The wonderful world of Accounting

By: Stephanie Dibble

A little background information• Accounting is a system that businesses and individuals rely on to audit

their financial statements, provide them with tax preparation and tract the flow of a company’s or corporation’s assets, liabilities and equity over a period of time.

• There are different types of accountants. Some specialize in auditing, some in taxes, some are titled as CPA’s (certified public accountant) and some are titled CMA’s (certified managerial accountant).

• All accountants have to follow a system. This system has rules by which accountants operate. This system is called GAAP (Generally Accepted Accounting Principles). These principles are the guidelines for the entire system of accounting.

• Accountants generally work in the offices of firms, companies, the manufacturing industry and corporations. They often travel to different companies to audit there financial statements.

• One principle that guides the system of accounting is a basic equation by which all accounts of a company are tracked. This equation includes asset, liability and equity accounts. The equation is as follows:

QUIZ TIME!

Question 1

• Accountants only audit the financial statements of a company or corporation.-True-False

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Question 2

• Accountants can be:-Tax preparers- Auditors-CPA’s-All of the above

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Question 3

• What does GAAP stand for?-Guidelines for Acceptable Accounting Principles-Guidelines for Applicable Accounting Principles-Generally Accepted Accounting Principles-Generally Applicable Accounting Principles Next

Question 4

• Accountants generally work in offices for companies and corporations. They also may have to travel a lot.-True-False

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Question 5

• The basic accounting equation is Assets = Liabilities + Owners Equity.-True-False

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• Correct!

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