1. Introduction to Accounting Unit 1

2. Coming together is the beginning. Keeping together is progress Working together is success - Henry Ford American Automobile Manufacturer

3. You and the World of Accounting Chapter 1

4. Learning Objectives You will be able to : ◦ Describe how personal skills, values and lifestyle goals affect career decisions. ◦ Find information about a variety of careers. ◦ Identify career opportunities in the accounting fields. ◦ Set career goals.

5. Learning Objectives (cont.) ◦ Describe types of businesses and organizations that hire accountants. ◦ Compare for profit businesses and non-profit organizations. ◦ Define the accounting terms introduced in this chapter.

6. Exploring the Real World of Business The World Wildlife Fund ◦ A non-profit organization, works to save endangered species. ◦ Employs accountants, writers, fund raisers, and many other professionals who care about wildlife and their habitats. Review the website: http://www.worldwildlife.org

7. What do you think? 1. What job skills or interest do you think you would need to work for an organization like World Wildlife Fund? 2. What kind of interest do you think would attract someone to such an organization?

8. Exploring Careers Section 1

9. What You’ll Learn How personal interest and skills, values and lifestyle goals affect career decisions Where to find information on possible careers. How to set career goals.

10. Key Terms Skills Values Lifestyle Personality Personal interest tests Networking

11. Job vs. Career A job is simply work for pay A career is built on a foundation of ◦ Interest ◦ Knowledge ◦ Training and ◦ Experience

12. Access Your Career Vision What are your personal interest and skills? What are you values, and how will they affect your career? What lifestyle interest you? How will your personality affect a career choice?

13. Your Interest, Skills, and Traits Skills are activities that you do well ◦ Are you good at math? ◦ Do you write well? ◦ Are you creative? ◦ Do you like to meet lots of people ◦ Do you enjoy building things

14. Skills & TraitsCareers Example Creative ThinkingFine arts and humanity, actor artist or musician Knowing how to learnTraining or Teaching ResponsibilityHealth –related careers FriendlinessHospitality and recreation careers HonestyChild care worker, family and consumer science worker Decision makingFinancial planner, accountant AnalyticalConstruction careers AdaptabilityPublic service careers Self controlEntrepreneur or manager Self-esteemCommunication and media

15. Values Values are the principle you live by and the benefits that are important to you. ◦ Responsibility ◦ Achievement ◦ Relationships ◦ Compassion ◦ Courage ◦ Recognition Many people share the same values, but how they apply them is unique to each person.

16. Lifestyle Goals Lifestyle is how you use you time, energy and resources. ◦ What’s really important to you? ◦ Do you want to go for the big bucks? ◦ Do you want to live in a big city with endless activities or a small town where everybody knows your name ◦ Do you want to work with a group of people, or do you prefer working solo?

17. Personality Traits Personality – a set of unique qualities that makes us different from other people. What is you personality. Are you ◦ Confident ◦ Friendly ◦ Dependable ◦ Funny ◦ Sympathetic

18. Personal Career Profile Form Name DateCareer Your Values Career Values Your Interest Career Duties and Responsibilities Your Personality Personality Type Needed Skills and Aptitudes Skills and Aptitude Required Education/Training Acceptable Education/Training Required

19. Research the Possibilities Guidance counselor can help you identify the things you like to do. One way is through personal interest test. Networking is a way to find out about particular careers by asking people to share information and advice. Print material about every career can be found in your public library. The Internet is a great source of educational and career information Professional organization are groups of people with common career interest.

20. Set Career Goals Map out a plan Education On-the-Job Training Internships

21. Steps to Setting Career Goals 1. Decide on a long-term goal. 2. Decide on actions that will lead to the long-term goal. 3. Take action! 4. Diversify your skills 5. Realize the long-term goal.

22. A Matter of Ethics Padding a resume Part of landing a great job is putting together a resume that effectively represents your skills and background. Imagine that BMW has opened a new regional headquarters in your area. You would like to work for BMW as a payroll clerk, but you are afraid you don’t have the right qualifications. A friend suggests that you “change” your resume to make yourself look better. Ethical Decision Making: What are the ethical issues? What are the alternatives? Who are the affected parties? How do the alternative effect the parties? What would you do?

23. Accounting Careers: The Possibilities Are Endless Section 2

24. What You’ll Learn The variety of career opportunities available to accountants. The type of businesses and organizations that hire accountants

25. Key Terms Accountant For-profit business Not-for-profit business Accounting clerk Certified public accountant Public accounting

26. The Changing Horizon An accountant handles a broad range of responsibilities, make business decisions, and prepares and interprets financial reports. For-profit businesses operate to earn money for their owners. Not-for-profit organizations operate for the greater good. Their goal is balancing their income with expenses. Their income comes from donations and tax dollars.

27. Employment Accounting clerk – an entry level job usually performing one or two accounting task. Certified public accountant pass a national test and meet specific experience and education standards to become “certified” to practice accounting. You might choose to work as a financial consultant in a large company or work for a public accounting firm and provide accounting services for their clients

28. The World of Business Accounting Chapter 2

29. Learning Objective You will be able to: ◦ Describe the role of profit, risk-taking, and the entrepreneur in the US economy. ◦ Describe the difference among service, merchandising, and manufacturing businesses. ◦ Compare the sole proprietorship, partnership, and corporate forms of business organization. ◦ Describe the purpose of accounting

30. Learning Objectives (cont.) ◦ Explain the difference between financial and management accounting. ◦ Describe the three basic assumption that underlie accounting principles. ◦ Define the accounting terms introduced in this chapter.

31. Exploring the Real World of Business Huey’s Athletic Network (HAN) ◦ Uses aquatic therapy to help injured athletes rebuild body strength ◦ Provides personal training and consulting not only to sport star, but also to entertainers and weekend warriors who want to stay fit. Review the website: www.lahuey.com

32. What do you think? 1. What knowledge and special skills do you think Lynda Huey needed to start and manage her business? 2. What makes an entrepreneur successful?

33. Exploring the World of Business Section 1

34. What You’ll Learn Profit and risk-taking. The free enterprise system. Starting and running your own business. Three types of business operations. Three forms of business organization.

35. Key Terms Free enterprise system Profit Loss Entrepreneur Capital Service business Merchandising business Manufacturing business Sole proprietorship Partnership Corporation Charter

36. The Environment of Business Free enterprise system ◦ People are free to produce goods and services as they choose ◦ Individuals are free to use their money as they wish:  Spend it,  Invest it,  Save it, or  Donate it. ◦ Business owners must compete to attract customers to continue operating.

37. The Environment of Business Profit – the amount of money earned over and above the amount spent to operate the business Loss – spending more money on business expenses than is earned. A business has to do two things to survive: ◦ It must operate at a profit. ◦ It must attract and keep an individual willing to take risk to run it.

38. The Environment of Business The need for Profit ◦ You must pay  Raw material  Equipment  Employees  Utilities and rent The need for a Risk-Taker ◦ People play different roles  Investors provide the money  Employees provide the labor  Managers handle supervision and planning  Entrepreneurs transform ideas for products and services into real-world businesses

39. Entrepreneurship: Who Me? ProsCons You are your own boss. You create opportunities for earning money. You create and control your work schedule. You choose the people you serve. You select the people who work with you. You benefit from the rewards of your own hard work. You choose your own work hours. You probably need to work long hours. You lose the security of steady wages and medical benefits an employer provides. You market your own services or products. You pay your own operating expenses. You must be motivated and energetic each day You face the possibility of losing money.

40. Traits of the Entrepreneur Entrepreneur are aware of their environment  No ice cream shop  Does the community want one? Entrepreneur evaluate alternatives  Customer preference  Architect plans  Accountant’s guidance Entrepreneurs seek the best solutions  Only used appliances are within budget guidelines Entrepreneurs turn ideas into action  Ben& Jerry’s is a worldwide producer of ice cream and frozen yogurt

41. Types of Business Operations There are three types of business that operate for profit: ◦ Service business ◦ Merchandising business ◦ Manufacturing business Each type of business needs money to begin and maintain operations Money supplied by investors, banks, or owners of a business is called capital.

42. Forms of Business Organization There are there forms of business organization ◦ Sole Proprietorship ◦ Partnership ◦ Corporation

43. Sole Proprietorship Business owned by one person. The oldest and most common form of ownership The success or failure of the business depends heavily on the efforts and talents of the owner. AdvantagesDisadvantages Easy to set upLimited expertise All profits go to ownerHard to raise money Owner has total controlOwner has all the risks Few regulations to followHard to attract talented employees

44. Partnership Business owner by two or more persons; called partners Partnerships are formed when the need for capital is greater than the amount of money one person can invest. AdvantagesDisadvantages Easy to startConflicts between partners Skills and talents are pooledProfits must be shared More money availableOwners share all risks

45. Corporation Business organization that is recognized by law to have a life of its own. Must get permission from the state to operate. AdvantagesDisadvantages Easier to raise moneyCosts more to start up Easy to expandComplex to organize Easy to transfer ownershipMore regulations Losses limited to investmentsHigher taxes

46. Corporation (cont.) To raise money, shares of stock are sold to hundreds or even thousands of people. These shares represent invest in and ownership of the corporation. Shareholders/Stockholder are the legal owners of a corporation ************* Regardless of the form, all businesses share common financial characteristics and methods for recording and reporting financial charges.

47. Accounting: The Universal Language of Business Section 2

48. What you’ll learn How the accounting system works. Who uses financial accounting reports. Who uses managerial accounting reports. How accounting is used to help make business decisions. What assumptions provide the foundation for accounting systems.

49. Key Terms Accounting system Manual accounting system Computerized accounting system GAAP Financial reports Financial accounting Management accounting business entity Accounting period Going concern

50. The Accounting System The accounting system is designed to collect, document and report on financial transactions affecting the business. In a manual accounting system the accounting is processed by hand. In a computerized accounting system the financial information is recorded by entering it in the computer.

51. The Accounting System (cont.) All accountants used the same set of rules to prepare their reports. GAAP is also known as generally accepted accounting principles. Accounting principles provide a way to communicate financial information in a form understood by those interested in business operations Financial reports are summarized information about the financial status of a business

52. InputProcessingOutputs Source DocumentTasksFinancial and Checks AnalyzingManagement Invoices ClassifyingAccounting Reports Sales Slips Recording Financial condition Receipts Results of operation Investment by and distributions to owners How the Accounting System Works

53. Using Accounting Reports for Making Business Decisions Purpose of accounting ◦ Provide financial information about a business or not-for-profit organization ◦ Provide information to individual in order to make decisions. These two groups use accounting reports ◦ Individuals outside the business who have an interest in the business ◦ Individuals inside the business

54. Using Accounting Reports for Making Business Decisions Financial Accounting focuses on reporting information to external users. ◦ The reports are prepared using GAAP for  Individuals or institutions that loan money to a business, to determine if the business is able to repay the loan  Local, state and federal government agencies for taxing purposes.  Workers, consumers, union leaders and competition are interested in the businesses performance.

55. Using Accounting Reports for Making Business Decisions Management accounting focuses on reporting information to management. Referred to as accounting for internal users Reports are prepared for managers to make decision regarding: ◦ Purchasing, ◦ Hiring, ◦ Production, ◦ Payments, ◦ Sales, and ◦ Collections.

56. Accounting Assumptions These generally accepted accounting principles are based on these assumptions. ◦ Business entity  A business is a separate entity and exist separate of it’s owners personal holdings ◦ Accounting period  For reporting purposes, the life of a business is divided into specific periods of time.  It can be a month, a quarter, or most commonly a year. ◦ Going concern  Accountants assume the business has the ability to survive and operate indefinitely.  It is expected to continue.

57. A Matter of Ethics Becoming an Entrepreneur Imagine that you’ve been working for a local day-care center for several years. You attend a company meeting to discuss new ideas on improving day care. Several new services are discussed that would help your center stand out from it’s competition. You think that this is a great opportunity for you to become and entrepreneur – by opening your own day-care center offering the new services discussed at the meetings Ethical Decision Making What are the ethical issues? What are the alternatives? Who are the affected parties? How do the alternatives affect the parties? What would you do?