Understanding the accounting cycle and importance of accounting

Understanding the accounting cycle and importance of accounting The Importance of Accounting To understand accounting information and use accounting information is important for any business. Information that is provided to external parties who have an interest in a company is sometimes referred to as financial accounting information, according to Williams, Haka, Bettner, and Carcello (2006, p. 4). The main reason in providing accounting and financial information is the use of said information in decision-making purposes. Many groups, including company management, government regulatory agencies, creditors, and suppliers, use financial information in various ways to determine a companys financial health and ability to meet obligations as such obligations become current. Companies and their personnel must understand the various steps in the accounting cycle and how such steps provide reliable information to the users of financial information. What is the Accounting Cycle? The accounting cycle is the sequence of accounting procedures used to record, classify, and summarize accounting information in financial reports at regular intervals (p. 94). The final preparation of formal financial statements is always started with the recording of business transactions and this cycle repeats so the business can prepare new, current, financial statements in response to business transactions conducted by the firm. The accounting cycle is composed of eight steps and includes journalizing transactions, posting journal entries to ledger accounts, preparing a trial balance, making end-of-the-period adjustments, preparing an adjusted trial balance, preparing financial statements, journalizing and posting closing entries, and preparing an after-closing trial balance. Remember debits increase assets while credits increase owner equity during the recording and adjustment phases of the accounting cycle. An account has only three elements: (1) a title; (2) a left side, which is called the debit side; and (3) a right side, which is called the credit side (p. 95); such accountings are called T accounts because, on paper, the recording of such accounts resembles the letter T. A sample T account is below: The account balance is determined in the difference between the debit and credit sides of the account. If the debit total is more than the credit total, the account is said to have a debit balance. If the credit total is more, then the account is said to have a credit balance. In asset accounts, the debit recording increases the amount in the asset account and a credit decreases the amount in the account. Under liability and owners equity accounts, the debit decreases the amount in the account, while a credit increases the amount in the account. This aligns with the equation and is known as the system of double-entry account. Journalizing Transactions The first step involves placing the business transactions into a journal, which records the business transactions chronologically (day-by-day). The amounts entered in this section are transferred to the debit and credit sections of the accounts in the ledger. A person investing in the firm pays $80,000 in cash in exchange for stock in the firm. The two accounts affected by this transaction are the Cash and Capital Stock. The first step in journalizing this entry is entering the name of the account debited (Cash), which is written first, along with its dollar amount entered in the left-hand money column. The name of the account credited (Capital Stock) appears below Cash and is indented to the right, with the dollar amount appearing in the right-hand money column. A description of the transaction appears below the journal entry. Below is a sample journal entry: Posting to Ledger Accounts Posting simple means updating the ledger accounts for the effects of the transactions recorded in the journal (p. 98). If the person reads the journal entry aloud, this means the previous journal entries are read as Debit Cash $80,000; credit Capital Stock, $80,000. A person copies the journal entry amounts into the general ledger, which is a series of T account entries; this is performed in the ledger as follows: This process is continued until all journal entries are record in the ledger. Once all of the ledger entries are calculated, the next step is the preparation of the trial balance. Trial Balance The trial balance is prepared to ensure debits and credits equal one another. All of the ledger accounts are listed, with debits in the left column and credits in the right column (Internet Center for Management and Business Administration, 2007). The debit column is added first, then the credit column. If the totals do not agree, the issue could be a debit was recorded instead of a credit, mistakes in arithmetic, and clerical errors in copying account balances into the trial balance. Both columns should be equal; however, this does not mean that a transaction was recorded in the wrong account. A sample trial balance is displayed below: Making End-of-period Adjustments Adjustments after the trial balance is created to record accrued, deferred, and estimated amounts and posting the adjusted entries to the ledger accounts. Once the entries are entered in the ledger, the accountant prepares the adjusted trial balance, which contains similar steps to the unadjusted trial balance; however, the adjusted trial balance contains the adjusting entries. Accrued items would include salaries, interest income, and unbilled revenue; deferred items would include prepaid insurance, office supplies, and depreciation. Preparing Financial Statements Publicly owned companies-those with shares listed on a stock exchange-have obligations to release annual and quarterly information to their stockholders and to the public (Williams, Haka, Bettner, and Carcello, 2006, p. 192). The financial statements include the income statement, the statement of retained earnings, the balance sheet, and the statement of cash flows (also known as the cash flow statement). The income statement is prepared first because it determines the amount of net income in the statement of retained earnings. The statement of retained earnings is prepared next to provide information for the balance sheet. The balance sheet is prepared from the assets, liabilities, and equity accounts of the firm. Finally, the cash flow statement is prepared using data from the other financial statements. Preparing Closing Entries to Journals and Ledger Accounts Closing journal entries closes temporary accounts such as revenues and moves these accounts to a temporary income summary account. The balance is then transferred to the retained earnings account, which is a capital account; likewise, dividend or withdrawal accounts are closed to capital. Closing entries are then posted to the ledger accounts. After these tasks the after-closing trail balance is created to ensure debits equal credits. Error-checking and correction is made to this trial balance. The Importance of the Accounting Cycle Re-visited All businesses prepare financial statements, so it is important all accountants understand the accounting cycle to ensure the proper entry of data and credible financial information out put. Eight steps comprise the accounting cycle, from the journalizing of business transactions to preparing after-closing trial balances. Without the accounting cycle, the information provided in financial statements would not be reliable and decision-making processes would be difficult to perform by users of financial information.

The Titanic - Depth of the Heart of the Ocean Essay -- Movie Film Ess

The Titanic - Depth of the Heart of the Ocean "Ahh, open your heart to me, Rose," pleads Caledon Hockley of the young Rose in James Cameron's film, Titanic, just after he gives her a most expensive diamond. The actor Billy Zane plays Hockley as a callous, jaded, been-there-done- that sophisticate who seems to want her heart simply because he believes it is for sale and he has a right to it. His blindness to higher motives in love totally disqualifies him from being worthy of Rose DeWitt Bukater, played by Kate Winslet. But perhaps it is also the opaque nature of love itself that defeats him. This scene between Hockley and Rose is one of several ways in which Cameron develops the idea of the closed heart and the effort to open it. The profound ocean, the massive ship, and the impenetrable gem are elements of the setting that parallel and reinforce each other and Cameron’s theme. Throughout the plot, they are all alike unfathomable, indomitable, yielding to the mastery of no mere mortal. As such, they capture the image of a person's heart being opaque, not easy to read or see through. The midnight blue color throughout suggests that the heart of love is as profound, deep and moving as the ocean itself. The gem drives the plot, then, and serves as the central symbol carrying the message. The elderly Rose narrates the story, casting the film in a flashback format. She asks a question about a gem named "Le Coeur de la Mer," the French title for "The Heart of the Ocean." It is this diamond that the modern salvage crew seeks at the start of the film. Their quest takes them to the wreck of the ship Titanic which sank on April 15, 1912, and wh... ...help for pain" (577). Cameron echoed that sentiment in his acceptance speech when he said that love is the strongest force in the world. Anyone who engages it, then, will triumph to the extent that his or her strength of character is as true, deep, and profound as the ocean itself. Sources Cited Arnold, Matthew. "Dover Beach." Literature: An Introduction to Reading and Writing, 4th ed. Eds. Edgar V. Roberts and Henry E. Jacobs. Upper Saddle River, NJ: Prentice Hall, 1995. 576-7. Cameron, James, Dir. Titanic. Perf. Leonardo DiCaprio and Kate Winslet. 20th Century Fox, Paramount Pictures, 1997. ---. 55th Annual Golden Globe Awards. VH-1 -- 38, San Antonio.18 January 1998. ---. "The Making of Titanic." Oprah. KMOL -- 4, San Antonio. 20 January 1998. "Clare Reviews Titanic." 1/11/98. 3/18/98. http://www.girlsonfilm.com/film/navigation

Mental Illness in “A Beautiful Mind”

Ron Howard’s movie â€Å"A Beautiful Mind† starring Russell Crowe and Jennifer Connelly portrays the journey and the man behind the mental illness that Nobel Prize winner and Princeton intellectual John Nash develops late in his adulthood. The plight of the mentally ill is very well developed in this movie. The movie develops not only the struggle of the victim to overcome the shocking world of abstract and impending doom brought on by the illness, but focuses on the effects that the family of the victim suffer as well.Through Nash’s relationship with his wife, viewers see how spouses desperately try to help their mates face reality, but the illness seems to be more overpowering than even the strongest most patient love. Nash’s wife was the ultimate support system, but even she had a breaking point; when Nash almost fatally injures his baby, his wife could no longer endure the illnesses’ debilitating effects. Having a strong support system is essent ial for someone suffering from a mental illness, and often, victims will find themselves alone or institutionalized because the illness is more than the sane can deal with.They can’t stand to see the person they love changed so dramatically that reality is so obscured. It is hard for anyone to put themselves in the place of the victim and be empathetic or sympathetic, especially when the disease gets so destructive that there is little left of the person who once occupied that body and mind. This movie did an excellent job at illustrating what supportive family and friends can do for a person suffering from mental illness, but does not mask the severity or the complexity of the disease or the complicity in dealing with it and helping a victim survive mental illness.

Wireless System Security Issues Essay

Importance of Wireless Systems Security Today, we can hardly deny the fact that a person who possesses information rules the world. Information is a very valuable and sometimes expensive knowledge that can be used for the benefit of its owner; and it isn’t a secret that many enterprises and individuals use mainly wireless systems to share this useful information with their partners. Wireless networks are widespread and used by different organizations and individuals. They provide many opportunities and benefits for their users, but at the same time bring some problems; the main issue is information security. It has become really vital because at present a hacker can get access through one wireless laptop used by the company to its whole network. For professional hackers wireless networks are relatively easy to crack into if appropriate security measures are not introduced. Thus, it is extremely important for people to find effective wireless security means to protect their valuable information against unauthorized access. It is really difficult to guard information, because cracking methods have become very sophisticated and innovative, but it is possible. Though I’m not a specialist in this sphere, I think that in order to prevent negative effects of information disclosure, enterprises can use only local networks to store useful information and it’s better to divide it into separate blocks so that employees had access only to a definite part of information that is necessary to perform their work. I believe that it is possible to use wireless systems to share useful information if the company takes all the necessary measures to prevent its disclosure. Wireless systems security should be one of the main branches of the company’s activities if it wants to compete successfully on the market.