It’s been common for decades that accounting work was limited to bookkeeping and audition tasks, for now, accountancy involves numerous branches and types, and accountants are the main financial professionals that rule and carefully manage all spheres of business.
There are numerous directions in accountancy for the young specialist to pick from but the true specialist should be versed in all of them to master the profession. This is exactly why we prepared accounting quiz for the young specialists, containing 20 questions derived from various accountancy areas. Go ahead and don’t forget to make you friends jealous with the results! Good luck!
Common accounting practice problems
Accounting is not one of those disciplines that can be easily learned, especially due specific issues that accompany profession and they are called accounting practice problems. There’s lots of literature that should be studied in accountancy even for the newcomer, the hardest part, however, is related to practice and knowing how to implement theory into it in order to get the problem solved so that in certain moments you might need a decent accounting assignment help. Be ready that no matter what accounting direction you will choose in the future, you’ll always be bound to solve the following issues:
- Working with transactions that change the accounting equations
- Defining assets, liabilities, equity, revenue and expenses
- Understanding the difference between cash basis and accrual basis accounting
- Compiling the income statement using revenue and expense transactions
- Using the balance sheet and the income statement
Which accounting direction to choose?
There’s a fairly wide field of accountancy you can specialize in and lots of colleges and universities that can provide you with an accountancy degree, just to mention: Mississippi State University, University of Delaware, Ohio State University, California Polytechnic State University and many others.
There are main types of accountancy, you probably know about, like:
Financial Accounting is also known as financial reporting that includes processing the information for the external needs and takes the form of financial statements, operating on the basis of GAAP (Generally Accepted Accounting Principles). First of all for this accountancy area you need to learn all about accounting conventions, – the rules regulating financial statements preparations.
Management Accounting is aimed to be used internally, for the particular company usage. The information received in the management accounting is more precisely structured and has the narrower focus. An average appropriate form is a budget or a forecast based on past experiences and practices, all coming as part of future planning.
Governmental Accounting is also known as public accounting or federal accounting and is aimed to be used in the public sector. The public accounting is also highly needed because of the task of separation of state-owned objectives and private ones, individual rules are needed in various jurisdictions.
Tax Accounting solves the tax related issues and is governed by the tax rules of jurisdictions. It happens those rules are not the same with those governing the preparation of financial statements for public. In this area accountants adjust the financial statements to account for the differences with rules prescribed by the tax laws, the processed information furtherly is used by tax professionals, who can estimate company’s tax liability and use it for tax planning.
Forensic Accounting. This is an auditing and investigating type used for litigation or disputes. In cases of financial issues or fraud forensic accountants witnesses in courts for criminal disputes that demand professional financial loss assessments. Thus, forensic accountants are mainly hired for insurance claims management, personal injury claims, fraud and other claims financial matter loss (e.g. business valuation).
Project Accounting is created for tracking the progress of the financial side of the project that is implemented via financial reports. Project management involves project accounting as an integral part of its functioning. Every launch of the project is usually accompanied with the financial analysis of it to ensure the project will be successful in the future. For companies that function on the project basis, project accounting can give additional advantages and benefits on the market competition.
Social Accounting also known as Corporate Social Responsibility Reporting and Sustainability Accounting and is implemented in the form of environmental reports accompanying by the annual reports. It is a relatively young sphere of accountancy that appeared as a result of growing public consciousness.
Common terms for accounting sphere
Accounting like any other sphere is operated on certain terms and professional notions and as a young specialist, you’ll have to familiarize yourself with them and learn the specifics. Here are some of the most common for the accounting:
Accounting Cycle. The accounting cycle is the natural course in the accounting events recording. Accounting cycle is the typical cycle for the company including steps facilitating the transaction processes and stage with financial statement involving. Within the accounting cycle, general ledger and the trial balance records are used.
A Reporting Cycle. A reporting cycle is the time span during which the financial statement should be covered that usually takes month, quarter and year. The same reporting period is used by the companies every year in order to compare the results to the previous periods.
Balance Sheet Budgeting. Balance Sheet Budgeting is made for reflecting the financial state of the company at the end of the year. By merging the other balances of long-term assets liability, and equity of stockholders’ accounts Balance Sheet Budgeting is prepared. Balance Sheet Budgeting helps to predict the activity for a budgeted period and identify balances in current asset.
Accounting Process. For recording the business transactions there are 3 separate types of transaction used in accounting that then set to the financial statements. There are 3 transaction types that accompany accounting process:
- the first transaction type – to reserve previous period entries
- the second group records individual business transactions
- the third group is for closing the books procedure and financial statements producing
Accounts Receivable is the general term helping to describe the money sum the company received from clientèle. The money referred to business accounts as the product or service is delivered. The time span varies from few days to a year so that receivables show the line of credit the company has extended.
Asset is a value that a company owns, (material values usually include cash, patents, computer systems) and other tangible items of the company.
Liability – the money resources that the company owes (e.g. mortgages and loans).
Inventory – the property list of the company, including and other material goods in stock.
Lease is an agreement between two parties about the property rent. The contract itself states the general conditions and details, stating on what basis the liaise relationship is functioning. Conditions include: number of months or years and time spans of the regular payments.
An Investment is an asset made with the purpose of future value generation such as income or material values, in other words, purchasing of the goods that have the future value and can’t be consumed the day of purchase.
Liquid Investment. An investment that one has immediate access to, either the ability to BUY or sell the investment (such as a stock or mutual fund) or the ability to access and withdraw funds (such as a savings account).
Long Term Investment. The long-term investments also include company’s real estate purchases, stocks and bonds, it also can be cash that is intended to be retained for one year and longer. Different from the long-term investments, the short-term investment account has high chances to be sold in the short period of time.
Valuation of Fixed Assets. For the purpose of the correct evaluation of the fixed assets such as capital goods valuation of fixed asset has been developed as a technique. However, valuation of fixed assets is clearly distinguished from planned depreciation, because there’s a recorded decline assets value tied to its age.
Even though learning accountancy is not a piece of cake as you’ll be dealing with a meticulous process of recording, calculations and evaluations the good accountant is always the crucial key for the company for the business success, big, medium-sized or small. Even if you decided to learn accountancy for the personal purposes or starting your own business knowledge in accountancy will be the worth of gold. For the efficient learning process as a future specialist, you will be constantly challenged with practice assignments that will contribute the better material understanding and digesting.