Reflective report - Introduction to Financial Accounting
by
yolanda1213 (student)
Reflective Report
During the last term, i have had learned some knowledge from the subject called introduction to finical accounting. For me, this is the first time I had chance to learn this subject, before that I just heard some information about IFA by reading the FT newspaper and watching the news. When I start learning that, this subject gives me the impression that it is difficult to understand. During the past few months, I can say I already mastered some of the skills in IFA. I can still remember the first lecture I had learned was the definition of the “Accounting Equation”, I can conclude that the most important thing you must master is you should try to distinguish the meaning of the capital, assets and liability. Assets are economic resources of the business that are expected to bring benefits for the business in the future, the Important point is it can bring you benefits in the future instead of consuming at the end of the year. Capital, we can also called owners’ equity is the economic resources that was contributed by the owners of the business to the business. The last component is liability which is the name given to the amounts owing to these people or organizations for these assets. The format of the accounting equation is capital + liabilities = assets. When I learn this subject, I think the interesting part is the double entry which is the basic part of the whole subject. What I have learned is each transaction requires one debit entry and one credit entry and for each pair of entries: the left hand side must therefore equal right hand , only you know how to put the items into debit part or credit part can you prepare the account correctly. In my opinion, mastering this skill essentially is very necessary for my future careers. I think the future financial professional is not limited in numeracy skills. The reason is this area is requiring the accountant have ability to be able to explain and analyze the transactions, mastering numeracy skills is essential for every accountants but I think the most important factor is having an analytical ability in order to deal with different types of transactions efficiently. Back to the subject, besides the double entry, the next basic point is the transactions analysis, which is very significant to future professional, always be awareness of professional judgment and personal effectiveness. When we going to analyze one transaction, the first thing we should concentrate on is transaction whether cause stock to increase or decrease. Stock increasing consists of the purchase of additional goods and the return into the business goods previously sold. However, stock decreasing involves the sale of goods and goods bought by the business now being returned out to a supplier. When you handle one transaction the first step is going to prepare Journals, determine nature and double entry of each of the transactions. The second step is open up T-account and post entries as you go through the Journals. Once posting complete, “Close” accounts for the month. The third step is transferring all ledgers to trial balance. It required the total of all debit balances should equal the total of credit balances. I also learn how to prepare the statement of income, according to the format gross profit= sales – cost of sales, calculate the gross profit then plus other income and minus expenses calculate net profit or loss. The next stage is starting to prepare the balance sheet. The balance sheet comprises those accounts with balances that not included in the income statement. A properly drawn up balance sheet should have five categories of entries: Non-current assets, Current assets, Non-current liabilities and Capital. All above these skills support me to develop the technical and functional expertise gradually.
