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Learn accounting for free

accountingcoach.com

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Re: Learn accounting for free

#11

Post by augiemagic »

goodlinks wrote: post #6
marton_s wrote: post #3

I'm a software engineer who moved into freelance consulting a few years ago (I do back-ends and front-ends for mobile and web, nothing finance specific other than occasional credit card payment integrations). It's been a roller-coaster in many regards and one of the highlights is having learned a lot about bookkeeping, taxes, financial planning and everything that comes with running a small business in general. (Aspe…

Imho anyone working on business applications could do with this. I get frustrated how naive so many software tools are regarding fincial controls and how developers dont know that so many data reconciliation issues were solved decades or centuries ago by accountants. Same goes for basic infrastructure and configuration knowledge to a certain extent:)

This sounds like something I'd be interested in learning more about. Do you have a couple examples of said data reconciliation issues, and the corresponding accounting approaches?

Re: Learn accounting for free

#12

Post by john61 »

augiemagic wrote: post #11
goodlinks wrote: post #6

Earlier quoted context omitted.

Imho anyone working on business applications could do with this. I get frustrated how naive so many software tools are regarding fincial controls and how developers dont know that so many data reconciliation issues were solved decades or centuries ago by accountants. Same goes for basic infrastructure and configuration knowledge to a certain extent:)

This sounds like something I'd be interested in learning more about. Do you have a couple examples of said data reconciliation issues, and the corresponding accounting approaches?

Not the OP. But in my experience, a lot of people do not know about double entry bookkeeping, which solves a lot of problems people have trying a home made excel bookkeeping. It is not more work to do, but you have to learn a little bit about the concepts. Once you know them, it seems incomprehensible that others make errors that have been solved hundreds of years ago.

Re: Learn accounting for free

#13

Post by tomnipotent »

rahimnathwani wrote: post #9

Background: I'm a qualified accountant, and have taught courses on accounting and finance. My thoughts on OP: I read through the first two parts of the first course on this site: - Part 1 Introduction to Accounting Basics, A Story for Relating to Accounting Basics - Part 2 Income Statement Based on what I read, I could not recommend this. You could get to the end of the 'income statement' part, without encountering a…

I do not believe that either GAAP or IFRS has a standard definition for "profit". Even GAAP under 703(a) refers to it as net income (and several other related numbers like gross profit).

Re: Learn accounting for free

#14

Post by rahimnathwani »

tomnipotent wrote: post #13
rahimnathwani wrote: post #9

Background: I'm a qualified accountant, and have taught courses on accounting and finance. My thoughts on OP: I read through the first two parts of the first course on this site: - Part 1 Introduction to Accounting Basics, A Story for Relating to Accounting Basics - Part 2 Income Statement Based on what I read, I could not recommend this. You could get to the end of the 'income statement' part, without encountering a…

I do not believe that either GAAP or IFRS has a standard definition for "profit". Even GAAP under 703(a) refers to it as net income (and several other related numbers like gross profit).

Yes profit is the same as net income.

But you wouldn't know that if you read those two sections of the text. They use the word 'profitability' several times, without ever defining it.

Right at the end of part 2 (income statement), they say this:

"The difference (or "net") between the revenues and expenses for Direct Delivery is often referred to as the bottom line and it is labeled as either Net Income or Net Loss."

The above is true, but it's kind of hard to grasp for someone whose only exposure to accounting is this site. And the previous sentence again refers to 'profitability' without being explicit that 'profit' and 'net income' are the same thing.

Re: Learn accounting for free

#15

Post by mgkimsal »

marton_s wrote: post #3

I'm a software engineer who moved into freelance consulting a few years ago (I do back-ends and front-ends for mobile and web, nothing finance specific other than occasional credit card payment integrations). It's been a roller-coaster in many regards and one of the highlights is having learned a lot about bookkeeping, taxes, financial planning and everything that comes with running a small business in general. (Aspe…

I've never been 'afraid' of numbers/finance as such, but typically have operated on the smaller side of things enough where it hasn't been too much of a burden. I've had multiple financial folks in the family (accountants/cpas/cfos/etc) such that when I've had questions, I have trusted people I've turned to, which has been more than enough.

About 10 years ago I brought on an outside accountant to handle my small business stuff. They do the final 'paperwork', but it's forced me to become a bit more diligent about financial housekeeping stuff - documenting purchases, keeping tax forms, etc. And I try to never let things go more than a few weeks before reviewing (primarily expenses). Part of the 'dread' of financial stuff was having to wade through a year's worth of paperwork. Keep ahead of that and working with an external accountant has made all this more of an annoyance than anything else.

Re: Learn accounting for free

#16

Post by nightski »

rahimnathwani wrote: post #14
tomnipotent wrote: post #13

Earlier quoted context omitted.

I do not believe that either GAAP or IFRS has a standard definition for "profit". Even GAAP under 703(a) refers to it as net income (and several other related numbers like gross profit).

Yes profit is the same as net income. But you wouldn't know that if you read those two sections of the text. They use the word 'profitability' several times, without ever defining it. Right at the end of part 2 (income statement), they say this: "The difference (or "net") between the revenues and expenses for Direct Delivery is often referred to as the bottom line and it is labeled as either Net Income or Net Loss."…

If you go to the actual section on financial statements/income statement it breaks it down much further which is what I would expect.

Re: Learn accounting for free

#17

Post by Closi »

rahimnathwani wrote: post #14
tomnipotent wrote: post #13

Earlier quoted context omitted.

I do not believe that either GAAP or IFRS has a standard definition for "profit". Even GAAP under 703(a) refers to it as net income (and several other related numbers like gross profit).

Yes profit is the same as net income. But you wouldn't know that if you read those two sections of the text. They use the word 'profitability' several times, without ever defining it. Right at the end of part 2 (income statement), they say this: "The difference (or "net") between the revenues and expenses for Direct Delivery is often referred to as the bottom line and it is labeled as either Net Income or Net Loss."…

Well, net profit is the same as net income.

Gross profit is different.

Re: Learn accounting for free

#18

Post by jimnotgym »

augiemagic wrote: post #11
goodlinks wrote: post #6

Earlier quoted context omitted.

Imho anyone working on business applications could do with this. I get frustrated how naive so many software tools are regarding fincial controls and how developers dont know that so many data reconciliation issues were solved decades or centuries ago by accountants. Same goes for basic infrastructure and configuration knowledge to a certain extent:)

This sounds like something I'd be interested in learning more about. Do you have a couple examples of said data reconciliation issues, and the corresponding accounting approaches?

An easy example. In a well designed database that represents an accounting ledger, debits are positive numbers credits are negative. With double entry accounting, if everything is correct the entire ledger sums to zero at all times. It is trivial therefore to know if an error crept in to your system, maybe something posted only half the entry before erroring (btw always post a complete double entry inside a database transaction).

Re: Learn accounting for free

#19

Post by rahimnathwani »

rahimnathwani wrote: post #9

Background: I'm a qualified accountant, and have taught courses on accounting and finance. My thoughts on OP: I read through the first two parts of the first course on this site: - Part 1 Introduction to Accounting Basics, A Story for Relating to Accounting Basics - Part 2 Income Statement Based on what I read, I could not recommend this. You could get to the end of the 'income statement' part, without encountering a…

If you're a mathy person, you might find this brief explanation is enough to get going. Where I say 'you', I mean 'your company', not you personally.

* Assets: things you own (e.g. tractor, money in bank, money owed by customers)

* Liabilities: things you owe (e.g. unpaid supplier bills, loan owed to bank)

* Assets and liabilities are both measured in a single currency (e.g. $).

* Equity (aka 'book value'): A measure of the value of the company. Calculated as Assets minus Liabilities.

Two ways to write the equation above:

* Equity = Assets - Liabilities

* Equity + Liabilities = Assets

Equity changes in response to (i) company operations, and (ii) financing activities.

Financing activities are things like:

- selling new shares

- buying back shares (or paying dividends)

- borrowing money (bank loans, or issuing bonds)

If there were no financing activities in the period, then profit is the derivative of equity with respect to time. It's a measure of the change in (book) value over a period.

If book value went up, you made a profit. If book value went down, you made a loss.

(Of course, book value would also go up if you just sold some shares, and profit doesn't count those changes, as they're just financing activities.)

Re: Learn accounting for free

#20

Post by rahimnathwani »

nightski wrote: post #16
rahimnathwani wrote: post #14

Earlier quoted context omitted.

Yes profit is the same as net income. But you wouldn't know that if you read those two sections of the text. They use the word 'profitability' several times, without ever defining it. Right at the end of part 2 (income statement), they say this: "The difference (or "net") between the revenues and expenses for Direct Delivery is often referred to as the bottom line and it is labeled as either Net Income or Net Loss."…

If you go to the actual section on financial statements/income statement it breaks it down much further which is what I would expect.

Which part of which section? (I only looked at section 1, parts 1 and 2.)
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