I have always had questions about languages generally. My inquisitive mind had constrained me into applying logic to new information and concepts, making new languages difficult for me to learn. I am not a linguistics expert, but some English language elements simply do not conform to logic. For instance, a ‘boxing ring’ is square in shape, not circular like a ring. I am repeatedly puzzled by irregular nouns; there is no reason for the plural of ‘child’ to be ‘children, or of ‘erratum’ to be ‘errata’. I usually do a double-take when I see oxymorons. ‘Clearly confused’, ‘all alone, and ‘original copies’ are combinations of words that have contradictory meanings.
However, these complexities and seeming inconsistencies are understandable if one shows interest. Synonyms highlight the diversity in human communication. Paradoxes, proverbs, and metaphors all add meaning to our expressions. Terminologies and technical terms have deep roots in the common language.
I remember in Biology class when the teacher said the topic of the day was, ‘Binomial Nomenclature’, which turned out to be a system of giving two names to organisms. Terminologies in medical school were equally confounding; cephalic (head), necrotic (dead), hypotension (low pressure), and hypertension (high pressure). These were all derived from simple terms in English Language or other languages.
Then came the corporate financial accounting class in business school. The faculty was quick to debunk the myth that accounting is all about numbers and money. It is the language of business, he said with some sense of pride. We discussed some basic terms required to understand the preparation of the main financial statements. Assets, Liabilities, and Owners’ Equity are the components of the statement of financial position (or balanced sheet). I would soon realize how right he was; the class brought back memories of my attempt to learn Mandarin on the app Duolingo.
Assets, he said are resources owned by a business and bear economic value. Since there are different ways of categorizing assets, we were encouraged, as astute LBS students to consider assets as either income-generating or non-income generating. Common accounts under assets are Cash and Cash equivalents, Receivables, Inventory, Property, Plant, and Equipment.
Liabilities refer to the obligations of the company. Again, the faculty quipped, LBS students like us should consider liabilities as either interest-bearing or non-interest-bearing. Some liability accounts are loans, overdrafts, suppliers’ credit, and advanced payment on a note.
Then we discussed Owners Equity, which is the piece of the pie left after all the liabilities have been deducted from the company’s assets. It is a measure of the net worth of the company.
We then concluded that the assets of a company are the sum of the liabilities and the owners’ equity; this is the fundamental accounting equation.
The introductory class went well and by the time some exercises followed, numbers began to have new meanings because I had been successfully conditioned to see the impact numbers have on businesses. It felt different from simple arithmetic. Who knew?