Basic Difference between Public Accounting and Nonpublic Accounting

When you are to pursue your studies in accounting and consider it to be your future work, then you would be left with two options, you have to choose from public accounting and non-public accounting. When you are a public accountant, you would be acting as a third party who would examine the accounts prepared by any concern, while as a non-public accountant, you would be maintained the accounts of any concern on behalf of the concern.
If you know the difference between public accounting and non-public accounting, it would be easy for you to pursue one.   

Public Accounting and Nonpublic Accounting

Being a student pursuing Public accounting, you would be trained to analyzing the accounting system, collecting various evidences, and testing out if all the assertions are correct. You would be trained of the accounting standards and need to check those.
However, if you take private accounting or non-public accounting as your specialization, you have to learn about the accounting transactions, recording them and maintaining them. Your knowledge would be limited to those areas where you would be accountable.
Certification and Experience
For being pursuing public accounting you would need certification from CPA or certified public accountant, whereas a private accountant would not need any such certifications. Depending upon the range of clients that you have, you experience would vary when you would be pursuing the job of public accountant, whereas as a private accountant your experience would be confined to the type of industry you are working.
Other differences
Apart from the basic differences mentioned, in public accounting, the work space would vary from one client to another. Hence, in some places when you can expect to have good people around you, somewhere things would be tough. In case of private accounting, you would be working with your colleagues in a more stable position where tensions would not be that much.

Again, in public accounting, there would be harsh deadlines that you have to follow, and one have to travel a lot, however, there would be no such requirement in case of private accounting. The exposure is much more in public accounting than in private accounting, thus while choosing one; you need to check out your qualities and skills.

Give example of simple balance sheet | MYACCOUNTINGINFO.NET

Financial statements have been described as the final result of outcome of transactions among specific entity, individuals and companies. The transactions could include general cash flows, purchases and sales. Several financial statement types exist, which include simple balance sheet, cash flow statement, owner’s equity change statement and income statement.

Simple Balance Sheet

Balance sheet

Balance sheet is regarded to be a statement, which describes financial position of an entity at a specific point of time, which is usually at the accounting period’s completion. It tends to depict the owners’ equity, liabilities and assets.

Equation of balanced as followed

Assets = Owners Equity + Liabilities

The equation’s two sides balance out, the reason why statement is known as Balance Sheet.

  •  Assets: These are economic benefits which would be controlled and acquired by the organization due to past transactions. The fact is that assets are tangible and include accounts receivable, equipments, inventory and cash. Assets could be broken further into long and current term. Current assets like accounts receivable and cash are assets, which could be converted to cash or benefit the organization in a year. Long term assets include inventory, equipment and land are paid off. It benefits the organization over extended time period. Accumulative depreciation is utilized on balance sheets for explaining as to how long term asset costs are ‘used up’ while running a simple or a huge business . Cost is spread across asset life. 

  •  Liabilities: It is termed as amounts that other organizations are owed to, like asset transfer, services to be provided. It also is created of long term and current liabilities. The latter is said to be those which would be paid within a year, including notes payable, accounts payable, payroll taxes and long term debt maturities. Long term debt is paid off across extended time period.

  •  Owner’s equity: It is also known as net assets. It is regarded to be the entrepreneur’s ownership rights after subtracting liabilities. Few examples include additional paid-in capital, retained earnings and common stock. 

Purpose of Balance Sheet

  • Firstly, entrepreneurs make use of balance sheets to simply analyze the capabilities and strengths of the business.

  • Secondly, it describes trends, more specially in accounts payables and receivables area. 

  • Finally, it is examined by investors, vendors and banks for determining credit amount to be provided to the entity.

What is accounting and who are the user within it?

To answer the question what is accounting, it is the system of information through which business activity, processing data on numerous reports, communication with decision makers can be done. It is a myth that accounting is a special language of business. The language should be understood by the business owners for betterment of the business. Understanding the calculation of income is the main concept of accounting
Accounting Required to Whom:

what is accounting

Accounting is a simple calculation of money to the individuals. It facilitates them to find out some cash from the lump sum amount to save every month. Accounting helps to determine the exact amount of expenditure from the salary. Even it is required every time and every footstep. 

Accounting is something special to the business owners. They use the term for setting their goal of business. For calculating the development of the target and for assigning financial adjustments accounting is required by them when they need. Financial statements provide information to the businessmen for betterment of the business and to make decision. On the basis of these statements, they can purchase advanced machines, again they can stop further investment. So accounting helps them to stay away from unnecessary mislaying of the company.

Accounting plays different role to the investors whether they invest more for a particular company or not. The investors can monitor the status of invested money through the financial statements of that particular company. Even they can invest more money in retirement plan rendered by the company or IRA contribution. Knowing the financial statements help to decide which one investment plan has to be picked. A person or a creator can use accounting for evaluating the ability of the business organization for making loan payment by reading financial statement. The individuals and business owners can get the advantages of tax deduction by reading the accounting records.

The Profession on Accounting:

The profession on the basis of accounting is really demanding forever. Every business organization and company requires efficient accountants. In that case CPA and CMA degree is needed for the aspirants to get this glamorous job.   




Sample of Accounting Equation | MYACCOUNTINGINFO.NET

Accounting equation is the very basic concept of accounting. Without this, it is impossible to understand the higher, more complex topics. Thus, when you are studying accounting equation, it is best to be proficient and fluent with all concepts and variables of this particular topic. 
Accounting Equation

It is easier to understand when you have samples and examples at hand, to work with. Although this equation is basically simple, it is the foundation upon which the whole world of accounting rests.

The equation in itself is simple. It says that the assets are always equal to the liabilities. The liabilities are that of the owner’s and also of the creditors. This equation holds true for every single transaction, without exceptions or conditions.

Explanation of the Accounting Equation

The equation in itself is not very difficult to understand. It says that the total assets equal the total liabilities. As mentioned above, liabilities can be that of the owner’s or of the creditor’s. Thus, it can also be said that the total assets equal the total outside liabilities, along with the total owner’s liabilities. Outside liabilities is another name for creditor’s liabilities. Hence, it can also be said that total assets are equal to total creditor’s equity along with the total owner’s liability. Thus, as a conclusion, it can be said that total asset equal the total creditor’s equity, along with the owner’s capital and the total income from which the total expenses must be reduced.
Total assets = Total creditor’s equity + (owner’s capital + total incomes – total expenses)

Conclusion of the Equation

When you are working out the samples of the accounting equation, it becomes evident that there are some set conclusions and results that you are bound to see. Every single transaction results or concludes in an equal effect to asset and liabilities, plus the capital. The initial balance with which you start is equal and so are the changes that arise from the equation. By the rules of geometry, the equation can also be written as Liabilities = Assets – Capital, as was established in the equation mentioned above, or even Capital = Assets - Liabilities. 



Periodic Inventory System

The periodic inventory system is mainly used by business that sell relatively inexpensive merchandise and that are not yet using any computerized scanning systems method in analyzing the cost of good sold of the merchandise. A characteristic of the periodic inventory system is that no entries are made to the inventory account as the merchandise was bought and later to be sold. 
Periodic Inventory System
When goods are purchased, separate account should be made, (ex : purchases, purchases discounts, purchases allowances and returns, and transportation in) is used to accumulate data on the net cost of the purchases only its accounting period. However, when the inventory is counted, transaction entries will be made to the inventory account to establish its proper accounting balance. 

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