Accounting

College and School of Arts and Sciences
Science::Physics

Physics is the hard physical science of studying the world around us. It does not, however, study the soft sciences like Psychology. But psychologists do use physics to measure brainwave patterns to study a person's psychological make up. In fact, all the devices use by all sciences were invented through the study of physics, including computers.

Measurements are highly important in physics. Actually, everything in the world around us can be measured. Let's thank mathematics for providing us the numbers 1, 2, 3, etc. for our measurements. Thanks Math!

Now, think of yourself as a scientist. Name the unit of measurement(s) you are going to use for the following.
1. How tall you are.
2. Your weight.
3. The time between now and yesterday.
4. The amount of electricity your computer is going to use.
5. The amount of energy you will consume while doing 10 minutes of calisthenics.

Physics Reference:
http://www.sparkpeople.com/resource/calories_burned.asp?exercise=62

Art::Accounting

All business organizations employ accountants or bookkeepers to manage their money. Accounting transactions for small businesses are managed by the owner or a small team. Large corporations, however, will have different departments to handle their business transactions. For example, some accounting clerks will work in the Accounts Receivable department and some in the Accounts Payable department. But all follow the same accounting equation to balance their accounts.

The accounting equation is ASSET = LIABILITY + EQUITY.

Assets are the organization's property that is used for business. Examples are Cash and Equipment. Liabilities are debts owed by the organization, including deferred debts. Examples are Accounts Payable and Income Tax. Equities are the organization owners' properties.

Each business event that changes the accounting equation is called a business transaction. For example, the following business transactions show the changes occurring in the accounting equation.

Transaction 1: John opens a tutoring business and invest $1,000 into it. The accounting equation becomes:

ASSET	=	LIABILITY	+	EQUITY

CASH	=	LIABILITY	+	JOHN, CAPITAL
1000	=	0	+	1000

Transaction 2: John buys a notebook for $200 to use for his tutoring business by creating an account with a vendor. The accounting equation becomes:

ASSET	=	LIABILITY	+	EQUITY

CASH +	EQUIPMENT	=	ACCOUNTS PAYABLE	+	JOHN, CAPITAL
1000	0	=	0		1000
	200	=	200
1000	200	=	200	+	1000

Transaction 3: John earns $100 in his tutoring business. The accounting equation becomes:

ASSET	=	LIABILITY	+	EQUITY

CASH +	EQUIPMENT	=	ACCOUNTS PAYABLE	+	JOHN, CAPITAL +	REVENUE
1000	200	=	200		1000
100		=				100
1100	200	=	200	+	1000	100

Now, take a look at the following transactions and see how it changes the accounting equation.
1. John created a company and invested $5,000 in it.
2. John bought a building for $100,000 for the company to use by borrowing the money from a bank.
3. John sold the still unused building for $200,000 and paid the bank the full amount including a 10% interest.

Keep your books straight!

John Sindayen

Accounting Reference:
http://www.bizmove.com/buying/m5j.htm