What is accounting? What is a balance sheet? What are the basic accounting things to know? Learn more ... http://AcademyOfKnowledge.org

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Accounting – Business for Engineers
Mohammad Tawfik
Business Management forBusiness Management for
EngineersEngineers
Accounting: A quick overviewAccounting: A quick overview
Mohammad Tawfik

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Accounting – Business for Engineers
Mohammad Tawfik
What is accounting?
●
Accounting or accountancy is the
measurement, processing, and communication
of financial information about economic entities
such as businesses and corporations.
(Wikipedia)

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Accounting – Business for Engineers
Mohammad Tawfik
In other words ...
●
Accounting is:
An information systeminformation system that records and
reflects information about operationsoperations of an
organization from a financialfinancial point of view.

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Accounting – Business for Engineers
Mohammad Tawfik
RecordingRecording
Basic block of all accounting

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Accounting – Business for Engineers
Mohammad Tawfik
Double Entry
●
Each operation has two sides.

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Accounting – Business for Engineers
Mohammad Tawfik
Journal Entry
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Debit and Credit

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Accounting – Business for Engineers
Mohammad Tawfik
T-Accounts
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Each party has a record

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Accounting – Business for Engineers
Mohammad Tawfik
Balance SheetBalance Sheet
A snap-shot fixed in time

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Accounting – Business for Engineers
Mohammad Tawfik
Balance Sheet
●
The fundamental equation:
Assets = Liabilities + Owner Equity

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Accounting – Business for Engineers
Mohammad Tawfik

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Accounting – Business for Engineers
Mohammad Tawfik
Liquidity
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How quickly can you transfer something into
cash

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Accounting – Business for Engineers
Mohammad Tawfik
Assets
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Current
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Fixed (Non-current)

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Accounting – Business for Engineers
Mohammad Tawfik
Liabilities
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Accounts payable
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Creditors

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Accounting – Business for Engineers
Mohammad Tawfik
Owner Equity
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Capital
●
Earned Profit (Sales - Expenses)

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Accounting – Business for Engineers
Mohammad Tawfik
Cash Flow StatementCash Flow Statement
How much cash!

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Accounting – Business for Engineers
Mohammad Tawfik
Cash Flow Statement
●
A series of pictures about the amount of cash
we have

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Accounting – Business for Engineers
Mohammad Tawfik

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Accounting – Business for Engineers
Mohammad Tawfik
Profit/Loss statementProfit/Loss statement
How are we doing?

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Accounting – Business for Engineers
Mohammad Tawfik
Profit/Loss Statement
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Simply: Gross Sales - Expenses

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Accounting – Business for Engineers
Mohammad Tawfik

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Accounting – Business for Engineers
Mohammad Tawfik
Financial RatiosFinancial Ratios
How to compare different business?

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Accounting – Business for Engineers
Mohammad Tawfik
Return on Investment
How good investing in this business is?

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Accounting – Business for Engineers
Mohammad Tawfik
Profit Ratio
●
Net Profit to cost ( <100%)

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Accounting – Business for Engineers
Mohammad Tawfik
Profit Markup
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Sales per cost

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Accounting – Business for Engineers
Mohammad Tawfik
Bibliography
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Accounting Principles For Engineers, by Charles Reitell;
Clarence Van Sickle
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What Every Engineer Should Know about Accounting
and Finance, by Jae K. Shim, Norman Henteleff
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Accounting: An Introduction, by McLaney and Atrill
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Financial Accounting: An International Introduction, by
David Alexander and Christopher Nobes
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Financial Accounting, by Weetman
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Financial and Management Accounting, by Weetman