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Our today clinical tutor will be on principles of accounting:

1. What is account/accounting and accountancy?
2 Who are the statement of account users and why?
3 Classification of account

From experince, we have found that definations of account, accounting and accountancy have become problems to many students and this has led to inability of the students to have clear pictures of what the pratice of accounting is. However, in today class we will explain and define each one of them and see how they are related.

What is account? In a layman language, account can be simply called a report or history. Of cause in accounting profession, it is also known as report or history but not just only report or history , it is a kind of report that is governed by rules and regulations on how it should be carried out.

Account is history or report because everything about it is what has already occured not what outght or must occur but what has already occur and ready to be converted into financial information.

Account can be simply defined as systematic process of measuring, analysing, interpreting, selecting, collecting, communicating, reporting and preparing of financial statement of a particular organisation for the users.

ELEMENTS
Let look into what each element in the defination means and what makes it part of the defination, The elements are:Systematic Process, measuring, analysing, interpreting, selecting and communicating, reporting and preparing of financial statement.

!) Systematic Process: Account is a systematic process because, it has stable and fundamental rules that are recorgnised by the pratitioners all over the world, the rules make it to be so rigid that it can not fail out of systemitisation. Its regularity does not give rooms to arguments but improvement and that makes it to be systematised.

!!) Measuring: In accounting profession, there are many variables, that must be compared, diffrentiated, related, divided, added and substracted all these can not be done without measuring values agaist values. Therefore in accounting profession measuring of data and converting them to financial information is paramount and that makes the measuring part of its elements.

!!!) Analysing: Someone who watches football will have ideal of what analysis means. Analysis is a way of making a whole body of big information into understable smaller size. in other word, we can say it is a way of summerising a large quantity of information into small, explainable, logical and technical format. So, analysis in account enables us to summerise the whole body of information in one calendar year into a page of paper, Analysis makes account to be logical and easy to understand yet analysis makes account to be technical, to understand it, you need some level of technical skill.

IV) Interpreting: Accounting terms are very technical, financial information is very complex and comprhesive, therefore if all these terms are not done in a way that they can be understood, then we can say accounting profession has failed it purpose, we can say our finance is not saved and it will be harder to control wastage, embezzlement and corruption in our society and business. Therefore, interpretation has brought accounting understanding to the step doors of non accounting background individuals, no matter your profession, accounting interpretation will give you pictures of what Statement of finance is.

v) Selecting: In accounting, there are hundreds of data shouting pick me, pick me but in accounting profession we dont pick as we wish, but we select as the rules demand, we have to select data/items of same class, when we are trying to prepare account, for example if we are preparing depreciation account we all know that we don't have any reason to add trading account items. The selection is based on class of account and that makes account systematic and technical, you can not take that away from account.

vi) Communicating: A company Statement of account is a best way to reach out to statement of account users. Account communicates to people through all sorts of statement, account is one major means of communication to tell stakeholders what is happening to a company, with statement of account, the future, present and the future situation can be communicated to the stakeholders...

vii) Reporting: What happened in our company can be only and be best explained by writing accounting report, accounting report tells the outside world what has happened to a company in the past, the reasons, the effect and benefits so, the stakeholders will be able to know what to do

viii) Preparing of Financial Statement: After all the above elements have been put in place, use and mind then preparation of account comes in, preparation of account is the conclusion of all above and that is what everyone is waiting to see, we are all waiting to see it, it does not really matter to us what the accountants have to do before the preparation of account what matters to us as stakeholders is prepare it so we can have a copy of statement of account. De Premier Academy[/quote]

What is Accounting? when you are asked to prepare a particular account, there must be a process, a generally accepted process, an act that you must follow, procedure that it must take you to do it. That process or procedure can be called accounting. So, accounting process or act of preparing account.

In order way, Accounting or accountancy can be explained to be a discipline and or a profession just like economics, medicine, law. That is why some people go to University to study accounting or accountancy because it is a profession. Nobody can go to school to read account but accounting or accountancy.

Objective of this topic
i) At the end of this topic, Students should be able to understand, explain, define and redefine account, accounting and accountancy
ii) Differentiate between account, accounting and accountancy
iii) Students should be able to understand the elements of definition and able explain them

Do you see any grammatical and alphabetical error? Please bear with us we are trying as much as possible to install software that can edit on our systems

De Premier Academy professorsaca at gmail.com
Please we are sorry for the grammatical or alphabetical errors you may find in this class. We will try to make it better next class

2 Who are the statement of account users and why? Different individuals and organisations have one interest or the other in statement of account of a company below are the users and why they use the statement of account

1 Management
2 Auditors
3 Creditors
4 Host Community
5 Investors
6 Shareholders
7 Tax Authority
8 Government Agency
9 Investing Partners
10 And others

Management of a company needs the statement of account because the statement is a communication and analysis that brings understanding of where we are coming from into our memeory, recorgnation of where we are into our alertness and recommendation of where we are going to. The statement of account takes the management into memory lane, it gives them awareness of where they are and prepare them for the future. The management uses statement of account to design and redesign her strategy, and restructure her tactics to reduce risk, expenses, cost in other to be able to maxinise profit. Without Statement of account at the end of every accounting year management will not be able to make the right decision and policy.

Auditors Auditors either internal or external, need statement of account in other for them to be able to carry out their financial examination duty. All Public companies around the world are obligated to carry out financial examination (known as audit) of their companies at every accounting year and this can only be done by Chartered Accountants otherwise known as auditors. So, the audiotors are alway interested in company statement of account, if companies do not prepare their statements of account, auditors may be hungry or better still in some cases they do service of accountants with their auditing contract.

Creditors Those banks, and other financial institutions in wish the company gets loan will always and everly be interested in the company Statement of account because this will enable them to know what is going on with their investment. Don't forget that creditors are also investors, they invested their money into your company inform of loan and at the end of a particular period they are expecting their profit known as interest on loan so, these people will always be interested in the company statement of account.

Host Community The community in which the company is located will also be interested in the company account because they are suffering one polution or the other due to the presence of the company in the area, therefore the company is expected to compasate the community by providing some public commodies, so as the company is making profit the communers are exoecting her to deliever her corporate Social Responsibility (CSR) for this reason the host community is at the gate waiting for a copy of the company statement of account

Investors There are people out there with multibillion of naira, even in this economics recession they are looking for where to invest the money. Do you know what they do, they find companies of their choice and they check their statement of account if it is worthy to invest on, so the investors also need the statement of account of a company.

Shareholders These are the people who have already invested their money into a company with the hope that at every periodic point in time there must be a reward otherwise known as dividends, These shareholders are always interested in financial statement of the company as for them to be eble to monitor their investment.

Tax Authority Government of countries all over the world have their collectors, as we all know it is not right for companies to be making profit in a country without giveing part of it the government of the country, so for these goverment to be able to collect the tax, tax authority is needed and these authority can not carry out its duties if she does not have financial statement of the companies concerned. Therefore, tax authority is also financial statement user.


Government Agencies EFCC, ICPC, NIA, DSS, NPF, Ministry of Finance, Court, CAC, National Statistic Commission, Central Bank among others are the government agencies that are waiting to lay their hands on the statement. Without it they may not be able to esterblish some facts and they can only take action after they have been able to esterblish the fact. So, these set of agencies may not be able to carry out their duties without the financial statement and that makes them one of the financial statement users.

Investing Partners There are situation whereby two companies have to create a kind of join ventures to execute a contract, to carry out this contract, the companies involved may want to have full information about her investing partners before going into such countract with each other and this will sure call for having each other financial statement to be able to know the financial ability of the investing partners example of this is Insurance and reinsurance.

And Others[/b]add yours


At the end of this topic, you should be able to understand interests of each Financial account users and why they need financial statement
you must be able to explain the users' interest in your on way
you must be able to list all the users of account

Note: That stakeholders are also referred to as users.



[b]Classification Account[/b]knowing how each account is classified is very important because if you dont know it, you will have some difficult problem when it comes to preparing a legder account ot Principles of Double Entry under this topic we will discuss

why you must understand the class of account
and the classification of accounts

[b]why you must understand the class of account You must know and understand class of account because if you dont undderstand them you may not know whay legder accoun to be open when you are given a particular kind of question. For example if you are asked to open legder for the following questions

1) 24 January, 2015 Sold goods to Professorsaca N1000 cash
2) 27 January, 2015 sold goods to professorsaca N2000 on credit

If you look at question number one, you shall see that there are two classes of account in the question: nominal and personal account but the personal account is not a problem so it will be invisible in the ledger meaning we will not prepare account for professorsaca but we will prepare for sale account and cash account.

while in second question, in which we also have two classes of account nominal and personal account, account will be prepared for both nominal and personal account which are sales account and professorsaca account. for more details i will be right back.

Mhh you sab this one you no dey OXFORD UNIVERSITY

ogechieku:
Mhh you sab this one you no dey OXFORD UNIVERSITY

there is no yardstick to measure btw me and those in Oxford so i cant claim am as good as them. However, it is possible that i am better than their best but you know life is a cheat.

professorsacad:
there is no yardstick to measure btw me and those in Oxford so i cant claim am as good as them. However, it is possible that i am better than their best but you know life is a cheat.

Life does not cheat anyone. System and people do

ogechieku:
Life does not cheat anyone. System and people do

understood

Attend comphrensive Tutorial for noun students @Government secondary school(black and white), phase 4, Kubwa, FCT

for more info contact 08139018012

promisechild:
Attend comphrensive Tutorial for noun students @Government secondary school(black and white), phase 4, Kubwa, FCT

for more info contact 08139018012

we are not inabuja sorry. we are in ikeja lagos

professorsacad:
we are not inabuja sorry. we are in ikeja lagos

prof shey na here our leture go end ni

[b]Classification Account[/b]knowing how each account is classified is very important because if you dont know it, you will have some difficult problem when it comes to preparing a legder account ot Principles of Double Entry under this topic we will discuss

why you must understand the class of account
and the classification of accounts

coming soon