If you are thinking about a career in accounting, you may want to begin your studies with a bookkeeping course. According to the U.S. Bureau of Labor Statistics, close to 2 million people are currently employed as bookkeepers or accounting clerks, and the overall outlook calls for a 14 percent increase in this field between 2010 and 2020.
Learn the Basics of Bookkeeping
Bookkeeping courses teach the basic computations used by large and small companies. When you balance your personal checkbook or reconcile a savings account statement, you are actually performing a basic type of bookkeeping. Building on this foundation, online bookkeeping courses instruct students on the mechanics of applying debits and credits to an individual account. Expanding on this theory, bookkeeping courses also instruct students on how to aggregate multiple general ledger accounts to create financial statements.
Become Familiar With Bookkeeping Terminology
The accounting field uses its own financial vocabulary, which any bookkeeper must understand before entering the workforce. The terms debit and credit are familiar to most of us, but in a bookkeeping course, students will learn how debits and credits are input into a company's general ledger system. An overview of the financial statements prepared by accountants, namely the balance sheet, the income statement and the statement of cash flows, are also important to learn before pursuing a career in bookkeeping or accounting. The line items flowing into these financial statements such as cash, loans and income will also be introduced in an online bookkeeping course.
The Accounting Equation
Perhaps the most important piece of knowledge presented in a bookkeeping course is what's known as the accounting equation, or assets equals liabilities plus capital. This is the basis for the balance sheet, the financial statement which provides a picture of a company as of a point in time (typically month-end or year-end). On the balance sheet, assets are everything a company owns, and liabilities are considered to be outstanding debt or other financial obligations. The difference between these two accounts must equal capital, also referred to as equity or net worth. One important function of a bookkeeper is to total the underlying values of accounts feeding into the accounting equation. The financial statements produced by an accounting department help companies understand their ability to produce capital, or an excess of assets over liabilities, a key indicator of financial success and future growth potential.Photo Source: Flickr