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What Does a Career in Accounting Demands for?

What Does a Career in Accounting Demands for?
What Does a Career in Accounting Demands for? Are you vying for a career in accounting field? Everybody envy accountants for there is a misconception that they are Demi-Gods. Though a good accounts manager can act like one who can save you from a dire situation by manipulating the accounts skilfully, the demands and challenges in this field are too high to be savored. Purchase Your Copy of “Careers with a Degree in Accountancy and Finance” at Gumroad  So what does it take to become a reputed accounts man in your circle and also enjoy what you do! Self analysis is the best way to understand what you really want to be. There are certain traits characteristic to people belonging to this community. See if you are gifted with those attributes; if not, you can always train yourself to gain expertise. 1. Are you good at numbers– Mathematics, Yuck! If this is your reaction please quit reading this article as numbers play an integral role in accountancy. Figures, Figures and more Figures determine the profit and loss status of a company. If you are passionate about playing with numbers it goes without saying you are already a half accountant. The thrill of taking control and handling numbers make or break a company. Jackie Mansion jocularly puts it – “Did you ever hear of a kid playing accountant – even if they wanted to be one?” 2. Are you a good listener and can you read between the lines? A good auditor will allow the client to talk and listen to what he says. Then he tries to extract the exact kind of information he needs to make the ends meet. Empathy is an innate quality and if you are not going to be a good listener then please revise your consideration of becoming an accountant. Sometimes the client may not know what you wish to seek; it is your responsibility to frame simple questions in a language that he understands and pull out answers. 3. Can you avoid being temperamental? 90% of the time your clients are going to say “No” to whatever you suggest. Alas, it is not their fault; the corporate Bosses and CEO’s always aim big and most probably will not be aware of the consequences of their impulsive actions. They always think about clinching a deal and conveniently overlook the effects of their financial and corporate decisions on the account and subsequently on the accountant. For example cash has to be handled very carefully and every penny has to be accounted for properly.  A bank cashier will know the importance of cash handling as it is very important for them to balance the inflow and outflow at the end of the day. For corporate firms, it becomes mandatory to reduce the cash dealings and account every transaction in the form of a check or electronic transfers like RTGS or NEFT or EFT. The point is, you should have the nerve to talk to a company’s head if he is planning for a bad move and suggest what could be done for the good of the company (Income tax and Sales purposes). 4. Are you wise when it comes to choosing clients? Whether you are a part time practitioner, Full time accountant, Accounts manager or Free lancer, do your homework before accepting the offer. Ultimately you need to see your payments coming through and nobody works here for a song. Big practitioners take a big cut half yearly or annually but if you are a part time accountant, it is always better to go for monthly payments or get paid after the completion of individual project s....
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Scope of Financial Management

Scope of Financial Management
Scope of Financial Management Facebook Buys WhatsApp: Boneheaded or Brilliant? This was the title of a  Forbes Article when Mark Zuckerberg acquired Whatsapp for $19 billion dollars, the price that may exceed the GNP of some of those countries. Mark is said to be an unconventional thinker and the WhatsApp acquisition shows Facebook’s determination to follow the road not yet paved. It is a bold move, yet filled with risks along the way. This is one of the finest examples of the big investment decisions of recent times and the right course of action,  if you measure the number of potential users of the mobile messaging service rather than the cost of acquiring each user and the potential for selling ads to each user today. Financial management is one of the important aspects of overall management, which is directly asscoiated with various functional departments like personnel, marketing and production. Financial management embraces wide area with multidimensional approaches. The following are the important scope of financial management. Some of the major scope of financial management are as follows: 1. Investment Decision 2. Financing Decision 3. Dividend Decision 4. Working Capital Decision. 1. Investment Decision: The investment decision involves Risk Evaluation Measurement of cost of capital and Estimation of expected benefits from a project. Capital budgeting and liquidity are the other two major components of investment decision. Capital budgeting takes care of the distribution of capital and commitment of funds in permanent assets to harvest revenue in future. Capital budgeting is a very focal decision as it impacts the long-term success and growth of a firm. All the same it is a very tough decision because it encompasses the estimation of costs and benefits which are uncertain and unknown. 2. Financing Decision: Financing decision is related to financing mix or financial structure of the firm. The raising of funds requires decisions regarding Methods and sources of finance Relative proportion and choice between alternative sources Time of floatation of securities, etc. In order to meet its investment needs, a firm can raise funds from various sources. Long Term Sources of Finance: Share Capital or Equity Shares Preference Capital or Preference Shares Retained Earnings or Internal Accruals Debenture / Bonds Term Loans from Financial Institutes, Government, and Commercial Banks Venture Funding Asset Securitization International Financing by way of Euro Issue, Foreign Currency Loans, ADR, GDR etc.  Picture Courtesy: Cash & Treasury Management file Medium Term Sources of Finance: Preference Capital or Preference Shares Debenture / Bonds Medium Term Loans from Financial Institutes Government, and Commercial Banks Lease Finance Hire Purchase Finance Short Term Sources of Finance: Trade Credit Short Term Loans like Working Capital Loans from Commercial Banks Fixed Deposits for a period of 1 year or less Advances received from customers Creditors Payables Factoring Services Bill Discounting etc. 3. Dividend Decision: In order to accomplish the goal of wealth maximization, a proper dividend policy must be established. One feature of dividend policy is to decide whether to distribute all the profits in the form of dividends or to plough back the profit into business. While deciding the optimum dividend payout ratio (proportion of net profits to be paid out to shareholders), the finance manager should consider the following: Investment opportunities available to the firm Plans for expansion and growth, Dividend stability Form of dividends, i.e., cash dividends or stock dividends, etc. 4. Working Capital Decision: Working capital decision is related to the FINANCING in current assets and current liabilities. Current assets include cash, receivables, inventory, short-term securities, etc. Current liabilities consist of creditors, bills payable, outstanding expenses, bank overdraft, etc. Current assets are those assets which are convertible into cash within a year. Similarly, current liabilities are those liabilities, which...
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Cash Accounting

Cash Accounting
Cash accounting: Simple example of cash accounting   Some Definitions of Cash Accounting: 1. An accounting method where receipts are recorded during the period they are received, and expenses are recorded in the period in which they are actually paid. Cash accounting is one of the two forms of accounting. The other is accrual accounting, where revenue and expenses are recorded when they are incurred. Small businesses often use cash accounting because it is simpler and more straightforward, and it provides a clear picture of how much money the business actually has on hand. Corporations, however, are required to use accrual accounting under generally accepted accounting principles. revenue 2. An accounting system that doesn’t record accruals but instead recognizes income (or revenue) only when payment is received and expenses only when payment is made. There’s no match of revenue against expenses in a fixed accounting period, so comparisons of previous periods aren’t possible. 3. An accounting method in which income is recorded when cash is received, and expenses are recorded when cash is paid out. Cash basis accounting does not conform with the provisions of GAAP and is not considered a good management tool because it leaves a time gap between recording the cause of an action (sale or purchase) and its result (payment or receipt of money). It is, however, simpler than the accrual basis accounting and quite suitable for small organizations that transact business mainly in cash. Also called cash accounting....
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Real Estate Investment

Real Estate Investment
These article-embeds focus on the real estate scenario both in the US and India and how relaxation in Foreign Direct Investment Policies has brought about a sea change in the minds of foreign investors on viewing India as one of the major sources of potential investment. And most importantly real estate in India is in a boom thanks to the constant urbanization and interest of NRI people who want to invest in properties in big Indian cities like Mumbai, Cochin, Pune, Bangalore and Chennai. Some light is also thrown on how to handle the capital gains when a property is sold. One has to be aware of the tax implications that arise while selling a property and the proceeds have to be properly accounted for. Real Estate looks enterprising in India and always has been so since people of our country treat land and gold as dependable assets. Owning a house or a property is a status symbol too and people save money to buy land and build their dream houses. This saving tendency has supported the growth of our economy very well and has rather saved it from tumbling down unlike what happened in the recent recession in the US. Some Interesting Real Estate Quotes to keep you in Good Humor: “It is a comfortable feeling to know that you stand on your own ground. Land is about the only thing that can’t fly away.” ~Anthony Trollope “The best investment on earth is earth.” ~Louis Glickman “He is not a full man who does not own a piece of land.” ~Hebrew Proverb “A man complained that on his way home to dinner he had every day to pass through that long field of his neighbor’s.  I advised him to buy it, and it would never seem long again.” ~Ralph Waldo Emerson “As long as you have more cash flowing in than flowing out, your investment is a good investment.” Robert Kiyosaki Read and enjoy the following articles: What To Expect From The Real Estate Market In 2014 Focus of Overseas Investors on Indian Real Estate Market How to save capital gain taxes in real estate? UDEMY, the educational platform is offering real estate courses at a big discount and I reckon the following courses would help real estate brokers and agents to hone their skills in terms of online presence and marketing. Gain Leads and Colleagues with a Real Estate Website/Blog Creative Real Estate Investing & Flipping...
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Why is Depreciation Charged on Assets

Why is Depreciation Charged on Assets
What is meant by Depreciation? Depreciation means reduction in the value of a fixed asset used in the business due to #wear and tear and effluxion of time. #Internal and External Causes of depreciation: i. Wear and tear: Caused mainly due to constant use, erosion, rust etc. ii. #Efflux of time: Mere passage of time will cause a fall in the value of an asset, even if it is not used. iii. #Obsolescence: A new invention or change in fashion or a permanent change in demand may render the asset useless. iv. #Depletion: When raw materials or natural resources like mines, quarries and oil wells are extracted continuously, they deplete. v. #Accident: An asset may reduce in value because of meeting with an accident, like fire accidents. vi. Fall in the market price. What is the necessity for providing depreciation? According to International #Accounting Standard Committee (IASC) “Depreciation is the allocation of the depreciable amount of an asset over its estimated useful life. Depreciation for the accounting period is charged to income either directly or indirectly.” The #need for depreciation arises because of the following reasons: To ascertain the true profit of the business for a particular period To show the asset at its true value in the balance sheet To provide funds for replacement of the old asset with a new one Objectives of providing depreciation: To recover the cost incurred on fixed assets over its life To facilitate the purchase of new asset, when the old asset is disposed To find out the correct profit or loss for the particular period To find out correct financial position through balance sheet Factors to be considered while determining the amount of depreciation: I. The total cost of the asset including all #freight, #insurance and installation charges II. The estimated residual or scrap value at the end of its life III. Estimated number of years of its usefulness The term depreciation is concerned with charging the cost of fixed assets to operations. But the term depletion refers to the cost allocation for natural resources, whereas the term amortization relates cost allocation for intangible assets. What are the various methods for depreciation? Fixed installment or Straight line or Original cost method. Diminishing Balance Method or Written down value method or Reducing Installment method. Annuity Method. Depreciation fund method or #Sinking fund amortization fund method. Insurance policy method. Revaluation method. Sum of the year’s digits method (SYD). Double declining balance method. Depletion method.  Related Posts : How to Manage Working Capital? Short Term...
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