"When you think about accountants, who would want to be an accountant? But, what would we do without accountants? Whether it's soldiers or garbage men or doctors, everyone has the thing that they love." -Fred Willard
If you asked a five-year-old what he wants to be when he grows up, he might say a firefighter, a police officer, a doctor, an astronaut, or a teacher. Careers that can make a difference in other people's lives influence the choice of young ones.
It would be extraordinary to hear youngsters say that they wanted to be an accountant when they grow up. You may think that accountants do not have glamorous jobs and that their work is accomplished behind the scenes. Nevertheless, accountants play a crucial role in our society.
So why study accounting? Accountants have exceptional numeracy skills and an analytical mind to make money last. The best in the field have even helped the wealthiest people in the world achieve even more wealth and prestige. Experienced accountants need to have an excellent knowledge of financial matters and know how to manage a company to survive. Do you need someone to explain how to handle your taxes and personal finances? Do you want to start your own company and not know how to start? Do you need someone to explain the latest accounting regulations to you? An accountant can do all this and more!
Why is accounting important? Accounting is a super crucial economic discipline. It is responsible for analyzing the economic operations of a person, a company, or an organization. Its main objective is to generate accurate financial information that contributes to better decision-making and the use of available financial resources. Accounting is based on standardized procedures depending on the country of origin.
Other essential functions that accounting performs are:
- Allows to record activities, resources, money, debt, and equity.
- Determines if there were losses or profits in a given period.
- Determines the financial situation of a business.
- Allows decision-making about the future of the company and future investments.
- Contributes to the development of strategies for cost reduction.
- Allows complying with tax obligations.
- Accounting enables us to be up to date with tax laws and regulations. It is in charge of informing the authorities about its situation, especially during auditories.
As you can see, accounting is undoubtedly one of the best tools to manage a business. But even if you do not want to pursue a career in accounting, having a basic knowledge of finance and accounting can help you open a small business or do your taxes during tax season.
Studying accounting basics can be done in many practical ways by attending workshops, attaining a university degree, using online tools, and reading many informative books. In this article, you will find excellent books to read and examine to acquire a piece of basic knowledge in accounting before taking an exam or gaining more knowledge about the general culture. Let's also discover some accounting basics here!
What are the Different Types of Accounting?
Before diving into a pile of recommendations of accounting books, it is essential to note that there are different types of accountants and many professional paths.
Some accountants have achieved their training by pursuing a Bachelor's degree in Accounting or related fields such as finance or business management and later twisting their career path into accounting. Other professionals had gone through several certifications in Canada like the Chartered Professional Accountant (known as CPA), the Advanced Certificate in Accounting and Finance (known as ACAF), or the Certified Professional Bookkeeper (CPB), for example.
Regardless of the previous level of training, here are the different types of accounting that are most common in Canada, which you will have to contemplate to specialize in a specific field of accounting:
- Audit: Every year, it is required by law for large companies to produce an annual report and statement of their accounts. Auditors are external accountants hired to check if the registered financial information is correct and business financial practices are aligned with the law. Auditors have a legal right to get their hands on everything concerning the financial status and company reports. If you want to become an auditor in Canada, you can choose from several accounting certifications to achieve your professional goals, for example, the Certified Internal Auditor (CIA). The CIA certification is the most highly regarded professional qualification for internal auditors offering global and local benefits to internal auditors in Canada. You will undoubtedly receive better job opportunities if you get a CIA certification!
- Financial accounting: This type of accounting involves recording, summarizing, and reporting all the transactions resulting from business operations over a specific time. These accountants keep track of a company's or businesses' financial transactions. They constantly know how much money is coming in and going out of the business.
- Management accounting: Management accounting helps managers to make financial and non-financial decisions. In Canada, for example, you can go for the Certified Management Accountant (CMA) certification. The CMA will help you specialize in accounting, management, strategy, and acquiring skills in cost management, strategic performance, risk management, and assurances.
- Tax Accounting: Tax accounting focuses on following the tax code and presenting a business's profit and loss to decrease its tax liability. This type of accounting is essential for any business because it helps it align with its tax laws and obligations. A tax accountant keeps the company out of trouble and on the right track of state laws.
- Forensic Accounting: These guys are pretty much financial Sherlock Holmes. Pretty interesting, right? Forensic accountants may be hired by lawyers or law firms to examine financial statements in large companies to prevent fraud. Employee fraud may happen because an employee is under financial pressure due to a divorce, gambling addiction, medical issues, among others. You'll love this job if you are interested in law!
All of the types mentioned above of accountancy make the accounting profession a super varied universe and way more interesting than most people thought. Do you want to know some resources that will help you introduce yourself and better understand accounting? Let's discover them together! Do you want to go further? Discover the best accounting online courses here!
The Best Books to Read To Understand Accounting
Each book is a new world to discover. So if you are interested in becoming more familiar with accounting, learning more about how to do your taxes, or preparing yourself to obtain any of the certifications above, you can consider reading these informative books to excel in accounting!
Here are some of the best books to read and study to learn more about accounting:
- Accounting Made Simple: this informative book is written by Mike Piper, author of several finance books, The Wall Street Journal, Money Magazine, AARP Magazine, Forbes, CBS News, and creator of the popular blog Oblivious Investor. The book explains the basics of accounting in under 100 pages. Piper straightforwardly explains everything instead of using terminology and language that most readers cannot understand. This book will find insights about accounting concepts, financial report analysis, and calculations to help any beginner in the field.
- Accounting All-in-One for Dummies: This book is written by Kenneth W. Boyd, a former CPA with a long experience in accounting, finance, and education. This book will help just about anyone understand the most complex topics. Instead of buying a pile of books, this one is perfect for explaining the basic concepts of accounting in just over 700 pages. Accounting All-in-One for Dummies is fantastic to understand accounting practices and terms such as debit and credit and even more complicated ones like amortization and regulation. The book also shows how to make intelligent business decisions using simple examples and everyday scenarios.
- Accounting for Non-accountants: Written by Wayne Label, an author, professor, and MBA and Ph.D. in Accounting, with public accounting and international CPA experience. This book is recommended to understand the basics if you are a non-accountant. Are you ready to understand the balance sheets, the income statements, the corporate taxes, and the cash flows analysis? This could be the perfect financial accounting guide for beginners! It's a must-have guide for you if you have never taken an accounting class. This book is highly recommended if you want to start a business, and you need an extensive A-Z dictionary of accounting terms.
- The Tax & Legal Playbook: This book was written by Mark Kohler, a best-selling author, national speaker, and radio show host. This book is an entertaining way that makes subjects as tax and legal questions more comprehensive for small business owners and in diverse stages of business. The author delivers advice and solutions for the readers to learn how to manage their time and money. It's a great option to learn the basics of cost accounting and prepare for tax planning and saving. The real-life examples included in this book help people to understand the concepts of accounting and taxes.
- Warren Buffett Accounting: Written by Stig Brodersen, a Danish investor, author, and owner of Stig Brodersen Holding company; and Preston Pysh, author in business, investing, and leadership, in this book, the authors explain that accounting is simply incomplete without investing. Investing your hard-earned money and savings may scare many people, but this book help investors think smart and make good decisions. Here you will find how to read an income statement, a balance sheet, and a cash flow statement, among others.
- Accounting Game - Basic Accounting Fresh from the Lemonade Stand: Book by Darrell Mullis, author and Director of Training and Development at Educational Discoveries; and Judith Orloff, education expert and founder of the Burlington College in Vermont, US and Educational Discoveries, Inc. This book is exceptional and exciting to read for those with no previous knowledge of accounting or finance. The concepts of accounting are so explained that even children could understand! Readers learn how to apply financial terms and concepts by using real-life examples. Never has learning accounting been so easy!
- The Bottom Line is Betrayal: Informative books about accounting concepts do not have to be tedious and painful to read. Written by L. Murphy Smith, Katherine T. Smith, and D. Larry Crumbley, this book talks about the continually changing world of business. Readers are introduced to contemporary auditing, marketing, and corporate espionage issues. The book is highly informative and an excellent replacement for a dull old textbook about accounting! This is a perfect example of a book combining education and entertainment to make learning about economics, accounting, and finance fun.
- Accounting for the Numberphobic: A Survival Guide for Small Business Owners: You must not be scared of numbers to survive the highly competitive marketplace if you are thinking about starting a business. However, if you have Math phobia, Accounting for the Numberphobic is here to save you! This book will discover how the income statement, the cash flow statement, and the balance sheet work to make better business decisions. Keep up with your company's finances entirely! Are you ready to achieve success?!
These books are an exceptional resource to begin introducing you to the world of accounting and some of the best resources in the industry to understand the fields of finance and business management as well.
We all learn things in different ways, and it is best to try some of these options to find the one that best suits your needs. After reading these books, you will understand how the accounting world works and be a good career path. Who knows, even your friends could pay you to do their taxes in the future! Check out more useful websites and online resources for accounting students and professionals.
Ready to have an introduction to Accounting Basics?
Are you ready to discover some of the most crucial accounting concepts? If you are already an accounting student, rest assured that you will already be a master in these concerning definitions, but in case you are not, here you will be able to refresh your memory!
- A balance sheet: This is one of the most important financial statements used to report the company's assets, liabilities, and equity. The balance sheet is beneficial since it evaluates a business's situation over a specific time.
- Cash: Cash is the most liquid asset in a company. Cash can also include currencies, checks that have not been yet cleared, and the amount of money in a current account.
- Accounts payable (AP): It is money owed by a company to its suppliers, and it's generally registered in the liability part of the balance sheet. When a company purchases goods on credit, they need to be paid back in a short period.
- Accounts receivable (AR): They refer to the money customers owe to a company due to the goods or services they have received but not paid for. Usually, when customers purchase products on credit, the amount of money owed is registered on the right side of the balance sheet.
- Certified public accountant: The accountants who have pursued a CPA certification in Canada ensure the correct examination of accounting records. The CPA certification confirms an accountant has enough and recognized skills in taxation, auditing, regulatory compliance, and financial analysis. By acquiring a CPA license, accountants can boost their career, job security, and earning potential.
- Assets: An asset is everything that contains an economic value or a future benefit for the company. Examples of assets are cash, investments, inventory, office equipment, machinery, and vehicles.
- Cash flow: The cash flow reflects the cash moving in and out of a company at a specific point in time, and it can be either positive or negative.
- Debits: A debit is an accounting entry that could increase assets or decrease liabilities in the balance sheet. For example, if a firm asks for a loan to purchase laptops, it would debit fixed assets and credit liability.
- Depreciation: This term refers to an accounting method used to register the cost of a tangible asset over its useful life. Depreciation represents how much an asset has been used.
- Equity: It represents the value that can be returned or not to a company's shareholders after the company pays off all the debts. It can also be defined as the owner's interest in the company assets.
Now that you've been able to refresh your memory with accounting basics let's do a little exercise! Find the correct answer to complete each of the sentences.
- Assets are basically __________ of the business.
e) None of the above.
- Debits are basically _____________.
a) Cash moving in and out.
b) Accounting entries.
e) None of the above.
- Accounts receivable refers to the _________________ customers own to a company due to the goods or services they have received but not paid for.
e) None of the above.
- The _________________ is a financial statement, used to report the company's assets, liabilities, and equity.
a) Excel sheet.
b) Matching principles.
d) Balance Sheet.
e) None of the above.
- The CPA certification confirms an accountant has enough and recognized skills in taxation, auditing, regulatory compliance, and financial analysis. By acquiring a CPA license, accountants can boost their career, job security, and earning potential.
d) None of the above.
Accounting in Canada - Regulations!
The world of accounting is far from being dull as previously thought; however, it is somewhat complex, and a lot of effort is required to get things done right. Especially in Canada. Did you know that accounting is a regulated career in Canadian territory? What does this mean?
A profession is regulated when it has a legal or regulatory requirement for a professional to register before practicing that profession. In Canada, accountancy is regulated by the provincial accounting bodies of Chartered Professional Accountants (CPA) and the Canadian Public Accountability Board (CPAB). These regulations are established to ensure that the accounting professional can bring efficient quality control to perform accounting tasks, such as audits, the management of financial statements, and sensitive and confidential information. The regulatory bodies are in charge of assessing the professional training to determine whether the accountants are suitably qualified to practice the profession. Learn more about the legal and regulatory environment here!
Perhaps being more informed about accounting books and financial reports can inspire you to undertake this profession and know everything that the accounting profession implies in Canadian territory. However, if you feel that this is too much information and need to go step by step, you can always ask for extra help!
What do you think about knowing everything that involves accounting in Canada from the hand of a private teacher? Find an accounting course here on Superprof!
Learn Accounting with Superprof!
Superprof is an excellent online platform where you can find a global community of private tutors, as well as all kinds of private tutoring! Learning Mandarin Chinese, Russian or German has never been easier than before! Are you looking for extra school support? Find your financial math tutor, organic chemistry tutor, or the best accounting tutor to achieve your academic and career goals.
Are you ready to let go of your curiosity and let your imagination flow? Do not be limited! Superprof opens the door to a world of knowledge always at your fingertips. Regardless of where you are in Canada, at Superprof, you will find more than 300 specialized accounting tutors who can help you become an expert with balance sheet analysis and financial statements, and more, much more! Looking for accounting tutorials in Toronto? in Calgary or Victoria?
Choose the best tutor closest to you with Superprof!
It's time to check your quiz answers! Let's hope you haven't cheated!
- Assets are basically possessions of the business.
- A debit is an accounting entry that could increase assets or decrease liabilities in the balance sheet.
- Accounts receivable ( or AR) refers to the money customers owe to a company due to the goods or services they have received but not yet paid for.
- The balance sheet is a financial statement used to report the company's assets, liabilities, and equity.
- The CPA certification indeed confirms an accountant has enough and recognized skills in taxation, auditing, regulatory compliance, and financial analysis. By acquiring a CPA license, accountants can boost their career, job security, and earning potential; it's a TRUE statement.
See you soon, outstanding accountant buddy!
Take accounting courses Toronto here on Superprof.
The platform that connects tutors and students