Corporate Finance Case Study 1

ACC501- Accounting for Decision Making

Abstract

In business, accounting is one those words that many dread to hear. “People fear what they don’t understand and hate what they can’t conquer.” (A. Smith) NOT knowing the unknown is what people are most afraid of. With its numerous aspects, procedures and components, Accounting itself, can be very scary to encounter if you don’t fully understand it. I, myself, fear it because up until this point, I fell into that previously stated category of “NOT” knowing. Assuming that it was just all adding and subtracting, I considered myself doing well if I were on the plus side, so to speak, and that’s just dealing with my own checking account. If that was the case, and it was THAT simple, we would all be Accountants. In the aspect of owning a business though, your knowledge of accounting plays an important role in knowing and understanding your financial reports and where your money is coming from and going. It also helps investors better understand your company so as to make their decision to invest. Sure, you could hire accounting organizations or financial institutions to do the work for you but after reviewing the material on accounting for this course, I feel it would be much more rewarding and gratifying to do it on your own as a business owner. “There is a sort of gratification in doing good which makes us rejoice in ourselves.” (Michel de Montaigne) I don’t think there is a better feeling in the world or a better way to say it. Knowing exactly where every penny is being spent or invested is Key, thus omitting the fear of “NOT” knowing to KNOWING.

Introduction to Finance Accounting

Unbeknownst to me, there are two types of accounting standards. Based on the course provided information, there is Financial Accounting, which abides by GAAP (Generally Accepted Accounting Principle) standards. Then there is Managerial Accounting standards that require no rules and/or standards....