Accounting for dummies reddit
Margi n means buying securities, such as stocks, by using funds you borrow from your broker. Buying stock on margin is similar to buying a house with a mortgage. How is that? Buying on margin is an example of using leverage to maximize your gain when prices rise.
Leverag e is simply using borrowed money to increase your profit. This type of leverage is great in a favorable bull market, but it works against you in an unfavorable bear market.
Because you owe more than you own, it is negative net worth. Leverage is a double-edged sword.
Suppose that you think that the stock for the company Mergatroid, Inc. What can you do? If you do that, what are the potential outcomes? This is the best outcome for you. Using margin, you will double the return on your money. Leverage, when used properly, is very profitable.
However, it is still debt, so understand that you must pay it off eventually. If the stock goes nowhere, you still have to pay interest on that margin loan. If the stock pays dividends, this money can defray some of the cost of the margin loan.
In other words, dividends can help you pay off what you borrow from the broker. Having the stock neither rise nor fall may seem like a neutral situation, but you pay interest on your margin loan with each passing day. For this reason, margin trading can be a good consideration for conservative investors if the stock pays a high dividend. If the stock price goes down, buying on margin can work against you.
If it goes any lower, you may get the dreaded margin call, when the broker actually contacts you to ask you to restore the ratio between the margin loan and the value of the securities. When you purchase stock on margin, you must maintain a balanced ratio of margin debt to equity of at least 50 percent. Expect to get a call from your broker to put more securities or cash into the account to restore the 50 percent balance.
For you, it means realizing a capital loss — you lost money on your investment. Regulation T dictates the minimum percentage that margin should be set at. For most listed stocks, it is 50 percent. Margin, as you can see, can escalate your profits on the up side but magnify your losses on the down side. If your stock plummets drastically, you can end up with a margin loan that exceeds the market value of the stock you used the loan to purchase.
If you buy stock on margin, use a disciplined approach. Be extra careful when using leverage, such as a margin loan, because it can backfire.
Keep the following points in mind:.It accompanies the video you can watch here. Open-ended investment funds are funds that allow individuals and institutions to invest in, or take their money out of, the fund on an ongoing basis. Funds might permit this on a daily, weekly, monthly, quarterly or less frequent basis.
This fund allows the investor to invest cash today and withdraw cash any day after today. The investor could have money in the fund for years or could withdraw cash next week. What is my investment worth now?
This daily dealing fund must be able to tell me, the investor, what my investment is worth on any given day. So the value of the fund must be calculated on a daily basis.
The fund must sum up the value of everything it owns, subtract the value of everything it owes and so calculate a net asset value, a NAV. The NAV calculation determines how much the investor gets when they withdraw some of their investment. How we get from that total fund NAV to my share of the fund depends on how the fund is structured. If the fund is established as a partnership, partnership accounting will allocate gains and losses to my account and on any day the net asset value of my account can be ascertained.
If the fund is set up as a company or as a trust it will be unitised. This means that investors are given units or shares in the fund at the time they invest. These shares have a value, a NAV per share.
The NAV per share changes over time. The NAV is the basis upon which investors invest or withdraw cash to or from a fund. It ensures that investors share the gains or losses equitably. Therefore its accuracy is hugely important. Fund accounting refers to the maintenance of the financial records of an investment fund. Accounting records must be kept for the investor activity, the portfolio activity, the income earned and the expenses incurred by the fund.
In addition, the instruments held by the fund must be valued regularly and fund accounting records these changes in value. The fund accounting for this activity forms the basis for the net asset valuation and for the preparation of periodic financial statements. Our focus is on the NAV calculation.
The NAV is the assets of the fund minus the liabilities of the fund.Finding your next job can be tough. In our technology-driven world, applying for jobs online while in your PJs is a convenience that is hard to resist. But a crucial component of a successful job search involves networking: getting out there to expand your professional contacts and discover opportunities. Setting specific, measurable goals can provide a path to improve your career and achieve certain accomplishments.
You can use goal setting when given a certain task or project, or to personally advance in some way. You can set goals towards promotions, creativity, education and many other various ways to improve your life and career. For busy hiring managers, your resume provides a snapshot of your career and is often the determining factor in whether you land an interview. If job search is a journey, a stellar resume is your passport.
Indeed Community. You are going into a tight job market only because employers expect more of it's incumbents,,,,,I recruit and have more than a few openings, but my problem is coming up with great candidates,,so go figure. Reputable,is the key consideration. So I asked you would you rather have a plumber fix your drain, if he used to never worked on fixing drains before? Preview Exit Preview. You must be signed in to add attachments.
I refuse to believe ill be happy with B. Might as well just start my own consulting firm now Guess its a bad time to cross the border for an accounting job down south. Seriously, not making light as similar challenges exist north of the border. All the best in your search. From what I can gather, you have to get your CPA to work in accounting right now. There is no way of getting hired otherwise short of connections of course. I am making the desision right now to make that leap.
Its a huge comitment. CPA's really dont make that much per hour. I was making that selling appliances at Lowes. Anyway, Im not sure its worth the sacrifice.
Until I have a sure way of making a respectable living though, its not off the table. I was in the same situation as you after graduation in Since then, I've noticed there are more job opportunities so don't give up and keep looking and applying even if they require a year or two of experience.
Best bet is to try to get an entry level clerical job that may not pay well but will count towards experience try looking through company websites of industries that might interest you- the hotel industry seems to always hire accountants.
Don't give up and keep an open mind when it comes to finding work and gaining experience! That is true unfortunately and many accounting jobs also require Specific experience in that particular industry ex. I made the switch at 34 and it was not hard I am 35 and find that alot of firms won't look at me because I have 'temping' for too long -- since end of and because I do not have a CPA.
Yes, I constantly get asked this question and it is asked in the most patronizing condescending tone. Even ten years ago when I was in grad school and chose to temp in my field at a major investment bankthey the recruiters couldn't comprehend why I chose to temp back then and were more fixated on 'why am I temping' rather than the fact that I earned a graduate degree in my field while working.
I am working as a temp now at a major bank but the position was misrepresented by the client when she interviewed me especially about the 'good possibility to go perm' when they have hired many people in the past month as straight perm.From Intermediate Accounting For Dummies. Intermediate accounting builds on basic financial accounting skills. The material that intermediate accounting covers, however, goes beyond basic accounting scenarios. Think of financial accounting as the appetizer and intermediate accounting as the main course.
Intermediate accounting delves into the more complex, more challenging aspects of accounting practices. It covers topics and accounting situations that go beyond the basics, including the following:.
Time value of money: Intermediate accounting involves advanced time value issues, such as deferred annuities and long-term bonds. Annuities are multiple payments over a period of time that you either make or receive.
Deferred annuities are a type of annuity contract that delays payments to the investor until the investor elects to receive them. Long-terms bonds are bonds a business holds in another company that extends out more than twelve months into the future.
Accounting for retail inventory: Inventory cost-flow assumptions, which are how the cost of inventory expenses on the income statement, are a big topic in financial accounting.
An interesting expansion on this topic in intermediate accounting is accounting for retail inventory. The retail inventory method uses a cost ratio to convert the ending inventory valued at retail to cost. Basically, this works by taking goods available for sale at cost and dividing them by goods available for sale at retail.
You can then multiply sales by the resulting percentage to come up with ending inventory at cost. Accounting for property, plant, and equipment: Intermediate accounting gets into the nitty-gritty of accounting for an involuntary conversions such as theft. Accounting for income taxes: No one likes income taxes and your financial accounting textbook discusses this topic minimally.
Intermediate accounting to the rescue! Intermediate accounting covers how to calculate the difference between financial and tax accounting. A major difference between the two is financial and tax depreciation. Financial depreciation takes the long-way home while tax depreciation takes the short cut through the vacant lot! So net income between the two will differ. Your intermediate accounting textbook homes in on generally accepted accounting principles GAAP in the United States, but, where applicable, points out international perspectives for accounting for the same events.
Both positions are noted because GAAP and international accounting standards are on the road toward convergence, and one set of global accounting standards could evolve. Here are some key differences between U. Extraordinary items: These items are unusual in nature and infrequent in occurrence. An example could be losses resulting from a major casualty such as a fire. US GAAP allows special financial reporting for these types of events while international standards do not.
Accounting for leases: Whether a company expenses lease payments or treats them like loan payments divvying up the payment between principle and interest under US GAAP depends on GAAP capitalization rules. International standards are more user-friendly, and look at the basic facts and circumstances of the lease to determine whether lease payments are expensed or capitalized. Tax deferrals: Deferrals arise on the balance sheet because of the difference between financial and tax income.
US GAAP allows for the classification of the deferrals as current or non-current, depending on the situation. International standards only allows for non-current treatment of these deferrals.
For example, current assets like cash list before property, plant, and equipment. However, companies using international standards often list non-current liabilities before current ones. Maire Loughran is a certified public accountant who has prepared compilation, review, and audit reports for fifteen years.
A member of the American Institute of Certified Public Accountants, she is a full adjunct professor who teaches graduate and undergraduate auditing and accounting classes.Accounting books are the different books having the information about what is the accounting, types of accounting, ways to do accounting and the other related concepts where some of the books include books such as Accounting Made Simple by author Mike Piper, The Tax and Legal Playbook: Game-Changing Solutions To Your Small Business Questions by author Mark J.
However, imagine numbers and information processed in a language that is very easy to understand. Well, this is the handy work of great authors who have made finance a very interesting subject for even the dumbest of students among us.
If you choose to defer I believe you need to go through some of the best accounting books to change your mindset. Well, I would not make you do the research work, take a look at the top 10 best books on the accounting of all time, read them to agree with me on this topic very soon. Please note that some accounting books are for beginners and others are for intermediate to advanced users. The first baby step into the accounting world needs to be cautiously tread considering you do not want to run away with fright with the in-depth details and heavy terminology.
This book by Piper keeps things straight and simple with practical and simple examples that help elucidate the concepts without the unnecessary jargon of the technicalities.The 5 Types of Accountants
The basic concepts of topics like Accounting Equation and its significance, reading and preparing financial statements, calculation and interpretation of several different financial ratios and the concepts and assumptions behind Generally Accepted Accounting Principles GAAP are explained sufficiently in a concise manner.
The accounting textbook is a quick read for the early beginners gripping them till the end as well as helping the novice to refresh their concepts. Strathern writes history as if it is a piece of the lively picture.
Top 10 Best Accounting Books of all Time
He uncovers the definite progression of mathematics and economic theory, from double-entry booking keeping to the discovery of standard deviation and the various applications of probability theory. The author does a great job of putting this boring information in an interesting format and thereby providing a deep understanding of the subject through the men of history. A one-stop solution for all the problems is the easiest answer to many of our issues. How about solving all your accounting problems in one go?
Accounting All-in-one for Dummies is the right reference in this regard. The book provides a speed cruise of all accounting topics from the basics of debits and credits to more complex issues like amortization and regulation. The text is simply written and a very easy read. The book also covers topics such as ways to report on financial statements, how to make savvy business decisions, auditing and detecting financial fraud.
All this is made easy with simple examples and small business scenarios. This accounting textbook is a good investment for the future by any accounting professional, MBA students or small businesses for a quick reference. Shim Ph.The purpose of accounting is to accumulate and report on financial information about the performance, financial positionand cash flows of a business.
This information is then used to reach decisions about how to manage the business, or invest in it, or lend money to it. This information is accumulated in accounting records with accounting transactionswhich are recorded either through such standardized business transactions as customer invoicing or supplier invoices, or through more specialized transactions, known as journal entries. Once this financial information has been stored in the accounting records, it is usually compiled into financial statementswhich include the following documents:.
Income statement. Balance sheet. Statement of cash flows. Statement of retained earnings. The results shown in financial statements can vary somewhat, depending on the framework used. The framework that a business uses depends upon which one the recipient of the financial statements wants. The accountant may generate additional reports for special purposes, such as determining the profit on sale of a product, or the revenues generated from a particular sales region.
These are usually considered to be managerial reports, rather than the financial reports issued to outsiders. Thus, the purpose of accounting centers on the collection and subsequent reporting of financial information. Books Listed by Title. Articles Topics Index Site Archive. About Contact Environmental Commitment.
Fundamentals of Financial Accounting for Dummies 2019
Once this financial information has been stored in the accounting records, it is usually compiled into financial statementswhich include the following documents: Income statement Balance sheet Statement of cash flows Statement of retained earnings Disclosures that accompany the financial statements Financial statements are assembled under certain sets of rules, known as accounting frameworksof which the best known are Generally Accepted Accounting Principles GAAP and International Financial Reporting Standards IFRS.
Income tax expense Average inventory calculation. Copyright External financial statements, including the income statement also called the profit report comply with well-established rules and conventions. By contrast, the format and content of internal accounting reports to managers are wide open.
All businesses include sales Every profession has its own lexicon. To communicate with your audit peers and supervisors, you must know key au Intermediate accounting builds on basic financial accounting skills. Scrap has a low Following these simple st Cost accounting is a valuable tool you use to reduce and eliminate costs in a business. You also use cost accounting Any asset that has a lifespan of more than a year is called a fixed asset.
All businesses use equipment, furnis Get a firm understanding of key bookkeeping and accounting terms and phrases before you begin work as a bookkeeper. Search Submit. Select a topic.
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