Accounting 1 Part I

5 activities of accounting Gathering financial information about the business Preparing permanent records Summarizing financial statements Preparing reports Establishing controls to promote accuracy

What is financial information?

Why are financial statements important?

What do they mean by “controls” Internal Controls Double checking Work efficiency etc. External Controls Not enacted by company but by the government or other organizations Regulations that can potential hinder business/restrict cash flow

What are some reasons to become an accountant? Your thoughts? Do the accounting for your own business Work in an accounting firm as a professional accountant It’s interesting It’s a stable job that pays well

Types of Businesses Service business: sells services (generally, “intangible”, a one-time job) e.g. Barbershop, dentist, gardener, accountant Merchandising business: sells products (generally, physical goods that can be re-used) e.g. Clothing store, grocery store, electronics store

Types of business ownership Sole-proprietorship: The business owner is the same person that runs the business Partnership: Two or three people own the business Corporation: A special form of business. Owners are usually separate from managers.

Accounting activities Daily work: Preparing cheques, recording transactions, processing payments Periodic work: Checking bank accounts, making financial reports, paying taxes

Becoming a professional accountant (CPA, “Chartered Professional Accountant”) Generally takes 24-36 months after receiving a Bachelor’s degree in Accounting Qualifying exam can take up to 3 days to write

Bookkeeping vs. accounting What are the differences? Bookkeeping: Recording transactions, preparing financial reports This introductory course is focused on bookkeeping Accounting: Supervising bookkeepers, analyzing financial reports, making business decisions based on financial reports University accounting courses focus on accounting