hey this is Alex form Aplos software today we're gonna take a basic look at
accounting what it is when do you use it and why you should even care if you're
new to accounting this is the course for you what is accounting accounting is
keeping track of your stuff and can be boiled down into five primary areas the
first are the things that you own second the money that you owe then you have the
money that you receive the money that you spend and all of that boils down
into your overall worth you actually use accounting on a daily basis and might
not even recognize it you've got money in your bank account and then you get
your paycheck which gives you more money you pay your bills you've got debt and
all of that wraps up and your overall worth welcome to accounting so keeping
track of those five primary things requires us to have a system in place
and that's where accounts come into play so what are accounts accounts are names
and numbers that you create to track those five primary things in an
accounting system those five things have different names the things that you own
are called assets the money you owe is called liability the money you receive
this income the money you spend is expenses and all of that wraps up again
into your overall worth which is known as equity so when do you use accounts
and accounting accounts are created and used in an accounting system but
accounting is actually something you use on a daily basis let's take a look at an
example let's say you currently have ten thousand dollars in your checking
account this is money that you have you own it it's yours
therefore it's an asset let's also say that you have a job one that pays you
$1,000 per month this $1,000 is money that you have made and it's going to be
added to your checking balance therefore its income so with the $10,000 that you
had before plus the thousand dollars you just made your new balance of your asset
is $11,000 so let's face it everybody spends money with this new thousand
dollars that you've earned let's say you pay some bills buy some toys buy a piece
of pizza with the total cost of eight hundred dollars this is going to come
out of the money that you have therefore it's an expense so you started with ten
thousand you are a thousand dollars worth of income you
spent $800 in expenses you're now left with a new asset balance of ten thousand
two hundred dollars let's take a look at how liabilities and equity come into
play as well you have ten thousand two hundred dollars which is your asset
let's also say that you have some school loans and those are worth $5,000 this is
money that you owe somebody else therefore it's a liability
so the ten thousand two hundred that you have in your pocket minus the $5,000
that you owe equals five thousand two hundred dollars which is your overall
worth otherwise known as your equity so why do you use accounts in accounting
well in addition to tracking the five things we've covered today it also helps
you identify other things that are important for your business or
organization those things can include developing a budget identifying spending
or income trends generating reports maintaining transparency but most of all
feeling confident moving forward making decisions for your organization so today
we've gone over the real basics of accounting in the next couple of courses
we're gonna be taking a look at the other areas that make up a nonprofit
accounting system an accounting system is an environment that you create to
keep track of all the financial information in your organization for a
nonprofit this has seven key elements that we're gonna cover in the next
couple of courses the first is fund accounting nonprofits and churches need
fund accounting there is no question about it in this lesson and throughout
the others we're gonna be taking a look at what fund accounting is and how you
can implement it for your organization after that we're gonna take a look at
accounts in this lesson we're gonna take a look at what accounts are how you set
them up and what structure makes sense for your nonprofit and then we're gonna
move to transactions in that lesson we're gonna take a look at all types of
transactions learn how to use accounts properly and take a look at what other
details you might want to report for your nonprofit
after transactions we're gonna take a look at reporting without a strong
reporting system you won't be able to provide any accurate details about your
organization then we're gonna take a look at internal controls
setting up an effective accounting system is one thing but it's ultimately
worthless unless you can protect it by learning about what eternal controls are
you will begin to understand how you can protect your organization from financial
crisis and establish a standard of transparency and accountability for your
nonprofit next we'll take a look at the accounting rules accounting systems all
play by the same rules choosing a software or designing an
accounting system that has these rules in place is extremely
work lastly we're going to take a look at accounting standards in this lesson
we're going to learn about the history of accounting what the guiding standards
are and how you can make sure that your organization is up to par until then
keep it simple it's a good closing line until next time calculator until then I
will see you on the Internet until next time come on baby light my fire that one
doesn't work select my fire light my fire light my fire until next time it
will be this time the tomorrow of today is - today of tomorrow until next time