2013-08-09

Philosophy of Accounting

None of the stuff below coheres with what the Wiki says, however - perhaps the difference between UK and US systems is at play here.

I was confused by Owners' Equity, and got a cross-referenced tutorial from two independent sources.
So it turns out...

- You list all your individual investor accounts in the General Ledger
- You list the sum of these in the Balance Sheet under Owners' Equity
- But there's no official place to show the workings/map of individual owners' equity to the sum of their equity

Somehow, I feel that this system is missing a step.
Someone suggested that there are auditors who are part of the system that keeps this stuff square.
But the documentation should speak for itself, so from the Knowledge Management point of view... I declare traditional accounting processes to be... FLAWED DAMNIT.
You want to keep the Balance Sheet clean, so you don't include subtotals for Owners' Equity, Inventory, etc. - ergo separate non-standard notes sheets for all of those calculations... I get it... non-standard across different companies. WHICH IS A FLAW. It must be a ploy to save the jobs of accountants.

Separation between management and financial accounting. It's bullshit. No wonder accountants are so dodgy about what it is they actually do. They're so redundant.
Separation of FA and MA just makes it harder to illustrate to employees what shareholders want. They should unify.

Sorry. xNTP in the house.
There should be a single system. Maybe I have to go to business school to do a thesis to fix this.
So free ah? Diu lah. I go play DoTA.

Accounting & Phenomenology - same old shit, just a different day 'assets' are the noumena, and 'how they are notated' is the phenomena.

2013-08-05

Sensitivity

Seems I spend 75% of my energy on +ing or -ing my empathy with other people; and the other 25% on getting things done. Seems efficient.

Taking Account

Time to study double-entry bookeeping. Ah, back to 1999!

"algorithm for a full set of accounting reports" - here
record the transactions in the appropriate journals
post the journals to the general ledger
prepare a trial balance
review balances and adjust trial balance as necessary
prepare profit and loss statement and manufacturing statement
close profit and loss accounts to income summary
close income summary to retained earnings
prepare balance sheet
prepare statement of changes in financial position
prepare statement of retained earnings
"debit versus credit" - Wikipedia
In summary: an increase (+) to an asset account is a debit. An increase (+) to a liability account is a credit. Conversely, a decrease (−) to an asset account is a credit. A decrease (−) to a liability account is a debit.

Assets = Liabilities + Equity (A = L + E)

Assets + "Expenses or Losses"
= Liabilities + Equity + "Income or Revenue" (A + Ex = L + E + I)
(extended)
"elements of accounting" - Wikipedia
Assets, Liabilities, Equity, Income and Expenses.
Difference between ledger and journal - Accounting For Management
The journal is the book of chronological record; the ledger is the book for the analytical record.
Aspects of transactions - Wikipedia

(So because some times you are updating two accounts whose Elements are on opposite sides of the Accounting Equation, you have to either credit both, or debit both, instead of crediting one account and debiting the other.
DebitCredit
AssetIncreaseDecrease
LiabilityDecreaseIncrease
Income/RevenueDecreaseIncrease
ExpenseIncreaseDecrease
Equity/CapitalDecreaseIncrease
Real, Personal, and Nominal accounts - Wikipedia

TypeRepresentExamples
RealPhysically tangible things in the real world and certain intangible things not having any physical existenceTangibles - Plant and Machinery, Furniture and Fixtures, Computers and Information Processing Equipment etc. Intangibles -GoodwillPatents and Copyrights
PersonalBusiness and Legal EntitiesIndividuals, Partnership Firms, Corporate entities, Non-Profit Organizations, any local or statutory bodies including governments at country, state or local levels
NominalTemporary Income and Expenditure Accounts for recognition of the implications of the financial transactions during each fiscal year till finalisation of accounts at the endSales, Purchases, Electricity Charges



Algorithms under study (includes mistakes):
GENERAL LEDGER

"buying stuff from supplier; payment directly from owner"

(1 - REAL accounts)

(1.1 - we got the stuff, and now owe some money)
"stuff (assets)" - debit this account
"accounts payable (current liabilities)" - debit this account

(1.2 - we partially paid what was owed)
"accounts payable (current liabilities)" - debit this account
"owners equity (capital)" - credit this account

(2 - PERSONAL accounts)

(2.1 - we got the stuff, and now owe some money)
"supplier (creditor)" - debit this account

(2.2 - we partially paid what was owed)
"supplier (creditor)" - credit this account
"owner (who paid)" - debit this account
"The pedagogy of accounting should involve an indisputable, machine-checkable, algorithm... there should be less guess-work involve. This is just like how they mis-teach math. " - random thought

Now my general ledger has a separation between all the Real+Nominal accounts, and the Personal accounts (which document some of the same transactions, just on a different index).

Dealing With Boredom

Be more promiscuous, she said. Being promiscuous has paupered me many times over - and that's not even getting into the domain of sex.

Improving Composition in Speech and Writing

[In response to questions about interview technique - expressing technically complex ideas, beating around the bush, speaking more concretely versus abstractly, etc.]

Another speaker was correct to highly "show more, tell less," and this is true in both speech and writing. Choosing what words go into a sentence, affects both the written (e.g. essay) and spoken (e.g. interview) components of a candidate's application. Malaysian students typically need a lot of practice in composition. If you find that you are concerned about how you are choosing which words go into a sentence:

Number 1. Please get a writing coach.

Number 2. Practice the hell out of it. You need to get a journal, or blog, or equivalent, and practice as often as you can. You need to get into the habit of writing, then revisiting what you have written at a later point in time, daily, weekly, whatever. In this sort of training, they say you have to "murder your darlings," you need to write a draft, delete it, rewrite, delete, write, delete, write delete... until it's perfect.

Number 3. If you're not sure how useful a word is: draw a long line, label it "very concrete," on one end, and "very abstract," on the other, then ask yourself where that word falls on the line. If it's anywhere near "very abstract," throw the word away. If you do this more, you'll find that you end up chucking out a lot of adjectives and adverbs, and keeping a lot of nouns and verbs.

It takes some practice, but you will get better at this "composition," thing.

Economics of the Admissions Essay

This is a slightly cynical / sociopathic / Machiavellian / business-oriented view.

The admissions officer (or "reader") is your client; they are your potential customer; there is a transaction at stake; you are making the opening offer; you are trying to persuade them to accept with an acceptance letter i.e. "counter-offer."

This is a sales problem; you need to know what your customer really wants; "uniqueness," "self actualization," "analytical approach," "depth of reflection," "honesty" - these are not ultimately what the reader is looking for; the reader is looking to build a team of 400-4000 people who will learn well together; this team, or class, is the short term goal; there is another long-term goal... the team needs to look good to people outside the college for the next 50 years or so. The reader is trying to maximize value for these two short/long term goals; so in your essay (and in all other parts of the application, or pitch), you must show how you are helping your customer, the reader, to achieve those goals.

Key message: (your application is an "opening bid") how are you offering to add value, to the college (short term value), and to the world beyond college (long term value)? SHORT: a team that learns well together: functional is more important than unique; more important than either is the willingness to communicate. LONG: students and alumni that look good to outsiders... must be making a positive difference (or adding value) to some one else's life... single-moms /hedge fund managers / Malaysian farmers / artists and art dealers / etc.

You can write about anything, as long as you tie it back to one of these goals. The form and style of the essay can be any, as long as you succeed in communicating that you are ready, able, and willing to achieve both these goals, for the admissions officer.

2013-08-04

Boredom

Love. Food. Culture. Friendship. Why do I always end up with slacker jobs that give me time to think about what I find unimportant?

The perspective that I have cultivated is risky. If I ever grow old, and this is a perspective I never regret, my current self would be somewhat surprised by my future self.

College Applications and the Long Tail

["Initimidated that they have nothing to show to readers of their college application."]

Yeah, I got that sort of feedback from at least one participant at today's [USAPPS] college workshop/fair/tour.

While it's important to demonstrate what the ideal candidate looks like based on academics, past achievements, "passion", etc. (which should be easy for many facilitators who have gone that route)... the needs of the many outweigh the needs of the few. :p

It's a fact that if you score all Cs throughout school, there's still a college that will admit you. Students who have been consistent C/D/E etc. scorers, without organisational achievement, clearly developed passions, or other "marks" of "outstanding/admirable" history, need to be shown how to best position themselves to the admissions offices, in order to get this college thing "done." In fact they're the ones who benefit most from workshops like USAPPS.

I'm sure this is already being addressed, but the focus-groups tomorrow may provide additional leeway for this sort of tutorial. I hope at least some [people] agree with this.

Ps- still sorry for sleeping through the teachers session. Ugh.