Basics of Accounting for High School Students 2
Hello students! I welcome you to the world of accounting. You might wonder, what’s the point of crunching numbers behind a desk all day? The answer is simple accounting is nothing more than the process of tracking your finances through what’s called debits and credits. Could you imagine a world where you never run out of cash because you always know exactly what you can afford and how to manage things so they never get out of control? Even in your position in high school I’m sure you know what’s like to wonder where all my money went. Through the double entry system of debits and credits and statements such as income statements, balance sheets, the statement of owner’s equity, and the statement of cash flows so you can see exactly what was going on. Now this process doesn’t just affect the individual or in my examples the solitary business. It affects managers, owners, investors, creditors, and the general public or their client base. Managers/Owners use what these statements show in order to make proper decisions in regards to how to expand or what rates they might use in the future. Investors/Creditors use the information to decide if this business or individual is worth their time or whether or not they should lend them money. It’s all about providing accurate and complete information. All this information that we gather and use to complete various statements don’t come without rules, GAAP or Generally Accepted Accounting Principles is a set of rules or guidelines that businesses are required to follow. These rules help us out as accountants because they help to insure that the information that is give out is accurate, timely, a consistently reported. It also helps because those investors that are needed so badly have the ability to review quality financial statements. The advantage to a good accountant is that it will help out quite a bit if you were to get audited. An audit is an inspection of all of a company or an individual’s accounts. Accounting statements however, leaves a trail, showing exactly how the inner workings of a company works, which allows everyone to see exactly what was going on and when. This means that fraud is less likely since a paper trail has been left behind.
Basics of Accounting for High School Students 3
When it comes to how accounting affects you as a personal one specific word comes into play morals. At some point every student here is going to have a job. It’s a basic aspect of life you have to work to survive. Now what were to happen if accountant or accounting department was to be committing fraud? Also, just like in the beginning, we all have to work to survive we also all hope to retire somewhere. Hopefully, I’ll get to on some wonderful tropical island, wouldn’t you like to join me! With that retirement funds are something you have to plan for and more and more people are investing into corporations to be able to amass a bigger savings. In order to do something like that you need some basic accounting knowledge so that you know how to leverage your funds. At some point maybe some of you heard of the Enron scandal. Here you have the 7th largest company in the United States that employed over 20,000 people, seeming like a great investment, and they went under showing that it all was a big scam. They turned out to be extremely in debt and turns out looks as if there was not only fraud but money laundering involved. Now think that means that if you invested money into this company you just lost out on all you income, both that you tried to gain, and what you initially put in. That’s…