Question

Topic: Accounting in the real world

The following short essay was published by the Fisher College of Business at the Ohio State University:

The Importance of Accounting in Today’s World

    In the business world, accounting is one discipline of study that all people, regardless of job position, should have some knowledge of. Its concepts can be applied to all job specialties, its importance has been promoted in recent years, and it is useful in people’s everyday lives.

    First, an accounting education is important because it can be applied in all job specialties. Secretaries must use accounting skills to manage the company check book and orders, auditors have to study financial statements to evaluate the accuracy and integrity of the business, and executives need to judge the success of their business using accounting statements from the past and present. These are just a few of the many possible positions where an understanding of accounting is necessary.

    Another reason all business students should have some background in accounting is because in recent years, people in the business world have been held more accountable for their financial practices. Since the Enron and WorldCom crisis when independent auditor Arthur Anderson failed to report illegal accounting practices, the SEC has been monitoring public corporations more closely. Thus, companies require some basic knowledge of accounting to avoid any future misstatements unintentionally occurring.

    Additionally, it is vital that everyone, not just business students, acquire an understanding of accounting for personal benefit. People use accounting in their daily lives when they study financial statements to make investment decisions, assess interest rates to pay off their house mortgages, and calculate rates for car payments. In the business world, accounting is utilized in much greater depth, but each individual encounters some activities in his/her everyday life that requires knowledge of accounting principles. Accounting is the most basic framework of business. Without an accounting education, students would be unprepared for the real world.

Discussion topic:

Based on your study of financial accounting to date, and your personal thoughts on the subject both prior to the course and now one week into it, prepare a discussion post that articulates your thoughts on how accounting currently impacts or relates to your life, and/or your professional or personal goals. In the post include how you can practically apply one or more of the concepts you have learned to date, specific to the basics of financial accounting and financial accounting statements. Feel free to be creative or as personal as you wish in your short essay, taking care to address the required topic.

Answer 1

Various sources of keeping a track on the inflow and ouflow of cash prevail in the market which indeed helps you hold on to them systematically. In the long term, it finds you a way to avoid the unnecessary outflow which indeed seem like an asset but is a liability. For eg. A mobile seem to be an asset but is a liability in your real life of gradualy outflow of cash. Financial accounting substitutes this for liability seeming asset like for eg. paper assets which brings inflow of cash but initially it may seem as a liability.These things personally and professionally helps you which is a major pro of financial accounting

Personally, financial accounting helps you to keep a track on cash inflow and outflow which gradually helps you to get a grip on your financial sources and later on moving to the professional life it helps you to create awareness of various tax benefits to get optimal deduction when filing your tax returns. This way financial accounting helps you to lead a stabilised life.