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Business LibreTexts

8.1: Chapter Outline

  • Page ID
  • 1.1 Explain the Importance of Accounting and Distinguish between Financial and Managerial Accounting

    1.2 Identify Users of Accounting Information and How They Apply Information

    1.3 Describe Typical Accounting Activities and the Role Accountants Play in Identifying, Recording, and Reporting Financial Activities

    1.4 Explain Why Accounting Is Important to Business Stakeholders

    1.5 Describe the Varied Career Paths Open to Individuals with an Accounting Education

    Picture of a woman at a desk working on a computer and writing in a notebook.
    Figure 1.1 Careers and Accounting. Promotional opportunities throughout a person’s career may involve managerial responsibilities and often include responsibility for a portion of the organization’s financial performance. Having an understanding of how accounting affects businesses can help the individual to be successful in meeting the organization’s strategic and financial goals. (credit: modification of “Achievement” by unknown/Pixabay, CC0)

    Jennifer has been in the social work profession for over 25 years. After graduating college, she started working at an agency that provided services to homeless women and children. Part of her role was to work directly with the homeless women and children to help them acquire adequate shelter and other necessities. Jennifer currently serves as the director of an organization that provides mentoring services to local youth.

    Looking back on her career in the social work field, Jennifer indicates that there are two things that surprised her. The first thing that surprised her was that as a trained social worker she would ultimately become a director of a social work agency and would be required to make financial decisions about programs and how the money is spent. As a college student, she thought social workers would spend their entire careers providing direct support to their clients. The second thing that surprised her was how valuable it is for directors to have an understanding of accounting. She notes, “The best advice I received in college was when my advisor suggested I take an accounting course. As a social work student, I was reluctant to do so because I did not see the relevance. I didn’t realize so much of an administrator’s role involves dealing with financial issues. I’m thankful that I took the advice and studied accounting. For example, I was surprised that I would be expected to routinely present to the board our agency’s financial performance. The board includes several business professionals and leaders from other agencies. Knowing the accounting terms and having a good understanding of the information contained in the financial reports gives me a lot of confidence when answering their questions. In addition, understanding what influences the financial performance of our agency better prepares me to plan for the future.”