Report For Introduction to Financial Accounting
Reflective Report During the last term, i have had learned some knowledge from the subject called introduction to finical accounting. For me, this is the first time I had chance to learn this subject, before that I just heard some information about IFA by reading the FT newspaper and watching the news. When I start learning that, this subject gives me the impression that it is difficult to understand. During the past few months, I can say I already mastered some of the skills in IFA.
I can still remember the first lecture I had learned was the definition of the “Accounting Equation”, I can conclude that the most important thing you must master is you should try to distinguish the meaning of the capital, assets and liability. Assets are economic resources of the business that are expected to bring benefits for the business in the future, the Important point is it can bring you benefits in the future instead of consuming at the end of the year. Capital, we can also called owners’ equity is the economic resources that was contributed by the owners of the business to the business.
The last component is liability which is the name given to the amounts owing to these people or organizations for these assets. The format of the accounting equation is capital + liabilities = assets. When I learn this subject, I think the interesting part is the double entry which is the basic part of the whole subject. What I have learned is each transaction requires one debit entry and one credit entry and for each pair of entries: the left hand side must therefore equal right hand , only you know how to put the items into debit part or credit part can you prepare the account correctly.
In my opinion, mastering this skill essentially is very necessary for my future careers. I think the future financial professional is not limited in numeracy skills. The reason is this area is requiring the accountant have ability to be able to explain and analyze the transactions, mastering numeracy skills is essential for every accountants but I think the most important factor is having an analytical ability in order to deal with efficiently.
Back to the subject, besides the double entry, the next basic point is the transactions analysis, which is very significant to future professional, always be awareness of professional judgment and personal effectiveness. When we going to analyze one transaction, the first thing we should concentrate on is transaction whether cause stock to increase or decrease. Stock increasing consists of the purchase of additional goods and the return into the business goods previously sold. However, stock decreasing involves the sale of goods and goods bought by the business now being returned out to a supplier.
When you handle one transaction the first step is going to prepare Journals, determine nature and double entry of each of the transactions. The second step is open up T-account and post entries as you go through the Journals. Once posting complete, “Close” accounts for the month. The third step is transferring all ledgers to trial balance. It required the total of all debit balances should equal the total of credit balances. I also learn how to prepare the statement of income, according to the format gross profit= sales – cost of sales, calculate the gross profit then plus other income and minus expenses calculate net profit or loss.
The next stage is starting to prepare the balance sheet. The balance sheet comprises those accounts with balances that not included in the income statement. A properly drawn up balance sheet should have five categories of entries: Non-current assets, Current assets, Non-current liabilities and Capital. All above these skills support me to develop the technical and functional expertise gradually. The skills I have developed are all for preparing accounts manually. Tutor also takes highly of the importance of using MYOB project.
In our day-to-day studying time, most of time we prepare accounts manually, but we also should try to use a computer package to prepare accounts. Let me indicate my feeling when I use MYOB. When I handle one transaction I should create one computer and write related information in detail, then start to prepare a journal according to the transaction. Write the date accordingly, when I use this software, I don’t know where to start. I find the significance of understanding double entry; you should know each transaction whether is assets account capital account liability account.
If put it in a wrong entry, what we have done is all in vain. I ought to also prepare account for bank, purchase, sales and depreciation, this procedure is a little complex. When I prepare T-account at the same time I must recorded. Return back the main menu select the report, it shows the trial-balance, different statement of income and statement of financial position, all of that will appear automatically in place of preparing manually. Have ability to good use of MYOB project is very necessary, which will avoid existing of errors so as to save time and help you become professional.
Through MYOB project and prepare account manually, I am aware of the importance of numeracy skills to a future financial professional. Numeracy skill means have ability of counting correctly, distinguishing between sets of unequal quantities, operations such as subtraction and addition. So, numeracy is a foundation of the financial professional in order to make sure the transaction smooth going. Moreover, IT skills are playing an important role to the financial professional, according to Professor Jane K. Winn (2000) of the University Of Washington School Of Law, “Financial institutions were at the forefront in creating the global information economy as it exists today. ” We can conclude that finance cannot live without information technology skills. Information technology concentrates on the growth of electronic networks that exchange information. The reason why IT is so important for financial professional is that all financial transactions contain the exchange of information, the increasing popularity of online finance accorded with advances in IT fields.
After finishing the bookkeeping test, I can summarize some of my learning experience and I have my own notions in learning some of difficulty parts. The learning style I preferred is when you are taught a new topic, you should fully understand it immediately in case of delaying it into another day. In addition, you’d better do a revision at the end of the weekend; this will help you master this topic better. However, I also suffered some difficulties during the last few months, when I learn a topic called depreciation; I always confused with depreciation for non-current assets and disposal.
Therefore, . I always prepares wrong account for disposal and provision for depreciation due to the wrong depreciation figure. Though, I try to find out the effective method to solve this problem. Try to distinguish the time that owner buy or sale the machinery so as to prepare the cost account and provision for depreciation account properly. The core point is loss/profit on disposal that will always ignored. I always remind myself to balance the disposal account as the first step, after that working out the loss/profit on disposal, finally put it into the income statement.
The provision for doubtful debts account has a similar issue as the disposal account. In my view, the most annoying thing is combine the expense account with the accrual and prepayment account, it always made me crazy. But I never give up; always keep the faith to solve these problems. I think the best way to avoid this confusion is totally up to you. Once you have made a mistake, you must discover the weakness of this part and try your best to solve this problem so that you will never make the same mistake over and over again.
This method would not only be helpful for your learning in the future, but also would bring a surprise and achievability to you. Another main point is being awareness of cooperation. Through discussing with your friends, you can also easy to find the solution. My tutor helps me a lot during the last few months as well. He told me how to analyze the workshop questions step by step. When I was in trouble, he inspires me a lot and helps me to solve the problems. As the year progresses, I changed a lot. Those skills I have developed helped me become more logical and meticulous when deal with the different types of accounting transactions.
Additionally, I have made my brain more clearly by writing the reflective report. I can reflect on what I have learnt last term and which parts should I improve? After doing my learning experience, I find an effective way to prepare accounts and analyze transactions. Thinking a lot and doing more exercise will also bring me more benefits for my exam and future career.
Reference:
- Jane K. W (2000), University of Washington School of Law: Catalytic Impact of Information Technology on the New International Financial Architecture”
