Accountancy is
a branch of science that deals with financial aspect of a business. Mostly,
accounting deals with record keeping, analysis of business information,
interpretation of financial information and dissemination of accounting
information of a company to business owners and other people who has an
interest with the company.
Accountancy is a broad subject and has many
branches such as financial accounting, which enables business owners to have an
overview of the state of the business; cost accounting, which deals with
identifying, gathering and tracing of cost information to cost objects;
management accounting, which is almost similar to cost accounting; auditing,
which deals with the company’s credibility in terms of its financial
information; and taxation, which is known as the extension of business law.
In Singapore,
basic accounting course is being offered by different institutions. This
course teaches the fundamental accounting principles and can be taken by people
who has no prior background of accounting or bookkeeping. In addition to that,
any person who wanted to gain some knowledge on the aspects of basic accounting
can enroll to this course.
What will
I learn in basic accounting?
Income
statement
Income statement is a financial record that
shows how profitable a business is during a specific period. This period can be
a week, a month, or a year. The income statement shows two things: the revenue
(or the amount that was earned) and the expenses. You’ll learn how to create
income statements through basic
accounting courses.
Balance
Sheet
Balance sheet is a financial statement that
shows the company’s assets, liabilities and stockholders’ equity during a
specific period.
Assets are the things that company owns or the
resources of the company. Accounts receivable and prepaids are also assets of
the company.
Liabilities are things that the company has not
been paid for or are the amounts that the company owed to others. Examples of
liabilities are loans, the interest of the loan and wages.
Equity
The third section of a balance sheet of a
corporation is called stockholders’ equity, whereas those of a sole proprietorship
is called owner’s equity. Simply put, equity is the difference of assets minus
its liabilities or what is often called the book value.
Stockholders’ equity tackles concepts such as
common stock, paid-in capital in excess of par value-common stock, preferred
stock, retained earnings, treasury stock and current year’s net income.
Statement
of Cash Flow
The statement of cash flow shows the cash
generated and the cash used by the company’s operating activities, investing
activities and financing activities.
Double-Entry
System
Double-entry system is a record based on the
fact that every transaction has effects on at least two different accounts.
This system satisfies the basic accounting equation where assets is equal to
liabilities plus equity.
In the general ledger, the left side contains
the debit or the company’s asset. However, the right side of the general ledger
contains the credits or the company’s liabilities or equities. As an example,
if the company receives cash, the account is debited; whereas if the company
pays cash, the account is credited.
Basic accounting courses in Singapore that is offered by different institutions will tackle more about the fundamentals of accounting. The aforementioned terms are just an overview of what the syllabus will tackle.
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