ACCOUNTING FOR KIDS

Many people hear accounting and think of an office full of file cabinets and cubicles, thus its far more complex. Accounting covers far more ground than the average person may imagine. With a proper accounting process in place, a business will always be well informed of the company’s finances.

Accounting is a business aspect that affects numerous corporation and individuals all around the world. In the business world today, companies use the accounting process to record data relative to the finances of the company. Accounting tools such as balance sheets and invoices, help companies keep track of spending, profits and loses; information that is imperative to their success. This information is later passed on to investors and government branches to determine how good the company is really doing.

 The government in turn uses this information to calculate how much taxes are owed by the businesses and investors decide if the company is worth investing in. Many business entities such as suppliers, vendors, investors, creditors and even governments have become very accustom to relying on accounting information to make business decision also. According the textbook, companies use information obtained through accounting to determine if it’s feasible to expand, downsize, layoff, or hire new employees (Editorial Board, 2012, p. 4) Individuals generally familiarize themselves with accounting through profession as an accountant.