Accounting Speech By Jill A. DeBonis American InterContinental University Online ? Abstract In this essay I hope to explain the more common terms used in accounting. A small biography of why I love accounting. And how technology (computers) has helped create a much easier way of life for accountants.? Accounting Speech What is the definition of an accountant? Someone who solves a problem you did not know you had in a way you don’t understand (n. a. 2011). Does that sound about right for a definition for an accountant?
Well there is an explanation for everything an accountant does, and some of it may not make sense to some of us, but to an accountant it all makes perfect sense. To begin with let us start with a few accounting terms. There are four assumption terms. The first term will be the meaning of the word accounting, the process of identifying, measuring, and communicating economic information to permit informed judgments and decisions (Godwin, Alderman, 2010). This will bring us to assumptions used by accountants; economic entity assumption means accountants can separate business financials from personal financials (Godwin, Alderman, 2010).
The next assumption is a time period assumptions. Accountants use this assumption for economic information to become meaningful over short periods of time (Godwin, Alderman, 2010). Monetary assumptions are used for communicating economic activity (Godwin, Alderman, 2010). The last assumption is going concern assumption; this assumption is used to see that a company will operate on the foreseeable future (Godwin, Alderman, 2010). An accountant needs to understand what revenue, revenue recognition principle, an expense, and matching principles are (Godwin, Alderman, 2010).
Revenue is increasing recourses from the sale of goods or provision of services (Godwin, Alderman, 2010). The revenue recognition principle means revenue should be recorded when it is earned (Godwin, Alderman, 2010). An Expense is when recourses decrease when from sales or provisions being used (Godwin, Alderman, 2010). The last of these is the matching principle, and this means that expenses should be recorded in the period they were used to generate revenues (Godwin, Alderman, 2010).
We will now look at an income statement and this looks at what expenses and sales are being recorded for a certain period of time (Godwin, Alderman, 2010). On a balance sheet you will find such things like assets, cost principle, liability, and equity, and contributed capital (Godwin, Alderman, 2010). An asset is that is measurable that results from a prior transaction and will provide financial benefits (Godwin, Alderman, 2010). The cost principle is a recording of the price paid, not the market value of the asset (Godwin, Alderman, 2010). A liability is an expense incurred by the business (Godwin, Alderman, 2010).
Equity is the difference between an asset and a liability (Godwin, Alderman, 2010). Contributed capital is assets taken from investors (Godwin, Alderman, 2010). Now I will talk about a few different statements. The first statement that is used is the statement of retained earnings; this is used to record financial changes in a company’s retained earnings over a certain period of time (Godwin, Alderman, 2010). The statement of cash flows is a statement used to report a company’s sources and uses of cash over a certain period of time (Godwin, Alderman, 2010).
Accounting is a way of life for me. I was told as a young child that numbers never lie and they do not, they either add up or they do not. If the numbers add up then you have done a good job and can go home, but… if they do not add up be prepared to stay and work it out until they do add up. With today’s technology accounting has become a much easier way to work the numbers. The computer has become a necessity in today’s accounting world. Not so many years ago accountants worked all the numbers by hand, adding and subtracting with only the brain.
Now we have programs that will do it all for the accountant. So if the numbers do not work themselves out you can figure where it went wrong much easier then how they had to work it out fifteen years ago. I hope you all learned something about accounting in today’s lecture and I wish you all the luck and happiness in your career choice. Thank you for being such an attentive audience. ? Resources Godwin, N. , (2010). Financial ACCT, 2010 Edition. Financial Accounting. Mason: Cengage Learning. N. A. (2011). Retrieved from http://www. groco. com/readingroom/humor. aspx