The word ‘accounting’ creates a huge buzz in the mind of students. They find it confusing and boring, but accounting is one of the most important subjects for business management students. The students do not develop an interest in accounting because they found it one of the complex subjects.
Apart from that, most of the students also think that it is an irrelevant subject for them. They always have a question in their mind: why is accounting important? Because they don’t know that accounting is playing a crucial role in the student’s life. Accounting is not just important for business studies students, but it also helps the other field students.
Many reasons are showcasing Why accounting is important for students. But before we know the importance of accounting, let’s include the basic knowledge-What is accounting and its types?
Accounting includes the systematic and complete record of the financial transactions of a company.
According to Smith and Ashburne,“Accounting is the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions, and events, which are, in part at least, of a financial character and interpreting the result thereof.”
Types of accounting-
There are two types of accounting-
- Financial accounting
The preparation of reliable financial statements is a part of financial accounting. Financial accounting aims to calculate a company’s performance as precisely as possible. Although financial statements are meant for use by outside parties, they can also be used by internal management to help in decision-making.
- Management accounting
Management accounting gathers data, which is then analyzed by financial accounting. It refers to the method of compiling information on a company’s activities. The management committee uses the reports, and it helps them make operational decisions.
Now we will discuss why is accounting important for students-
Accounting keeps you organized.
We know that the students and the keep organized with the help of math. But you should know that math is not enough to keep you organized with your money. There are still some limitations to math that can’t be enough to organize the financial resources. Accounting helps you to track how much money you have earned. A large number of students earn money while they learn in universities or colleges. Thus it becomes crucial for the students to know how much money they have earned during their graduation or post-graduation.
It is quite often that the students forget about their expenses. Apart from that, without accounting, it is hard for the students to know that they have saved money or need to pay overheads. It also helps the students to keep track of the debts that they have borrowed from someone. With the help of proper accounting, the students can save lots of money during their academics sessions.
Helps to get the study loan
A large number of students borrow study loans for their higher education. Without proper accounting, it is quite hard for the students to get the loan for the banks. The students need to show the accountability to pay the loan amount on the given due date. With the help of accounting, the students get more chances to prove them accountable for the loan.
It helps the students show the bank their income sources and their capability to pay the loan on time. If the students cannot provide accurate details about their family’s income sources, they cannot get the loan on time. Apart from that, it also helps the students compare the loans, the loan interest, time duration, and many more. Thus the students can apply for the best loan for the studies.
It guides decision-making
Decision making is a crucial part of the student’s life. It becomes more crucial when it comes to financial decisions for the students. With proper accounting, the students can decide whether they need new gadgets for their education or can do the same work like the old one. It helps the students keep track of how much they are spending on what thing. Apart from that, it helps the students to avoid overspending on unnecessary items or services.
It also helps them to avoid underspending. Yes, underspending is the scenario when the students are just focused on saving rather than investing. Investment is one of the crucial things for students. They should invest their money for their future needs. Besides, it also helps the students to avoid plateauing. The study needs are frequently changing; thus, the students should know what they need. Accounting helps them to make the right decisions for their study expenses.
The measure of new strategies
You may think that why are we mentioning the measure of new strategies? We have mentioned earlier that most of the students earn while they learn. And some of the students also depend on their income for the additional study expenses.
Therefore they need to create the best strategy for the expenses to avoid the overheads and debts. Sometimes the student needs to spend more money as compared with the money they are earning. That is the reason the students need to build a new strategy for the study expenses.
In most of the cases, the students borrow money from the lenders to fulfill their expenses. Accounting helps them to measure that risk analysis factor about lending money. Because there is always a risk factor for the students that either return the money on time or not. Effective accounting helps them to measure that the new strategy will work from them or not. It also helps you compare the different strategies to pick the best one for your business.
Help you to overcome financial trouble.
We have mentioned earlier that study expenses are not limited to the college fee, university fee, or school fee. It is far more than the fixed fees. There are lots of study expenses that the students need to do in their academics sessions. All these expenses create financial trouble for the students.
Because most of the students spend their money without any accounting calculations, thus they get out of money when they need to spend extra for their studies. Accounting helps the students to calculate how much money they need to save for the uncertain study expenses and how they can generate money for those kinds of expenses. In this way, accounting helps the students to overcome their financial trouble.
Career prospects of accounting-
Many students think, why is accounting important? As per the career prospects, accounting is important for students. The role of an accountant is to report and interpret financial records responsibly. Small enterprises hire one accountant, but the large companies establish a complete accounting department.
The accounting profession’s broad range can vary broadly and may include various roles from tax planning to audit accounting. Students who want to become accountants must get certified from the CPA (certified public accountant). The four well-known companies with an entire accounting department are KPMG, PwC, Deloitte, and Ernst & Young.
Engaging point: Interesting facts about accounting
Do you think accounting is boring? If yes, then you are wrong. Here you will come to know about the lesser-known facts about accounting-
1 You know bubblegum was invented by Walter Diemar in 1928, who was also an accountant. The color of bubble gum is dark pink because, at that time the only dye he had.
2 Luca Pacioli, an Italian mathematician, is called the father of accounting. He wrote the book on the double-entry system for the first time in 1494. The surprising part is that Leonardo da Vinci was one of his students.
3 You must hear about the famous award, Oscars. Since 1935, every year, an accountants team spent around 1700 hours before Oscar night to count the academy award ballots by hand.
There are lots of points that can showcase why accounting is important. But these are the major points that are showing why accounting is important for students. If the students start to implement accounting earlier in their academic sessions. Then they have saved a huge amount of money from the academics expenses.
Apart from that, it also helps the students to become self-reliant as soon as possible. Most of the students are not well aware of the basis of accounting. But don’t worry, we are here to offer you the best assignment in accounting with accounts assignment help. It helps you to clear all your accounting concepts easily. Now it might be clear for you that why accounting is important for the students.
Bookkeeping and accounting both are important for business purposes. Bookkeeping is responsible for tracking financial transactions, while accounting is responsible for classifying, analyzing, and interpreting financial data.
It records only monetary items.
There is no system of tracking events that may occur in the future.
You can not calculate the exact cost of a product.
There is always room for fraud and errors.
The information of accounting can not be used as the only test of managerial performance.
An accountant has so many responsibilities they have to perform. For example, prepare a budget, financial model, calculate the cost, etc.