UNIT 1 INDIVIDUAL PROJECT

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ACCOUNTING 205
PROFESSOR KARINA KASZTELNIK
March 26, 2012

When you hear the word accounting what comes to your mind? Is it a scene of an old woman sitting at a desk with a spreadsheet and a calculator? Or is it depicted in your mind as something a CPA is certified to do? Let’s conquer your confusion about accounting and bring to surface the importance of the subject matter.

Accounting is described as “a systematic recording, reporting, and analysis of financial transactions of a business”, according to nysscpa.org. Accounting allows a company to be mindful of a businesses’ financial performance. When diving into the world of accounting there are objectives to keep in mind when talking about this money driven world called accounting. Now the objectives of accounting are : 1)Maintenance of Records of Business Transactions, 2) Calculation of Profit or Loss, 3) Depiction of Financial Position, and 4) Providing Information to the Users.

MAINTENANCE OF RECORDS OF BUSINESS After you record it, then you must pay! If there is any type of error, you are able to trace or correct it from your detailed records. Our memory as human is short and sadly gets shorter the older we get so not keeping a complete and accurate record for even the best of executives or managers could mean loss in profit and even cause destruction in a business.

CALCULATION OF PROFIT OR LOSS Every bit of profit is the sole purpose for which a business is built and carried on. This beloved information can be found from the profit and loss statement.
DEPICTION OF FINANCIAL POSITION When viewing a balance sheet it depicts the financial position of an enterprise or business. It’s a statement of assets as well as liabilities. It shows the resources (assets) owned by an enterprise or business and depicts the