Online Accounting Degrees

Assets

noreply@blogger.com (mohfiz83) — Mon, 02 Mar 2009 16:13:00 +0000

Definition of Assets.

In business and accounting, assets are everything of value that is owned by a person or company. It is a claim on the property your income of a borrower. The balance sheet of a firm records the monetary value of the assets owned by the firm. It is money and other valuables belonging to an individual or business. The two major asset classes are tangible assets and intangible assets. Tangible assets contain various subclasses, including current assets and fixed assets. Current assets include inventory, while fixed assets include such items as buildings and equipment. Intangible assets are nonphysical resources and rights that have a value to the firm because they give the firm some kind of advantage in the market place. Examples of intangible assets are goodwill, copyrights, trademarks, patents and computer programs, and financial assets, including such items as accounts receivable, bonds and stocks.

Asset characteristics

Assets have three essential characteristics:

The probable future benefit involves a capacity, singly or in combination with other assets, in the case of profit oriented enterprises, to contribute directly or indirectly to future net cash flows, and, in the case of not-for-profit organizations, to provide services;
The entity can control access to the benefit;
The transaction or event giving rise to the entity's right to, or control of, the benefit has already occurred.

It is not necessary, in the financial accounting sense of the term, for control of assets to the benefit to be legally enforceable for a resource to be an asset, provided the entity can control its use by other means.

It is important to understand that in an accounting sense an asset is not the same as ownership. Assets are equal to "equity" plus "liabilities."

The accounting equation relates assets, liabilities, and owner's equity:

Assets = Liabilities + Owners' Equity

The accounting equation is the mathematical structure of the balance sheet.

Assets are listed on the balance sheet. Similarly, in economics an asset is any form in which wealth can be held.

Probably the most accepted accounting definition of asset is the one used by the International Accounting Standards Board. The following is a quotation from the IFRS Framework: "An asset is a resource controlled by the enterprise as a result of past events and from which future economic benefits are expected to flow to the enterprise."

Assets are formally controlled and managed within larger organizations via the use of asset tracking tools. These monitor the purchasing, upgrading, servicing, licensing, disposal etc., of both physical and non-physical assets.In a company's balance sheet certain divisions are required by generally accepted accounting principles (GAAP), which vary from country to country.

Current assets

Main article: Current asset

Current assets are cash and other assets expected to be converted to cash, sold, or consumed either in a year or in the operating cycle. These assets are continually turned over in the course of a business during normal business activity. There are 5 major items included into current assets:

Cash and cash equivalents — it is the most liquid asset, which includes currency, deposit accounts, and negotiable instruments (e.g., money orders, cheque, bank drafts).
Short-term investments — include securities bought and held for sale in the near future to generate income on short-term price differences (trading securities).
Receivables — usually reported as net of allowance for uncollectable accounts.
Inventory — trading these assets is a normal business of a company. The inventory value reported on the balance sheet is usually the historical cost or fair market value, whichever is lower. This is known as the "lower of cost or market" rule.
Prepaid expenses — these are expenses paid in cash and recorded as assets before they are used or consumed (a common example is insurance). See also adjusting entries.

The phrase net current assets (also called working capital) is often used and refers to the total of current assets less the total of current liabilities.

Long-term investments

Often referred to simply as "investments". Long-term investments are to be held for many years and are not intended to be disposed in the near future. This group usually consists of four types of investments:

Investments in securities, such as bonds, common stock, or long-term notes.
Investments in fixed assets not used in operations (e.g., land held for sale).
Investments in special funds (e.g., sinking funds or pension funds).

Different forms of insurance may also be treated as long term investments.

Fixed assets

Main article: Fixed asset

Also referred to as PPE (property, plant, and equipment), these are purchased for continued and long-term use in earning profit in a business. This group includes land, buildings, machinery, furniture, tools, and certain wasting resources e.g., timberland and minerals. They are written off against profits over their anticipated life by charging depreciation expenses (with exception of land). Accumulated depreciation is shown in the face of the balance sheet or in the notes.

These are also called capital assets in management accounting.

Intangible assets

Main article: Intangible asset

Intangible assets lack physical substance and usually are very hard to evaluate. They include patents, copyrights, franchises, goodwill, trademarks, trade names, etc. These assets are (according to US GAAP) amortized to expense over 5 to 40 years with the exception of goodwill.

Websites are treated differently in different countries and may fall under either tangible or intangible assets.

Tangible assets

Tangible assets are those that have a physical substance, such as equipment and real estate.

Financial Accounting Tutor

noreply@blogger.com (mohfiz83) — Tue, 24 Feb 2009 14:56:00 +0000

Comprehensive Accounting E-Learning

An Introduction to Accounting

Instructions: Detailed instructions on how to use the software.
Basic Accounting Terms: The entity concept, the monetary-unit concept, assets, liabilities, owners' equity, and the accounting equation.
Forms of Business: Proprietorships, partnerships, and corporations.
Financial Statements: The four principal financial statements, the periodicity concept, and the accrual method.
The Accounting Equation: The accounting process without debits and credits. The dual-aspect concept and its link to double entry bookkeeping.
Debits and Credits: An interactive journal entry format that speeds up learning by showing the debits and credits in relation to the accounting equation.
The Accounting Process: The basic steps involved in the accounting process using debits and credits. Adjusting entries are covered in depth later.
The Role of Accounting: How accounting numbers are used and an economic foundation for the rest of the course.

Assets

An Overview of Assets: The differences in accounting for assets that are shown at market value, lower of cost or market value, and cost less amortization.
The Recognition Concept: The difference between revenues and cash receipts, the allowance method, and perverse incentives such as trade loading.
The Matching Concept: The difference between cash flows, costs, and expenses and the meaning of the term capitalization.
Long-term Contracts: Accounting for long-term contracts in the context of the recognition and matching concepts.
Period Costs: Costs that are expensed when incurred.
Inventoriable Costs: Costs that are inventoried when incurred.
Inventories: Cost-flow methods such as FIFO and LIFO.
Long-term Assets: Purchase and use of property, plant, and equipment for manufacturing and non-manufacturing activities.
Amortization and Disposal: Allocation of costs over an asset's useful life.

The Time Value of Money

These chapters provide the financial background necessary to understand accounting for interest and bonds.

Compound Interest: The concepts underlying simple and compound interest and present and future values.
Effective Interest Rate: Annual percentage rate (APR), compounding frequency, annualized yield, effective interest rate, and converting interest rates quoted in one compounding frequency to another.
Annuities: Annuities and perpetuities and formulae for their present values.
Bonds: Bond terminology, bonds issued at a premium and at a discount, and the difference between the coupon rate and the discount rate.

Liabilities and Equities

An Overview of Liabilities: Importance of liabilities, their classification, and the three conditions that a liability must satisfy. Postretirement benefits, frequent flyer programs, contingencies, the estimates required for recording long-term liabilities, the effect of discount rates, pension plans, commitments, and executory contracts.
Accounting for Interest: The amortization table and its relation to journal entries and the difference between cash paid and interest costs.
Accounting for Bonds: Amortization table, journal entries, the relationship among book value, interest expense, and cash flow, the difference between a bond’s book value and its market value, and gains or losses on bond buybacks.
Leases: Operating and capital leases, why managers avoid capital leases, off-balance-sheet liabilities.
Deferred Taxes: The logic underlying deferred tax liabilities and a comparison of deferred tax liabilities and taxes payable.
An Overview of Owners' Equity and 28. Dividends and Buybacks: Common and preferred stocks, issuance and retirement, dividends, retained earnings, restrictions on distributions, and the difference between book and market values.

Financial Assets

Debt Investments: How the liquidity of an asset and the purpose for which it is held determine its accounting, the different types of financial assets, securities, what makes them more liquid than other assets, why firms make financial investments, the attributes and classification of debt securities, and accounting for held-to-maturity debt securities, available-for-sale debt securities, and debt securities used for trading.
Equity Investments: Why firms hold equity securities and their classification, including eliminating related-party transactions, restating the book values of investee’s identifiable assets and liabilities to their market values, as well as goodwill.

Analysis

The Cash-Flow Statement: Cash and cash equivalents, the need for a cash-flow statement, the direct and indirect formats of the cash-flow statement, the effect of contributions, receivables and payables, advances paid by customers, inventory, and depreciation on the cash-flow statement, operating, investing, and financing cash flows. Includes practice problems for cash flow statements for many settings covered in the previous chapters.
Financial Statement Analysis: An analysis of profitability, return on investment, return on assets, and return on equity, earnings per share and the price-earnings ratio, and the analysis of short-term risk and long-term risk

Why we should go for Accounting Degrees

noreply@blogger.com (mohfiz83) — Tue, 24 Feb 2009 14:53:00 +0000

Accounting Career Information

Chief Financial Officer

An organization's CFO is responsible for managing the overall financial strategies, objectives and policies of that company. The CFO oversees all financial functions including accounting, budgets, credit, insurance, tax, and treasury. The position is influential in designing and coordinating a variety of accounting, statistical data and reporting materials. This position is highly visible within most companies and often reports directly to the CEO.

Controller

An organization's Controller is responsible for directing a company's accounting functions. These functions might include establishing and maintaining the organization's accounting principles, practices, procedures, and initiatives. The Controller would also prepare financial reports and directly present findings and recommendations to top level executive management including the CFO, COO, and CEO.

Accounting Manager

Accounting Managers are responsible for managing the general accounting functions within an organization. This position oversees the completion of ledger accounts and financial statements throughout the organization. The Accounting Manager runs the accounting department and reports directly to senior management.

Accountant

Accountants prepare profit and loss statements, balance sheets, and other financial reports for organizations or for private parties. An accountant's responsibilities also include analyzing trends, costs, revenues, financial commitments, and obligations incurred to predict future revenues and expenses. This position also reports an organization's finances to management, and might also offer suggestions about resource utilization, tax strategies, and assumptions underlying budget forecasts. The accountant position is a highly valuable position within any company.

Accounts Payable Manager

The Accounts Payable Manager is responsible for all actions within the accounts payable function of an organization. The position ensures timely payments of vendor invoices and expense vouchers and maintains accurate records and control reports which are reviewed by senior management. The Accounts Payable Manager also reviews the applicable accounting reports and accounts payable registers to ensure timeliness and accuracy.

Financial Analyst

A Financial Analyst will compile and analyze financial information for an organization or private party. This position is responsible for developing integrated revenue & expense analyses, projections, reports, and presentations. They will also create and analyze monthly, quarterly, and annual reports to ensure the financial information has been recorded accurately. Job duties for a Financial Analyst also include identifying trends and developments in competitive environments and presenting the findings to senior management. This position also performs financial forecasting and reconciliation of internal accounts.

Bookkeeper

Maintains and records business transactions for organizations or private parties. Responsibilities include balancing ledgers and preparing financial reports.

Accountant Salary Information

The earnings of Accounting School graduates vary depending on their experience, skill level, and location. According to a 2003 salary survey, most starting accounting and Bookkeeping positions ranged from $35,000 to $45,000 annually depending on their responsibilities. More experienced executive positions like a Chief Financial Officer can earn up to and over $200,000 annually or a Controller who might earn more than $150,000 depending of the size and value of the company. Median earnings for Accounting Managers in the United States are just over $80,000 where as an Accounts Payable Manager earns a median salary of about $65,000. The median expected salary for a typical Financial Analyst in the United States is $64,500

Facts you need to know about online accounting degrees

noreply@blogger.com (mohfiz83) — Tue, 24 Feb 2009 14:30:00 +0000

Online Business Degrees in Accounting

Online accounting degree and certificate programs are offered by accredited universities and colleges like University of Phoenix, Kaplan University and AIU Online. Specializations include managerial accounting, professional accounting, finance, and more.

Online Accounting Degree Programs

Few career fields today offer the kind of opportunities and job security that accounting does. In fact, in a 2008 survey of 500 finance and accounting professionals, a full 65 percent believe they have the same, if not better, job opportunities than they did the previous year. National statistics support these findings: the Bureau of Labor Statistics projects that employment of accountants and auditors will grow by 18 percent--faster than the average for all occupations--by 2016. If you're thinking of beginning, or continuing, your career training in accounting, now is a great time to do so. (cont)

Accounting Degrees Are in Demand

Recent corporate scandals involving high-profile accounting firms have spurred the demand for accountants and auditors. This is because accounting and reporting guidelines have become stricter in the U.S. in order to head off further scandal; the federal government passed the Sarbanes-Oxley Act (SOX) of 2002. This act requires public companies to strengthen internal financial controls and to ensure the accuracy of their reporting. Such legislation, of course, has greatly increased the demand for ethical, knowledgeable, and well-trained accountants.

Other factors contributing to the demand for those with accounting degrees include the increasing globalization of companies in recent years, forcing them to comply with International Financial Reporting Standards, as well as an aging baby boomer population, which will leave many vacancies as retirements continue to increase.

Accounting Degrees and Certifications

In the United States, there are three main classes of certified accountants: Certified Public Accountant (CPA), Certified Internal Auditor (CIA), and Certified Management Accountant (CMA). CPAs provide a wide range of services to the public, including auditing, accounting, litigation, tax planning, and financial advisory services. CIAs work in an auditing capacity for employers, while CMAs generally work for companies but might also serve the public in a more limited way than CPAs.

Although requirements vary from state to state, becoming a CPA requires the completion of a college or university bachelor's accounting degree. An accounting degree typically includes 150 credit hours of coursework, and specific courses, usually in financial accounting, managerial accounting, taxation, and auditing. According to the BLS, opportunities will be best for those whose career training includes either a master's degree or certification or licensure. Any accountant whose work involves filing reports with the Securities and Exchange Commission (SEC) is required to be a CPA.

A Lucrative Career Begins with the Right Career Training

According to the BLS, accountants and auditors earned a median annual salary of $54,630 in May 2006. The highest concentration of accountants and auditors work in accounting, tax preparation, bookkeeping, or payroll service firms. And a 2006 National Association of Colleges and Employers salary survey found that employment candidates with bachelor's degrees in accounting received an average starting offer of $46,718 per year.

Of course, no educational program can guarantee a future salary or employment upon completion, but accounting degrees and licensure certainly increase your opportunities for employment and advancement