Accounting — often called the language of business — is the process of recording, classifying, reporting and analysing financial data. And while the accounting requirements of every business vary, all organisations need a way to keep track of their money.

Unfortunately, there’s very little that’s intuitive about accounting. Many small businesses hire accountants to set up and keep their books. Other companies use accounting software like QuickBooks, CheckMark Multi-Ledger and M.Y.O.B. Accounting and keep their accounting functions in house.

It’s All about Balance
Using a system of debits and credits, called double-entry accounting, accountants use a general ledger to track money as it flows in and out of a business. They record each financial transaction on a balance sheet, which provides a snapshot of a business’s financial condition. Accountants record every financial transaction in a way that keeps the following equation balanced:

Assets = Liabilities + Owner’s Equity (Capital)

The Accounting Cycle
Accounting is based on the periodic reporting of financial data. The basic accounting cycle includes:

• Recording business transactions. Businesses keep a daily record of transactions in sales journals, cash-receipt journals or cash-disbursement journals.

• Posting debits and credits to a general ledger. A general ledger is a summary of all business journals. An up-to-date general ledger shows current information about accounts payable, accounts receivable, owners’ equity and other accounts.

• Making adjustments to the general ledger. General-ledger adjustments let businesses account for items that don’t get recorded in daily journals, such as bad debts, and accrued interest or taxes. By adjusting entries, businesses can match revenues with expenses within each accounting period.

• Closing the books. After all revenues and expenses are accounted for, any net profit gets posted in the owners’ equity account. Revenue and expense accounts are always brought to a zero balance before a new accounting cycle begins.

• Preparing financial statements. At the end of a period, businesses prepare financial reports — income statements, statements of capital, balance sheets, cash-flow statements and other reports — that summarize all of the financial activity for that period.

The Importance of Financial Statements
At the end of a period — either annually or more frequently, depending on the length of a business’s accounting cycle — accountants create financial statements that show the financial health (or decline) of a business.

Many people inside and outside a company use the information found in financial statements. Business owners and managers use the data in financial statements to chart the course of their companies, project revenues and expenses, monitor cash flow, keep tabs on costs and plan for the future. Present and prospective employees also want to see their employers’ financial performance.

Stockholders and investors closely examine financial statements to check a company’s performance. They want to compare a business’s financial statements with those of other companies to guide their investment choices. Bankers look at a company’s most recent financial statements when they make lending decisions.

Financial statements also make it easier to for accountants to prepare tax returns and report financial information to the Internal Revenue Service. In fact, so many business partners, investors, and other interested parties rely on your these documents that it’s important to get a handle on all the common financial reports your business will be expected to produce.

If you are interested in learning more about Accounting Basics and developing an understanding and appreciation of the importance of record keeping, check out our web-based course Accounting Basics.

Reference: AllBusiness

It’s been a crazy few months between banks and stock markets and the big recession that is slowly gripping the world.  In an atmosphere like this it is up to everyone to improve their employability and career prospects by learning new skills and upskilling.  You don’t need to wait until your employer arranges this or even leave it so late that your social welfare officer arranges it.  Take the initiative and seek out the training that can make a difference for you.  If you want to keep up with the times, your old skills must be continually sharpened and new ones must be acquired.

Always keep in mind the following:

• There is no such thing as “Finished Learning.” One who stops learning, stops growing.  Work hard towards sharpening your Foundation and Transferable skills.  It pays to spend some time sharpening your axe before attempting to fell a tree.
• Keep an eye open for new skills and master them. At the same time, improve the ones you already have.
• Do some research to find out what skills are and will always be most valued in your industry.  Two sites that may help you here are ‘A Career Guide to Industries’ and ‘Tomorrow’s Jobs’.

Issues that people typically have include the following:

What can I do? – You can do whatever you want to. Right from cooking to eating, you will find information pertaining to any interest that you may have.

Where to look? – Keep your eyes and ears open. There’ll always be something happening in your locality to match your interest.

Universities/Colleges: – Usually, universities and colleges have clubs, societies and student groups which bring together students with similar interests. You can be sure to fit into at least one of them and learn from those who have more experience than you and build networks.

Leisure Centers & Gyms: – These are places where you will find people who like physical activity like hiking, swimming and traveling.

Evening Classes: – Collect details of all evening courses conducted in your area. Learn a language you don’t know, or get trained to do creative things like sewing or origami.

Volunteering: – Though not as glamorous as a lot of other things, the feel-good factor is immensely high! Giving something back to society is an amazing way to boost your morale. And of course, it looks impressive on your CV too and can be used to reinforce your skills and validate new ones.

Distance and Online Learning: – If you prefer to spend more time at home and if that’s the only hindrance you are facing to learning new skills, this is perfect for you. Learn Skills is one of the places where you can start hunting for relevant information about courses and as for online courses, it is the best place to start looking for what you want with a very comprehensive range of courses that cover both skills and compliance based training.  If you have any specific needs you can contact Learn Skills.

Source: CvTips.com article “Learn New Skills”.