MBA REFLECTIONS: Ep. 9

Financial accounting is at the core of business operations; it is very integral to any structure. To ascertain the financial health of a business, the books have to be put right. It is crucial to note that the financial accounting a company undertakes is heavily dependent on how big or enormous its operations are. The more complex a business structure is, the more complex its financial records will be. For a small business, you would find a credit and debit sides and that could be all to its financial statement. However, for large corporations involved in a lot more than just day to day business, they have to account for every single detail because of a couple of reasons. Firstly, they are required by law to release their statements to the general public. Also, they are answerable to their boards and shareholders who want to know how revenue is generated, how much is being spent in expenses and how much of a profit the company is making. This guides their projections, informs their judgment and allows them make rational business decisions. For all these reasons and more, the statement of account of companies are heavily scrutinized and has to be prepared by the most competent officials to avoid any kinds of discrepancies.

To a layman, statements would just include the earnings and spending of a business. However, it is far more than that. Due to the fact that businesses operate on a complex structure, their financial standings are always indicative of a very complex spread too. You see things like deferred payments, fixed assets, etc. It will be too basic to give a carpet characterization to all as either earnings or spending. The context of what the funds are been used for is crucial. This is where scholarship comes in; to ascertain under what category a particular payment or deductions go under. Knowledge of this and how to effectively analyze it is just as important to a business as knowledge of the business itself.

Considering this has to do with a lot of numbers, it is very important to keep up so we are charged to remember even the littlest of details. This is where group efficiency pops in. In the beginning of the semester, we had been divided into groups to maximize our efficiency and to provide a platform where we can collaborate, develop relationships and generally aid our time here as students. So we meet regularly to either revise course work that had been done or prepare for classes by reading the course material prior to attending the class itself. Based on the diversity of these groups, we can easily point to areas where we are distinctively talented and help others who struggle in those areas. For financial accounting, we revise the course work, do practical works and try to keep up with the intricate details. This is very crucial to doing well in the course and also very important to been able to actively participate in class.

Thanks.