How to Become an Accountant

There are many different ways of becoming an accountant. Usually you can go to the University for three years and then you study for three years for the accountant's exam. But you must have a job in the accountant’s office while you are studying. You will be a qualified accountant when you pass your exam and have worked for three years.

VII. Read the texts «Accounting», «Financial Accounting or Book-keeping», «Accountants, Chief Accountants, Book-keepers and Controllers», «Auditors and their Reports» with a dictionary. Make a list of new words to enrich your vocabulary.

Accounting

Accounting shows a financial picture of the firm. An account­ing department records and measures the activity of a business. It reports on the effects of the transactions on the firm's financial con­dition. Accounting records give a very important data. It's used by management, stockholders, creditors, independent analysts, banks and government.

Most businesses prepare regularly the two types of records. That is the income statement and balance sheet. These statements show how money was received and spent by the company.

One major total for the analysis of accounting records is ratio analysis. A ratio analysis is the relationship of two figures. In fi­nance we operate with three main categories of ratios. One ratio deals with profitability, for example, the Return on Investment Ratio. It is used as a measure of a firm's operating efficiency.

The second set of ratios deals with assets and liabilities. It helps a company to evaluate its current financial position. The third set of ratios deals with the overall financial structure of the company. It analyses the value of the ownership of the firm.

Financial Accounting or Book-keeping

An accountant has to account for what happens to the compa­ny's money. So, financial accounting, if we want a definition, is concerned with recording events as they happen or have recently happened. As for the alternative term, book-keeping means the books, cash books and the rest. Keeping them properly and keep­ing them up to date.

Accounting is often said to be the language of business. It is used in the business world to describe the transactions entered into by all kinds of organizations. Accounting terms and ideas are there­fore used by people associated with business, whether they are man­agers, owners, investors, bankers, lawyers, or accountants.

The actual record-making phase of accounting is usually called book-keeping. However, accounting extends far beyond actual making of records. Accounting is concerned with the use to which these records are put, their analysis and interpretation. An account­ant should be concerned with more than the record-making phase. In particular, he should be interested in the relationship between the financial results and the events which have created them. He should be studying the various alternatives open to the business, and be using his accounting experience in order to aid the manage­ment to select the best plan of action for the business.

Probably there are two main questions that the managers or owners of the business want to know: first, whether or not the busi­ness is operating at a profit, second, they will want to know whether or not the business will be able to meet its commitments as they fall due; and so not have to close down owing to lack of funds. Both of these questions should be answered by the use of the accounting data of the firm.