4.01 accounting and finance

4.01 Accounting and Finance

What is Accounting?

• Method of reporting financial activity of a business

• Financial transactions recorded in an orderly fashion

Accounting Equation

Assets =Liabilities +

Owner’s

Equity

AssetsAnything of

Value owned by the

Business

Cash / Accounts Receivable Office

Equipment

Building / Real Estate

Company Cars

Office Furniture

Office Supplies

LiabilitiesMoney owed by

the business

Accounts Payable

Mortgage Payable Office Supply

Store Utilities Corporation

Taxes Due

Financial Statements• Financial Statements

• Written reports that describe the financial health of a company; prepared regularly on quarterly and annual basis.

Balance SheetIncome StatementStatement of Change in Owner’s

Equity

Financial Statements, cont.• Balance Sheet

• Reports assets, liabilities, and owner’s equity on a certain date

• Assets• Anything of value

that is owned by the business.

• Liabilities• Money owed by

the business (debts, accounts payable)

• Owner’s Equity• Net worth of the

business

Financial Statements, cont.• Income Statement

• Financial Statement of a business that reports the revenue, expenses and the net income (loss) of a business for the fiscal period.

• Revenue• Amount of money

that a company earns

• Expenses• Costs of maintaining

and operating a business.

• Income/Profit• Results when a

business’s income is greater than its expenses.

• Loss• Results when a

business’s expenses are greater than its income.

• Fiscal Period• Specific period of

time covered by an accounting statement or report (1 month or year)

Financial Statements, cont.• Statement of

Change in Owner’s Equity • Financial Statement

of a business that reports the changes that have occurred in the owner’s equity account during the fiscal period.

Accounting Activitiesrelated to orderly record-keeping of financial information • Recording daily

transactions

• Preparing financial statements

• Paying bills

• Preparing payroll checks

• Preparing tax forms

• Auditing financial records• Examining financial

records for accuracy and compliance with regulations

• Reconciling the checkbook• Bringing the checkbook

into agreement with bank statement

• What are other accounting activities?

Banking Activitiesoccur in banks, credit unions and savings and loans

• Accepting deposits and processing withdrawals

• Preparing money orders and cashiers checks

• Opening new accounts for customers

• Processing loan applications

• What are other banking activities?

Finance Activitiesare related to investments and managing finances • Analyzing budgets• Buying and selling

stock and other securities

• Consulting with businesses on financial matters

• Counseling investors• Selling insurance

• Managing the finances for the entire company

• What are other finance activities?

Finance Careers• Financial Manager

• Top level professional who may have final responsibility for aspects of a business’ financial activity

• Accountant• Professional who

produces and examines financial records, prepares financial reports and tax returns; may give budget, tax or investment advice to company/customer

Finance Careers, cont.• Certified Public Accountant (CPA)

• Accountants who meet specific educational requirements and pass a national examination

• Auditor• Professional whose work involves checking on

the accuracy of work completed by bookkeepers and accountants

• Bank Teller• Bank employee who handles deposits,

withdrawals, selling travelers check, accepting loan payments, preparing money orders

Check your understanding!

1. ASSETS = LIABILITIES + OWNER’S EQUITY.

a. Payroll Recordb. Budgetc. Accounting Equation

2. Money owed by the business (debts, accounts payable)

a. Revenueb. Liabilitiesc. Assets

3. Anything of of value that is owned by the businessa. Revenue

b. Loss

c. Assets

4. Net worth of the businessa. Liabilities

b. Owner’s Equity

c. Revenue

Check your understanding!1. ASSETS = LIABILITIES + OWNER’S EQUITY.

a. Payroll Recordb. Budgetc. Accounting Equation

2. Money owed by the business (debts, accounts payable)a. Revenueb. Liabilitiesc. Assets

3. Anything of value that is owned by the businessa. Revenueb. Lossc. Assets

4. Net worth of the businessd. Liabilitiese. Owner’s Equityf. Revenue

4.01 ACCOUNTING CAREERS

WHAT DO ACCOUNTANTS DO?

Track companies’ expenses Prepare, analyze and verify financial documents

Look for ways to run businesses more efficiently

Keep public records Make sure taxes are paid properly

PUBLIC ACCOUNTANTS Perform audits Prepare taxes for corporations, government agencies, nonprofits and individuals

MANAGEMENT ACCOUNTANTSManagement accountants are members of the

executive team who • Record and analyze information about budgets, costs and assets

• Support strategic planning or product development

• Write financial reports for stockholders, creditors or government agencies.

GOVERNMENT ACCOUNTANTS

Maintain and examine government records

Audit private businesses or individuals on the government's behalf

INTERNAL AUDITORS

Are fiscal “police officers” Verify the accuracy of an organization's financial records

Look for waste, mismanagement and fraud.

JOB OUTLOOK IN ACCOUNTING CPA accountants will continue to be in

high demand, especially as states increase the education and experience requirements for the certification.

Certified Management Accountants and those with MBAs will also fare well.

JOB OUTLOOK IN ACCOUNTING

Having a specialty, such as information systems, government regulation or international business, will help you land a job.

Those without a degree or certification and those vying for the upper-most echelons of accounting will find keen competition for jobs.

EDUCATION REQUIREMENTS

A bachelor's degree is the minimum requirement, and to advance, you'll need additional certification or graduate-level education.

Those in the accounting field can earn the Certified Public Accountant designation by meeting experience and educational requirements and passing an exam.

4.02 PowerPoint Part I

4.02 Understand business management activities and careers.

What is business management?Business management is the direct control of a business or enterprise. It means working with people and using resources effectively and efficiently to

accomplish organizational goals.

Who performs management functions?

Every business, large or small has managers. Their overall job is to make sure that the organization meets its goals and obligations.

Levels of Business Management (Managers)

1. Top-level Managers2. Middle-level Managers3. First-line Managers OR

Supervisory Managers (sometimes called operational

managers)

1. Top-Level Managers:• Set goals • Plan for the future

Examples President Vice president CEO

Top-level managers usually consist of a small group of people or even one person.

2. Middle-level Managers• Carry out the decisions of top-level management. They are responsible for

• Planning and controlling an operation. Examples

Plant managers Department heads

3. First-Line Managers:• Direct the day-to-day

activities of operational employees.

Examples Supervisors Team Leaders Coaches Unit Coordinators

PLANNING ORGANIZING

LEADINGCONTROLLING

Business management activities are classified as one of the four functions of management.

Four Functions of Managers

1. Planning• Setting company goals • Deciding what must be done

(Top-level managers), • Deciding who will do what • Deciding how the work will be

grouped, andWhy is planning important?

2. Organizing Assigning managers different tasks

Coordinating activities. Knowing what the other

managers are doing

Why is organizing important?

3. LeadingCreating a vision for the companySetting standards Communicating company goals to employees

Providing guidanceResolving conflict among employees

How does Leading help a business?

4. Controlling Keeping the company on track Making sure all goals are met.

How does Controlling help the business?

Check your understanding!Which of the four management functions do you think you could BEST perform? Why?

Check your understanding!The FBLA president falls under which level of management?

4.02 PowerPoint Part II4.02 Understand business

management activities and careers.

If You Like:BusinessNumbers Organizing things

Then you might consider a career in:

Business Management.

Factors That Will Affect Your CareerEducationWhere You Want To Work

(Workplace)The money you want to make

(salary)The things you do on your job (job

duties)

Education & SalaryDifferent jobs require different education levels.For example:

A File Clerk may only need to have a High School Diploma but

A Manager may need a Bachelors’ Degree Generally, the more education you have the more

money you will earn.

Types Of EducationHigh School DiplomaHigh School Career and Technical

Education/TrainingOn the Job TrainingApprenticeshipBachelors’ DegreeMasters’ DegreePhD (Doctorial Degree)

Work DescriptionWhat you would be required to do

on the job. Your job duties.For example:

A Receptionist will answer the phone.

A Supervisor is responsible for directing the day-to-day activities of employees.

Choosing Your Workplace

The kind of activities you do will impact the career you choose and place you work!

What Is The Occupational Outlook Handbook?

The Occupational Outlook Handbook lists various information on hundreds of different types of jobs—such as Administrator and Manager. It is available online and in hard copy.

The Occupational Outlook Handbook Tells:

The training and education needed Earnings Expected job prospects What workers do on the job Working conditions Job search tipsLinks to job markets in the each state &

more

Some Business Management Careers

Administrative Services Manager

Construction Manager

Education Administrators

Farm Operations and Manager

Funeral Director

Loan Officers and Counselors

Health Service Manager

Hotel ManagerHuman Resources

(HR) ManagerPublic Relations

Manager