in preparing their income taxes.
A number of significant...