SUMMARY Many people misunderstand that to be an accountant means to be really good in mathematics.

Of course, one has to be good in basic math such as addition and subtraction but accounts is about recording, sumarising and intrepeting financial transaction in a business. Accounting information also reflects on how well a company is doing financially.

INTRODUCTION It is essential for everyone to have some knowledge about accounting in the business world. It is the language of business as the owner of the business might want to know how well their business is doing and where has the money that they have invested has gone to. How much money they have earned from the sales, the expenses incured and whether they have made profit or loss. It is also a tool for an accountant to communicate to either to the business owner and/or other various accounting user.

ACCOUNTING EQUATION These are the most basic way of presenting the accounting equation. Assets, liabilities and equity is the most fundamental words used in accounting.

Assets = Liabilities + Equity

Assets are valuable recourses that belongs to a business. It is divided into current assets (amount that will change within 1 year) and non current assets (last more than 1 year). Examples of current assets are cash, account receivable and bank. Examples of non current assets are building, office equipment and motor vehicles. Liabilities are amount owe to external parties. It is also divided into current liabilities and non current liabilities. Example of current liabilities are bank overdraft, fixed deposit and payables. Example of non current liabilities would be bank loan and mortgage.

Equity includes capital, drawings and profit or loss. Equity can be also be defined as the business owners transaction. The amount of money that the business owner contributes to the business is known as capital. When the business owner take out money from the company for personal, it is call drawing.

PROFIT DETERMINATION The equation below is to calculate profit

Profit = Revenue - Expenses

Revenue refers to the amount of money received by the company. Revenue includes sales, discount received and interest received. On the other hand, expenses are the money that the business spent in a company. Example expenses of the company are cost of goods, workers salaries and electric bill.

ACCOUNTING CYCLE The accounting cycle is a series of steps that the firm takes every accounting time period in order to take account of its financial transactions. 1. The Source Document in an Accounting Transaction A source document is the evidence that the transaction have occurred. It should be recorded in the appropriate books of prime entry. Examples are dishonoured cheques, invoices, memo, debit notes, and other business documents. 2.The 7 books of prime entries If any financial transaction occurs, they are recorded into one of the 7 books of prime entries. There are actually two entries to be made - one is at debit and the other one is at credit.

3. Posting to the 3 Ledgers There are 3 ledgers which contains the summarised accounting information which are posted from the 7 books of prime entries. There are 3 types of ledgers- The General Ledger, Sales Ledger and Purchases Ledger.

4. Prepare a Trial Balance Trial balance is the summary of totaling all the debits and credits from the ledgers and make sure they are balance for the accounting period. Therefore, trial balance help to check the accuracy of double entry system. 5. Adjustment Adjusting entries are made in accounting journals at the end of an accounting period. The purpose of adjusting entries is to adjust revenues and expenses in the accounting period in which they actually occurred. 7.Adjusted Trial Balance and Financial Statements The information from the accounting journal and the general ledger is used to develop the statement of comprehensive income, statement of retained earnings, statement of financial position, and statement of cash flows -- in that order. Information from the previous statement is used to develop the next statement. 8. Closing Entries Closing entries are journal entries made at the end of an accounting cycle to set the balance of temporary accounts to zero to begin the next accounting period. The accounts that are closed are revenue, expenses, and drawing accounts. The assets, liabilities, and owner's equity accounts are not closed because their ending balances will be brought forward as the beginning balances for the next accounting period.

USERS OF ACCOUNTING INFORMATION Accounting information is not only useful for the business but it is also needed to make important decisions. Below are the list of accounting users and why do they need them ; 1. Shareholders or investors of a company who provide the business capital require accounting information to evaluate how much they should invest and how much they are getting back based on the amount that has been invested. 2. Business manager not only need accounting information to make critical decision that will affect thousands of people but set higher goals for their companies and see if they meet their financial targets. 3. Suppliers and creditors such as banks need to determine whether the company are able to pay the loan borrowed plus the interest before it is due or not 4. Employees need accounting information and see the ability of a company to pay their wages 5. Government not only need accounting information for taxation purpose but to determine policies for managing the economy

TYPE OF BUSINESS IN MALAYSIA The types of business activities and the types of business entities are closely related. Whatever types of businesses operated, it is either owned by one business owner (sole proprietorship), partnership which is owned by two or more person or companies which are owned by shareholders.

FINANCIAL STATEMENT

Financial statement is a report which describe about the financial health of the company and also formal record of the financial activities of the company. This financial statement must be prepared according to the standard of accounting. Through this financial statement a person can know about the financial strength of a company. Mostly investors make use of this financial statement to assess the viability of investing in a company(business). Financial statement contains Statement of Comprehensive Income and also Statement of Financial Position of the company. Statement of Comprehensive Income will show the loss and profit of the company. Where else, Statement of Financial Position will show the net assets, liabilities and equity of the company. Those information assist users of financial statement to predict the entitys future financial strength.

CONCLUSION After spending days of researching, we as accounting students and future accountants realise that we do not need to worry about our future as every company need accountants to know their business performance and financial strength. Various sources such as books from TAR college library and internet had help us in understanding the business and accounting world better and have a clearer picture on what we are studying currently.