Dump the Monetary Concept – Measure What Makes Life Worthwhile!

“Not everything that can be counted counts, and not everything that counts can be counted.” Albert Einstein, physicist (1879 – 1955)

The principle of monetary concept states that anything which cannot be measured in monetary
terms will not be considered as a part of the accounting data. While accounting captures the numerical performance of a business, many will agree that numbers tell only the part of a business’ story.

Work culture, morale and happiness of workers, teamwork and job satisfaction all play a part in make a business successful.

In this TED Talk, Chip Conley shares on Measuring What Makes Life Worthwhile, some of points Chip covered includes:

– 94% of the business owners believes that the intangible things are important ( things like intellectual property, corporate culture and brand loyalty).

– Only 5% of these leaders have a means to measure these intangibles in the business.

– An alternative definition of success introduced by the King of Bhutan: The Gross Happiness Index. (GHI)

– The science behind the art: the metrics of the GHI.

Enjoy!

[VIDEO LENGTH: 17:40 MINS]

About Chip Conley (from TED.com)

Chip Conley In 1987, at the age of 26 and seeking a little “joy of life,” Chip Conley founded Joie de Vivre Hospitality by transforming a small motel in San Francisco’s seedy Tenderloin district into the now-legendary Phoenix.

Today, Joie de Vivre operates nearly 40 unique hotels across California, each built on an innovative design formula that inspires guests to experience an “identity refreshment” during their visits.

During the dotcom bust in 2001, Conley found himself in the self-help section of the bookstore, where he became reacquainted with one of the most famous theories of human behavior — Maslow’s hierarchy of needs, which separates human desires into five ascending levels, from base needs such as eating to the highest goal of self-actualization, characterized by the full realization and achievement of one’s potential. Influenced by Maslow’s pyramid, Conley revamped his business model to focus on the intangible, higher needs of his company’s three main constituencies — employees, customers and investors. He credits this shift for helping Joie de Vivre triple its annual revenues between 2001 and 2008.

Conley has written three books, including his most recent, PEAK: How Great Companies Get Their Mojo from Maslow, and is at work on two new ones, Emotional Equations and PEAK Leadership. He consults widely on transformative enterprises, corporate social responsibility and creative business development. He traveled to Bhutan last year to study its Gross National Happiness index, the country’s unique method of measuring success and its citizens’ quality of life.

National Accounting Quiz 2010

Ngee Ann LogoThe National Accounting Quiz (NAQ) 2010 is the biggest annual accounting quiz organised in Singapore since 2004! NAQ 2010 promises to be a fun-filled event. Students will be immersed in a series of accounting-related activities to revise their accounting concepts and to stimulate their passion for accounting.

The event will take place on 21 July 2010, from 1.00pm to 5.00pm, at the Ngee Ann Polytechnic Convention Centre. Click on the button below for more information!

National Accounting Quiz 20102

Looking for Trainers and Facilitators!

Jump Grades Education rebels against boring, dry, sleep-inducing accounting coaching offering schools and private education institutions customised coaching/ tutoring services which clients say brings incredible, measurable results.

With an excellent background in training/coaching, the company brings talented and experienced teams of tutors, web technologists, useful publications and industry practitioners to help students learn accounting with amazingly clear understanding.

“Jump Grades” delivers its name and differentiates coaching businesses with clear positioning to stand apart from the crowd.

We are looking for folks who share the same passion to help students understand accounting the way we do. If you are an educator, private tutor, accounting-trained person with interest in teaching, (ex) school teachers, bookkeeper, freelancer, CPAs or business owners – we would like to hear from you!

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5 Reasons Why Principles of Accounts

this is the closest Creative Commons Licensed Picture I could find! You just finished your final year examinations and are considering your options. The familiar arts (history, literature or geography) and science  (biology, physics and chemistry)

Principles of Accounts (POA) sounds so foreign and you’ have heard from friends that it is boring. But there’s more to debits and credits in POA.

 

“’Double-entry bookkeeping’ is one of the great discoveries of European civilisation, but five centuries later most people are still muddled about assets and liabilities. Without such knowledge, technical terms like ‘balance-sheet recession’ and ‘rebuilding balance sheet’ are meaningless.” – Robert Skidelsky, member of British House of Lords and Professor Emeritus of political economy at Warwick University* 

Here’s 5 Reasons Why You Should Pick Up POA:

1. Importance of Accounting
2. Valuable Skill for Daily Life
3. Accounting as a Career
4. Dollars and Sense
5. Taking it further – Upward Mobility

1. Importance of Accounting

Accountants are responsible for providing information that is used to determine the present and future economic stability of the organisation. Bosses depend on them to make business more profitable, investors make decisions using accounting information, government tax on the profits and employees read them to find out if they get their bonuses.

2. Valuable Skill for Daily Life

While subjects like geography are interesting, there may be very little opportunities for you to be able to differentiate one rock from another. signContract

Accounting, however, is different. It is a lifeskill;

Whether in budgeting for the groceries, writing cheques, running a blogshop, understanding contracts or with knowing your bank /CPF statements, the ability to read numbers and make a story out of them makes accounting skills something very valuable.

Principles of Accounts in Personal Finance & Investment

Accounting skills becomes essential if you want to be on your way to a stable and growing level of wealth. You will be able track your net worth, manage household expenses, budget for holidays, set up a home-based business and follow on investments (e.g reading company annual reports).  Accounting can also be used to assess interest rates on house mortgages and car payments.

3. Accounting as a Career

Accounting is the language of business. Today, more CEOs are armed with accounting degrees than any other area of study.  Career opportunities associated with a degree in accounting are practically endless due to how broad the subject is.  Jobs where accounting skills are valued include:

Accountant
Actuaries
Auditors
Brokerage Clerks
Budget Analysts
Claims Adjusters, Appraisers, Examiners, and Investigators
Certified Public Accountants
Credit Analysis
Debt Counselors
Economists
Financial Analysts
Financial Managers
Financial Services Sales Agents
Insurance Sales Agents
Insurance / Reinsurance Underwriters
Loan Officers
Personal Financial Advisors
Securities and Commodities Sales Agents
Tax Inspectors, Collectors and Revenue Agents

The “Iron Rice Bowl”

Another reason college students should consider studying accounting is the condition of the economy.  Whether the economy grows or weakens, businesses always need for someone to calculate the profits or the losses. In economic downturns, businesses need to cut down on costs to make their business more profitable.  Businesses also need a strict set of internal controls to make their business more efficient.  The only way to ensure that both of these can happen is through stringent accounting.

4. Dollars and Sense

Job opportunities are not the only reason that university students should consider accounting.  The job can be financially rewarding.  The starting salary of a local accounting graduate averages S$2,600. Good performers can expect an average of S$450 increment in his salary every year.

A partner of a large accounting firm can expect to receive an annual salary of slightly less than S$1 million. This salary, of course, can change based on company, location and industry.

According to Ambition’s 2009 Market Trends and Salaries Report, the Heads of Accounting departments take home salaries in the range of $100,000 – $500,000, excluding performance bonuses, stock option and other allowances.

Accountant Salary Table

5. Taking it further – Upward Mobility

An accounting degree course uses the very same principles you learn in your GCE O/N’ levels POA. It is also not an exaggeration to say you can work as a bookkeeper after your O’/N’ level exams. An accounting degree, however, means you’ll have access to better jobs and more opportunities to advance your career than someone who’s trying to make it in the field without one. With proper training, you can find a worthy entry-level position and step up to greater positions in the future. A skilled accountant is valued in large organisations. Many influential individuals in large organisations are qualified accountants and contribute positively to their communities.

We love to hear from you!

Share your experience and thoughts with us!  Your sharing will allow readers to benefit.  Questions on accounting education? Contact me here. I do my best to help.

—–

*quoted from “The Price of Clarity,” published 24 May 2010 by The Straits Times, Singapore.

 

Read More:

7 Reasons For Becoming An Accountant And Not A Fashion Designer – by Herald de Paris et Cie

Image Credits

5 reasons why accountancy—1953

A Song About the Accounting Cycle

Accounting can be as fun as you make it to be. See how this girl make it happen!

[Clicking opens a new window]

image

LYRICS:
Transactions occur everyday in a business
The accounting cycle has begun
Gather your source documents and file them away

Record transactions in the general journal
Put debits first and indent the credits
Don’t forget an explanation or you’ll get confused

Once a month post the journal entries to the ledger
Just forward the balance if the page gets filled
Start a new page; show everyone you’re skilled

Do a trial balance of the ledger
And if it doesn’t balance you have made a mistake
But don’t be worried if you’ve mastered the error tests

The fiscal period is now at its end
The worksheet shows the columns to be done
Trial balance, adjustments, income and balance sheet

Net income or net loss? That’s the question
The income statement can give the answer
Revenues minus expenses is all it takes

Insurance, late invoices and supplies
All require adjusting entries
Record them on the worksheet then journalize

The nominal accounts need to be closed out
Revenue, expenses, income and drawings
Are the four closing entries

The last step is the post-closing trial balance
But if the debits don’t equal credits
Then it’s a good thing you have mastered the error tests

And if you didn’t, well…I feel bad for you

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The Accountant’s Story : Inside the Violent World of the Medellín Cartel

The Accountant's StoryCame across this audio book whilst in the National Library. Seems like a good read. Here’s what I read from the back of the CD cover:

Publisher’s Summary
“I have many scars. Some of them are physical, but many more are scars on my soul. A bomb sent to kill me while I was in a maximum security prison has made me blind, yet now I see the world more clearly than I have ever seen it before. I have lived an incredible adventure. I watched as my brother, Pablo Escobar, became the most successful criminal in history, but also a hero to many of the people of Colombia. My brother was loved and he was feared. Hundreds of thousands of people marched in his funeral procession, and certainly as many people celebrated his death.”
These are the words of Roberto Escobar-the top accountant for the notorious and deadly Medellín Cartel, and brother of Pablo Escobar, the most famous drug lord in history. At the height of his reign, Pablo’s multibillion-dollar operation smuggled tons of cocaine each week into countries all over the world. Roberto and his ten accountants kept track of all the money. Only Pablo and Roberto knew where it was stashed-and what it bought. 
And the amounts of money were simply staggering. According to Roberto, it cost $2,500 every month just to purchase the rubber bands needed to wrap the stacks of cash. The biggest problem was finding a place to store it: from secret compartments in walls and beneath swimming pools to banks and warehouses everywhere. There was so much money that Roberto would sometimes write off ten percent as “spoilage,” meaning either rats had chewed up the bills or dampness had ruined the cash. 
Roberto writes about the incredible violence of the cartel, but he also writes of the humanitarian side of his brother. Pablo built entire towns, gave away thousands of houses, paid people’s medical expenses, and built schools and hospitals. Yet he was responsible for the horrible deaths of thousands of people. 
In short, this is the story of a world of riches almost beyond mortal imagination, and in his own words, Roberto Escobar tells all: building a magnificent zoo at Pablo’s opulent home, the brothers’ many escapes into the jungles of Colombia, devising ingenious methods to smuggle tons of cocaine into the United States, bribing officials with literally millions of dollars-and building a personal army to protect the Escobar family against an array of enemies sworn to kill them. 
Few men in history have been more beloved-or despised-than Pablo Escobar. Now, for the first time, his story is told by the man who knew him best: his brother, Roberto. but also a hero to many of the people of Colombia. My brother was loved and he was feared. Hundreds of thousands of people marched in his funeral procession, and certainly as many people celebrated his death.”
These are the words of Roberto Escobar-the top accountant for the notorious and deadly Medellín Cartel, and brother of Pablo Escobar, the most famous drug lord in history. At the height of his reign, Pablo’s multibillion-dollar operation smuggled tons of cocaine each week into countries all over the world. Roberto and his ten accountants kept track of all the money. Only Pablo and Roberto knew where it was stashed-and what it bought. 
And the amounts of money were simply staggering. According to Roberto, it cost $2,500 every month just to purchase the rubber bands needed to wrap the stacks of cash. The biggest problem was finding a place to store it: from secret compartments in walls and beneath swimming pools to banks and warehouses everywhere. There was so much money that Roberto would sometimes write off ten percent as “spoilage,” meaning either rats had chewed up the bills or dampness had ruined the cash. 
Roberto writes about the incredible violence of the cartel, but he also writes of the humanitarian side of his brother. Pablo built entire towns, gave away thousands of houses, paid people’s medical expenses, and built schools and hospitals. Yet he was responsible for the horrible deaths of thousands of people. 
In short, this is the story of a world of riches almost beyond mortal imagination, and in his own words, Roberto Escobar tells all: building a magnificent zoo at Pablo’s opulent home, the brothers’ many escapes into the jungles of Colombia, devising ingenious methods to smuggle tons of cocaine into the United States, bribing officials with literally millions of dollars-and building a personal army to protect the Escobar family against an array of enemies sworn to kill them. 
Few men in history have been more beloved-or despised-than Pablo Escobar. Now, for the first time, his story is told by the man who knew him best: his brother, Roberto.

Explain the difference between gross profit and net proft

Profits going at the right direction

Gross Profit is calculated by deducting the cost of goods sold from the net sales figure. The calculation of the gross profit takes place in the trading account.

Net Profit – the excess of gross profit over expenditure. it is calculated in the profit and loss account by deducting all business expenditures from the gross profit.

What Is The Difference Between Accruals And Deferrals?

Accrual—accrual-basis recognition precedes (leads to) cash receipt/expenditure

Revenue—recognition of revenue earned, but not received

Expense—recognition of expense incurred, bill not paid

Deferral—cash receipt/expenditure precedes (leads to) accrual-basis recognition

Revenue—postponement of recognition of revenue; cash is received; but revenue is not earned

Expense—postponement of recognition of expense; cash is paid; but expense is not incurred

A deferral postpones recognition of revenue or expense by placing the amount in liability or asset accounts. Two methods are possible for deferring revenues and expenses depending on whether real or nominal accounts are originally used to record the cash transaction.

Revised ICPAS Code of Professional Conduct and Ethics

enron-code-of-ethics

The Irony of It All - Enron's* Code of Ethics

 

With effect from 1st August 2009, Singapore public accountants must adhere to an enhanced Code of Professional Conduct and Ethics. Following ICPAS Council’s approval on 19 May 2009 and in tandem with ACRA’s issuance of its enhanced code today for public accountants and effective from 1 August 2009, members of the Institute of Certified Public Accountants of Singapore (ICPAS) must adhere to a revised Code of Professional Conduct and Ethics (ICPAS Code). The ICPAS Code is modeled after the “Code of Ethics for Professional Accountants” published by the International Federation of Accountants (IFAC) in June 2005 (the IFAC Code) and is based on the ACRA Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities.

The updated code provides more guidance to accountants on how to apply the principles and independence rules. ACRA said it also “places an expectation on public accountants to pro-actively identify and eliminate potential threats to their independence”. 

The enhanced code requires accountants to document their decisions on independence issues to show they have complied with the professional independence requirement. Major differences of the current and revised code are noted in the ICPAS website. For example, under the current Code, it indicates that a covered party shall not accept gifts exceeding $200 annually from an audit client.

The revised Code uses a conceptual framework approach, discourages the acceptance of gifts or hospitality from the audit client. However, unlike the current Code, there is no mention of an acceptable amount for accepting gifts and hospitality.

The Singapore code went through a public consultation process in 2007-08. 

Sources:

Channel News Asia, Business Times and ICPAS.