Simple Accounting

IntroductionFinancial accounting has always been a very interesting field of study. It has also been a challenging area because the material is not always easy to grasp the first time around. It is imperative that as you study accounting, you get a bigger and bigger picture of the whole accounting cycle. You are going to learn that accounting has to do with gathering, sorting, recording and posting financial information in order to produce the ultimate end product: The Financial Statements. Users of the financial statements include management in a company, government authorities, creditors and investors. The financial statements tell us the results of operations and the financial position of a company at a given point in time. Investors use audited financial statements in order to make decisions as to whether or not to invest their hard-earned money in a company. You, as an accountant, therefore will play a very important role. You will either be involved with processing the raw data that is needed to prepare the financial information that will be used by the general public, or you will be one who will analyze the finish product in order to render an opinion as to the fairness of the information. These individuals are referred to as Auditors. An auditor is still an accountant, however he goes beyond preparing the financial information: he reviews them and decides whether or not they are produced in conformity with certain government regulations that we will talk about in this book. These auditors frequently bear the title of Certified Public Accountant (CPA). You can be an accountant and not be an auditor. However, you cannot be an auditor without first having been an accountant. As long as you can keep in the back of your mind that the ultimate objective of accounting is to produce financial information that will be used by the general public, you will be on the right track and the material will not be so difficult to understand. As you do this, you will also begin