Cagan - Accounting 101: from calculating revenues and profits to determining assets and liabilities, an essential guide to accounting basics

We hope you enjoyed reading this Simon & Schuster ebook.

Get a FREE ebook when you join our mailing list. Plus, get updates on new releases, deals, recommended reads, and more from Simon & Schuster. Click below to sign up and see terms and conditions.

CLICK HERE TO SIGN UP

Already a subscriber? Provide your email again so we can register this ebook and send you more of what you like to read. You will continue to receive exclusive offers in your inbox.

Thank you for downloading this Simon & Schuster ebook.

Get a FREE ebook when you join our mailing list. Plus, get updates on new releases, deals, recommended reads, and more from Simon & Schuster. Click below to sign up and see terms and conditions.

CLICK HERE TO SIGN UP

Already a subscriber? Provide your email again so we can register this ebook and send you more of what you like to read. You will continue to receive exclusive offers in your inbox.

Adams Media

An Imprint of Simon & Schuster, Inc.

57 Littlefield Street

Avon, Massachusetts 02322

www.SimonandSchuster.com

Copyright 2017 by Simon & Schuster, Inc.

All rights reserved, including the right to reproduce this book or portions thereof in any form whatsoever. For information address Adams Media Subsidiary Rights Department, 1230 Avenue of the Americas, New York, NY 10020.

First Adams Media hardcover edition MAY 2017

ADAMS MEDIA and colophon are trademarks of Simon and Schuster.

For information about special discounts for bulk purchases, please contact Simon & Schuster Special Sales at 1-866-506-1949 or .

The Simon & Schuster Speakers Bureau can bring authors to your live event. For more information or to book an event contact the Simon & Schuster Speakers Bureau at 1-866-248-3049 or visit our website at www.simonspeakers.com.

Cover Design by Erin Alex Ander

Cover Images Clipart.com

Library of Congress Cataloging-in-Publication Data has been applied for.

ISBN 978-1-5072-0292-0

ISBN 978-1-5072-0293-7 (ebook)

Many of the designations used by manufacturers and sellers to distinguish their products are claimed as trademarks. Where those designations appear in this book and Simon & Schuster, Inc., was aware of a trademark claim, the designations have been printed with initial capital letters.

This publication is designed to provide accurate and authoritative information with regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional advice. If legal advice or other expert assistance is required, the services of a competent professional person should be sought.

From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations

Contains material adapted from the following title published by Adams Media, an Imprint of Simon & Schuster, Inc.: The Everything Accounting Book by Michele Cagan, CPA, copyright 2007, ISBN 978-1-59337-718-2.

DEDICATION

To my dad, whose path I followed to success. I miss you.

You may not realize it, but accounting is a huge part of your life. If you bought this book, accounting was involved. If you grabbed a latte at Starbucks this morning, accounting was involved. If your grandmother sent you a birthday card with a $20 bill inside, accounting was involved. In fact, accounting kicks in every time you buy or sell something, pay a bill, get a paycheck, or check your bank balance. However money factors into your life, accounting helps put it in perspective. And whether youre interested in accounting for yourself, your business, or as a high-paying, in-demand career, Accounting 101 will get you started.

And contrary to the widely held belief that accountants have mind-numbingly boring jobs, accounting is truly one of the most fascinating careers in the world. Here youll learn about everything from how the terrified ancient bookkeepers kept tallies for the pharaohs to the way todays cutting-edge technology is changing the way we look at money. Youll also see how these revolutionary advances in technology have truly taken accountants away from their adding machines and endless strings of numbers, and brought them into the center of the everyday fray of running a business. Now, along with doing taxes and auditing financial statements, accounting careers include working at the FBI , developing environmental outreach plans, and steering international corporate finances.

Those leaps in technology that have brought accountants into the limelight have brought accounting closer to you, as well. On your phone you may have a budgeting app or an app that you use to track your investments. If you own a small business, you may have apps that let you take payments from customers, organize your expenses, or even update the company books on your phone while you sip a latte. Maybe you even update your numbers in the cloud or file your taxes on your smartphone. Regardless, todays technology will keep advancingand the future of accounting looks amazingly promising.

Put aside your preset ideas about accountants and accounting, because here youll find numerous entries that tell you all you need to know about the history of accounting, the exciting career paths accountants can take, the difference between debits and credits, how to read corporate financial statements before you invest, and some of the most innovative personal and business accounting apps available. So fire up your calculators because Accounting 101 is going to balance your booksand more!

Accounting is known as the language of finance. This ancient communication decodes the mysteries of money, translating complex financial concepts into clear, bottom-line numbers that anyone can use. And since were all interested in money, accounting filters into everyones life in one way or another.

For as long as people have stored food, or traded spears for pelts, theyve figured out some way to account for it. Then currency came along, which made accounting both easier and more difficult: easier because there was now a concrete way to value things, harder because trading (and the results of trading, like infrastructure and taxes) became much more complex. Despite how complicated businesses and personal finances have become, accounting continues to bring order and comparability to the chaos.

With clear record keeping and reporting rules to follow, accounting unites governments, businesses, and citizens in an economy, and keeps both the relevant information and the money flowing. Without it, we couldnt save or invest, we couldnt borrow money to buy our homes, and we couldnt grab cash out of an ATM .

In this chapter, youll meet all the different people who use accounting information, why they need it, and what they do with it; and that all starts with you and your personal finances. So lets take a look at the many different ways accounting information affects your life.