Accounting, Cost and Management Accounting
- Dec 21, 2014
- 2 min read
Very often individuals often, ask this question, why study this subject, they are very difficult.
Firstly we as individuals (if we think logically) are learning nothing new, except that we are re-enforcing our inborn skills, which we acquired naturally. We know that if we receive or inherent something, we must learn to use it and be accountable for it.
For example your parent gave a monthly allowance of $300. You as a student must think, (plan) how you must spend each day, or how much you put aside, if you plan to buy your friend a birthday present. THIS IN SIMPLE TERMS IS KNOW AS BUDGETING (a term very commonly used in cost and management accounting). i.e. PLANNING FOR THE FUTURE.
Source: zeroinfy.com
Secondly, assume that your monthly allowance of $300 was insufficient, your parent asked you to justify why they increase your allowance. In order to do so, you to write up a little statement, which show how much you received (revenue) and how you spent (expenses) the net will be loss (deficit) that is that you incurred some expenses but you have not paid. This shows your parent that the allowance is not enough. What you have done is prepared a very common statement in accounting known as INCOME STATEMENT.
Those of you who doubt the simplicity of this basic concept, please verify with your mother how much quantity of rice , sugar and other household items she has and when will she buy and in what quantity. This indicates that she is an accountant in her household items.
The little problem of Debits and Credits can be easily solved by getting to know the concept of receiving and giving. What receive is debited and what you give is credited. Let us say that your mum bought bag very expansive rice for $25. What did she RECEIVE, rice, debit rice account, what did she GIVE cash of $25, credit cash.
Finally, Accounting have very little to do Mathematics (which is very complex). All we need to know is, Add, Minus, Divide and Multiply.
Such is a simple story of very difficult subjects such as cost and management and Accounting.
Kashmir Singh Senior Lecturer School of Business and Law TMC Academy
Great insights on the role of accounting and management in business growth. Tools like Amazon FBA automation also show how managing costs and efficiency can create more streamlined operations.
This post breaks things down in a way that’s easy to follow—budgeting and income statements suddenly make much more sense when you link them to real-life examples. It’s kind of like how best customised lapel pins tell a story or represent a group—they might look small, but there’s meaning and planning behind them too. Simple steps, clear purpose, and a personal touch go a long way. Thanks for sharing such a relatable explanation!
This is such a clear and relatable explanation of accounting concepts thank you for breaking it down so simply! It actually reminds me of how useful wiki page creation can be for topics like this. Creating a well-structured wiki page based on your examples (like budgeting, income statements, and debits/credits) would be a great way to help more students and beginners access this knowledge in an easy-to-understand format.
WD sore ini thanks to kabar4d!
Insurance topics always get me thinking about tax status. Factual resident details are so important!