MBA Accounting

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The basic step to fortify your understand of accounting is to be familiarize with some of the commonly phrase accounting terms which are appended below ( linked to my other blog). We definitely don’t need to be an Accountant as reiterated, however the end objective of the mba-managers particular those without any financial accounting knowledge is to have a good grip of the financial statements so the need to apprehend the following commonly used accounting terms/phrases:

Managers who are accountable for their business units need to at least understand the difference between Cash Basis Accounting Method And Accrual Method

otherwise it will cause disastrous impact to announcing the financial results re: costs not properly aligned/matched to the revenue generated.

Another critical accounting terms is to:-

know the difference between Capital And Revenue-expenditure

otherwise people might accuse you of creative accounting as capital versus revenue expenditures might be wrongly aligned resulting in announcing disastrous accounting profits/losses !

When reading the daily papers in the financial sections, you will often hear of companies’ financial controllers announcing wrong results due to accounting fundamental errors or changes in accounting policies. Hence, the need to:-

: Understand What Are Accounting Fundamental Errors;

: What Are Changes In Accounting Policies;

: Understand the difference between Change In Accounting Estimate Versus Change In Accounting-policies;

Besides, you might hear terms like fair value,historical cost,principal based and rule based accounting standard hence the need to understand the appended terms:

: Fair Value Versus Historical Cost

: Principle Based Versus Rule Based-Accounting Standards

This entry was posted on Sunday, October 14th, 2007 at 2:55 am and is filed under a. Accounting Concepts. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.