Chapter 1: Accounting Chapter 1: Accounting and Businessand Business

Typically, corporations have billions of dollars. (Apple 156 Billion $ as of September 2013)

Accountants organize the billions of dollars that corporations have.

Accountants handle billions of dollars, which is not their own money, but they are responsible for that money.

What is accounting?What is accounting?

Accountants have to make sure that nobody steals the company’s money.

Accountants have to make sure that companies prepare accurate financial statements for investors and lenders. (document which shows how successful and how healthy this company is)

What is accounting?What is accounting?

Accounting is About: Money:• Of course! That said, it’s about so

much more than just the bottom line• Corporate social responsibility (in

other words, accountants make sure that corporation acts responsibly.)• It’s about knowing the ins and outs

of money management so you can enjoy your life, give back to the world and retire in style

Accounting is About: The Economy:• No business can survive without

accounting (if people ignore accounting rules and procedures then nobody will invest or lend out money, so the national economy will suffer!)

Business/Management:• Accounting and Business are closely

connected. Two cannot exist without the other and an accountant cannot be successful without knowing the basics of Business Management

Lenders:• Before lending their money to

companies, bankers (or lenders) must assess and evaluate the profitability and health of the company, so lenders will have to use accounting information. • Lenders will lend their money only if

they feel confident that the company will be able to pay back the principal and interest in the future.

Users of accounting informationUsers of accounting information

Managers:

• Hired by the owners of the business to manage the day to day operations

•Many managers use accounting information to evaluate their employees. For example, city manager would use accounting information to evaluate branch manager’s performance.

Users of accounting informationUsers of accounting information

Owners:

• They invest their own money into the business – want the business to be successful or profitable (they would examine the income statement)

• Owners also want to evaluate their managers., so they use accounting information.

• Especially when they want to buy or sell businesses, they need accounting information.

Users of accounting informationUsers of accounting information

Chartered Accountant with 5 years (or more) experience make about $90,000 to $150,000.

If you become a partner in CA firm, you will make any where from $200,000 to $1 million.

Some Cool Accounting Facts!Some Cool Accounting Facts!

Computers and technology will never take over the hands-on nature and analysis aspect of the accounting industry

The average starting salary for an accountant with a Bachelor of Business Administration (BBA) Degree lies between $45,000 - $58,000 (if you had co-op experience then you make close to $58000)

Some Cool Accounting Facts!Some Cool Accounting Facts!

Chartered Accountant with 5 years (or more) experience make about $90,000 to $150,000.

If you become a partner in CA firm, you will make any where from $200,000 to $1 million.

Some Cool Accounting Facts!Some Cool Accounting Facts!

Accounting as a job:•Many jobs require accounting and

clerical skills Owning your own business:• The ability to keep accurate records is

necessary part of running a successful small business

Daily Life:• An accounting background helps you

understand the business world and handle your own day to day affairs more efficiently.

Why Study Accounting?Why Study Accounting?

Professional Accountancy:• Completing a professional

accounting program (such as CA, CPA, CGA and CMA) can help you attain senior management positions in a company and lead to a career in public accountancy

Why Study Accounting?Why Study Accounting?

You have to the rest of the period working on the assignment you started yesterday.

If you are done, then work on the textbook questions: Review Questions pg. 12• #1, 3, 4 and 5

Textbook time! Textbook time!