gathering financial information about the activities of a business or other organization;preparing and collecting permanent records. Records provide evidence of purchase, proof of payment, details of payroll and so on.rearranging, summarizing, and classifying financial information into a more useable form;preparing information reports and summaries for the following purposes: a. to help management reach decisions; b. to serve the needs of groups outside the business, such as bankers and investors; c. to measure the profitability of the business;5.establishing controls to promote accuracy and honesty among employees.
Every business requires good financial information to make good decisions. By enabling financial information to be gathered and prepared, a good accounting system provides the answers to many questions. For example:Is the business earning enough profit?Are the selling prices of the products high enough?What is the value of all the goods for sale?To whom was cheque No. 333 issued?How much did John Doe earn last year?Are our customers paying their bills on time?
Other persons, companies or organizations might seek answers to the following questions:Should I lend money to this business? (a banker)Should I buy into this business? (a potential investor)Should I sell this business? (owner)Is the business well run? (an absentee owner)Is the company growing satisfactorily? (absentee owner)Can the business afford to pay more to its employees? (labour union)Is the business paying the proper amount of income tax? (government)
Personal BenefitsEveryone requires basic accounting knowledge in their daily lives because money impacts our life in so many ways: budgeting--ensuring our expenses will not exceed income; investments; balancing our cheque book to the bank statement; income taxes; payroll deduction; and mortgages, to name a few. An accounting background will help you with the language of business as well as accounting concepts.
There are many career opportunities available for individuals who obtain a diploma or degree in accounting. Accounting clerks to Accountants. Also, any position within a business requires basic accounting knowledge. Individuals can perform their jobs more efficiently if they understand the language of business -- accounting. This knowledge allows everyone involved in the business to make better decisions. Daily banking Keeping track of the amounts owed by customers producing income statements preparing payroll
Business is growing, entrepreneurialism is growing -- and accounting requirements will grow. Every business must account for its financial activities; and the financial activities determine whether the business grows or even whether the business even continues. Accounting information is critical. Inaccurate accounting records could easily contribute to business failures and a lot of unnecessary stress!
Intro to Accounting Notes
1.1 What is Accounting?
There are 5 Main activities involved
1. Gathering financial information
2. Preparing and collecting permanent records.
3. Rearranging, summarizing, and classifying
4. Preparing information reports and summaries
5. Establishing controls
Accounting Helps Businesses
Is the business earning enough
Are the selling prices of the
products high enough?
What is the value of all the goods
Every business requires
information to make
By enabling financial
information to be
gathered and prepared,
a good accounting
system provides the
answers to many
To whom was cheque No. 333
How much did John Doe earn
Are our customers paying their
bills on time?
Accounting can also help Answer
Other persons, companies or organizations might seek answers to the
Should I lend money to this business?
Should I buy into this business?
Should I sell this business?
Is the business well run?
Is the company growing satisfactorily?
Can the business afford to pay more to its employees?
Is the business paying the proper amount of income tax?
Accounting Records are orderly records of the financial
activities of a business.
Bookkeepers and Accountants both work with Accounting
involves the planning and
keeping of accounting records.
There may be some analyzing
and interpreting involved but
not to the extent of accounting.
Bookkeeping is the
recording, posting , and
proving of the financial data.
Bookkeeping takes place
before accounting takes
is the planning, keeping,
analyzing and interpreting of
Accounting is the
establishing and maintaining
of the entire accounting
system, the interpreting of
the results of the recorded
data, and the assisting in the
management or decision-
making aspects of the
The Accounting Clerk (Bookkeeper)
The work of an accounting clerk is clerical in nature
and mostly concerned with routine matters.
ensures that transactions are properly recorded with
records the accounting entries in the books of account and
balances the ledger
makes payroll calculations, payroll cheques and other
carries out all necessary banking transactions
The work of an accountant is broader is scope and
requires more education and experience.
develops a system to ensure that correct data are entered into the
ensures that generally accepted accounting standards are met
interprets data produced by the accounting system
prepares reports based on data
participates in management meetings
supervises the work of all accounting employees
Bookkeeper or Accountant
Who does the following types of work?
Ensuring that transactions are properly
recorded and supporting documents are present
Carrying out necessary banking transactions.
Developing a system to ensure correct data are
entered into an accounting system.
Recording the accounting entries and balancing
Interpreting data produced by the accounting
Participating in management meetings are
assisting in making business decisions.
Keeping track of financial records – ex. Bank Account
Mortgages and Loans
How can an understanding of accounting be beneficial
to a persons daily life
Amounts owed by customers
Producing Income Statements
How could an understanding of Accounting be
beneficial in many different careers?
Business and Entrepreneurialism is growing
Every business must account for its financial activities
Financial activities determine whether the business grows or
even whether the business even continues.
Accounting information is critical.
Inaccurate accounting records could easily contribute to
business failures and a lot of unnecessary stress!
How important is an understanding of Accounting to
Accounting as a Profession
Canada has 3 national professional accounting organizations
Chartered Accountant (CA)
Certified General Accountant (CGA)
Certified Management Accountant (CMA).
Each profession requires you to complete a prescribed course
usually after you have completed a university degree.
Note: As of January 2013, CA’s and CMA’s have integrated into
one professional group – Chartered Professional Accountants
Canada. CGA’s are joining this group this year.
1. Public accountant
serves the general public for a fee, much like a doctor or
The main type of work done by public accountants is
Auditing is the examination and testing of the books,
records, and procedures of a business in order to be able
to express an opinion about its financial statements.
Two working categories:
2. Professional accountant
may choose industrial or institutional accounting
Industrial accountants work for large companies such as
Ford or Microsoft.
Institutional accountants work for the government, banks,
large insurance companies and similar organizations.
Two working categories: