Wang Solutions

Why Everyone Needs a Little Accounting in Their Life

My students for Basic Accounting Principles 101 crept sluggishly into the classroom as if they were entering a death chamber. It was the first day of the Fall Quarter at Westwood College. One young man immediately heaved an enormous sigh and declared, “I hate accounting and I am terrible at math. Oh, I’m getting a headache just by being in this class.” I couldn’t suppress a smile as I said, “Let me set a few things straight. First of all, accounting has very little to do with math, but it has a lot to do with logic and common sense.”
 
“What?!” cried all of students in the classroom, their sleepy ears perking up.  Well, that definitely got their attention!  “Yup, accounting is about how an individual “accounts” for a transaction, how one “reports” the data, and how one “translates” the information. The math portion simply plays a supporting role in the big picture. Whether it’s for business purposes or personal reasons, one wants to know where his money is coming from, how much of it he can generate, and how much he has left over at the end of the day.
 
“So accounting is really a medium that helps you keep track of your business transactions, report these transactions correctly according to accounting guidelines and principles, and most importantly, make your next business move. In other words, an accounting background is like having a secret weapon in the business world!” I exclaimed to my students. I continued to stand on my soap box and preach that everyone should have some accounting knowledge as he or she travels through life. Regardless of your chosen profession, you must be able to understand what your CPA, your tax preparer, your bookkeeper and/or your financial advisor is telling you about your financial status.
 
“When you’re a successful professional and have a family of your own ten years down the road, you’re going to be making big decisions about your money. It’s imperative that you know how to read a Balance Sheet and an Income Statement. How often have you heard on the news that a celebrity or business owner was cheated out of his/her life savings? It’s bad when an accountant steals from his clients, but it’s almost worse when a business owner doesn’t know how to read his own financial statements or check his bank accounts. 
 
“I would go so far as to say that it’s fun to run a business once you know how to read and interpret its financial statements. Accounting functions as a safety net for your pocketbook – you can even think of it as the CSI of Numbers!  Armed with accounting know-how, you can keep your financial advisors honest and your bank account secure. Remember to always check the integrity of your data – numbers don’t lie, people do – without principles and integrity, your financial statements would read like a fiction novel on the New York Times Best Seller list.”
 
 
On the Money,
Sufen Wang
Wang Solutions