The subject of Principles of Accounts (POA) is usually thought to revolve only around numbers. Thus, when a student is good at Math, he should also perform well in POA. However, this is an assumption is far from reality. Math is closely related to Physics hence those students who do well in Maths they will normally do well in Physics.
What then works for students interested in doing POA? Principles of Accounts will only require simple Mathematics, which includes addition, percentage, multiplication, division, subtraction, and simple Algebra.
However, with all its positive points, the one major issue in accounting is a poor public image. TV shows and movies often present accountants as fastidious individuals who are obsessed with numbers.
Most people choose not to follow a career in accounting as they’re concerned that the constancy of crunching numbers each day would wear them out. But, in reality, such myths regarding accounting are far removed from the truth.
What then is this subject about?
There is a lot more to accounting than crunching numbers. So, without much ado, let’s look at what really POA is all about.
The Essence of Principles of Accounts
Accounting isn’t just about dollars and cents or numbers. Rather, it’s the study of the principles that govern how we report about dollars and cents.
Students get to learn the rules that all the companies in the world (certainly with a few exceptions) use so that irrespective of where you are and the business you are in, there’s a common ground for meaningful comparison.
It’s for this reason the 12 (or 13 when the Duality concept is included) Accounting Concepts always are included in chapter one of your textbooks.
These Generally Accepted Principles of accounting (GAAP) form the foundation of why and how specific transactions are done the way they are. A good example is how the Prepayment and Accruals are treated.
It’s All About Common Sense
Do you share in some of the above sentiments as well? When so, what can you learn from principles of accounting? And what can you do to ensure that you excel in POA in your ‘O’ levels?
Other than building up your foundation in accounting, the other necessity is common sense. By going through the definitions of each of the 12 or 13 accounting principles. You will realize that they are bringing out the obvious.
For instance, the Objectivity Concept in POA states that there has to be proof that a given transaction occurred prior to it being recorded. The proof is what is used to validate the transaction.
Just like you wouldn’t make a payment simply because someone said they bought something without them showing some proof.
Besides common sense, by acquiring some general knowledge in accounting can make your studying of POA a lot easier. The ability to relate different scenarios together and know how they impact each other can help you be able to better analyze your numbers.
Though these are a few examples of accounting. The reality is, there are many fields that require accountants and each will require accountants in a different way.
So, never think that being an accountant only means you will be doing taxes all day. In addition, accounting is different. It’s a life skill; it can be used in budgeting for groceries, running a blog shop, understanding your bank and CPF statements.
Being able to read numbers and come to conclusion makes accounting a very valuable skill.
3 Ways To Apply Accounting
Accounting is a broad subject and it is not limited to businesses only. Here are other ways that accounting can be useful to you.
1. POA in Investment and Personal Finance
Accounting skills will become important when you are planning to achieve financial stability and grow your level of wealth.
Using these skills, you will be in a position to keep track of your net worth, prep budgets for holidays, manage the household expenses, start a successful home-based business as well as follow in making investments (a good example is in understanding company annual reports).
You can also use your accounting skills to evaluate the interest rates on car payments and house mortgages.
2. Taking it further
A degree course in accounting uses the same principles you will learn in GCE O and N’ levels Principles of Accounts. It’s also not an overstatement to say that you can be employed as a bookkeeper on completing O’/N’ level exams.
A degree in accounting, however, means that you’ll be able to get better jobs and added opportunities to grow your career compared to someone who’s in this field without one.
With the right training, you will find a good entry-level position and grow to higher positions in the future. Skilled accountants are valued in big organizations.
3. Talking Numbers
Apart from having more job opportunities, university students should not take accounting for this reason only. In addition, the job of an accountant can be rewarding financially.
Generally, the starting salary of an accounting graduate in Singapore averages S$2,600. for the good performers, they can expect to get an average increment of S$450 in their salary each year.
When you make partner in a large accounting company, you can expect to make a salary of somewhat less than S$1 million per year. Of course, this salary will change depending on the location, company, and industry.
Principles Of Accounts is misunderstood to revolve only around numbers. However, even though accounting has received poor publicity. The subject can offer you a lot more opportunities that go beyond the classroom setting.
Accounting is a life skill and can help you in understanding your bank /CPF statements, preparing household budgets, investing, growing your wealth levels and also achieve financial stability.
Are you taking POA as a private candidate? Here is an article to help you prep: