Core Operations: Accounting 1 on 1, The Balance Sheet, CPA

ACCOUNTING 1 ON 1
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1.
Accounting is a very important aspect of our core operations. Just like science is to life, so is accounting to business. It essentially provides the language through which business flourishes. It enables proper planning, organization and forecasting for the future. It is a discipline on its own. There are four financial statements; the balance sheet, the income statement, the statement of retained earnings, and the cash flow statement. The main purpose of the balance sheet is to provide an overview of the stock holders’ equity, the company’s liabilities, as well as its assets, within a given timeframe.
The income statement on the other hand is more like a report card indicating how the business is performing over a given period of time. In essence, it takes care of the realizable margins once the expenses are subtracted from the revenues. In a nutshell, an income statement simply highlights the operations of the business.
The statement of retained earnings is in a way similar to the income statement, only that it functions to show the financial standing of the business after the dividends and the net income have been computed. In the obvious case, the net income increases the retained earnings since it adds more finances into the portfolio of the business, while dividends do the opposite-they reduce the retained earnings. The cash flow statement indicates the receipts and payments into and out of the business respectively. It is called a cash flow statement since it shows how the cash has circulated through its business activities namely, investing, financing and operating activities.
The balance sheet is the most preferable financial statement to offer a preview of the financial health of the business. This is because it offers a view into a summary of the business’ total assets, liabilities and in short, its liquidity.
2.
There is always a tendency to confuse between an accountant and a certified public accountant. Accountants can have their educational backgrounds in accounting but also have other majors in the business field that are not automatically accounting. A company can take up the services of an accountant, who works in conjunction with the clerk, to keep financial entries. They can be in charge of the billing pr oversee the work done by clerks.They can also handle payroll and are answerable to the manager of the business or the company (Reeves, 2015).
CPAs on the other hand have a specific and specialized study in accounting. For one to be a CPA, he or she must have sat for, and passed the certified public accountancy examination .Inorder to sit for this exam, an individual must have satisfied the educational and experience requirements as dictated by the state. A CPA has got the flexibility to work for a different company or to set up his or her own accounting firm to offer accounting services to clients. The CPA is a certification that enables one to be called a CPA, a...