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How to Speak
Accounting
ou’ve heard the saying that nothing happens until someone
Ysells something. After that sale, accounting takes over as
the basic activity of business.
The Three Questions
Every business asks three key questions:
• How much money came in?
• Where did the money go?
• How much money is left?
The answer to each question e only from the prac-
tice known as accounting. Like other practices such as medi-
cine and law, accounting has its own vocabulary. In many ways,
accounting is the language of business.
Accounting can e plex. It has a high MEGO
factor. MEGO stands for that state of mental saturation when
“My Eyes Glaze Over” in stupefaction. An exasperated student
was once plaining, “Who ever thought addition
and subtraction could be this hard?”
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2 Accounting for Managers
In the Beginning
Accounting is one of our oldest earliest collections
of understandable writing track how many bushels of grain
came into the king’s warehouse. From the very beginning merce,
counting stuff made it started around 3500-3100 .
Those clay tablets also tell who brought in the grain and how much the
king collecting is an activity closely linked to ’ll
learn how crucial that can be to your business health in Chapter 9.
Whatever your responsibilities are in your business ani-
zation, you need accounting skills to perform at your best. If you
are in sales, you learn your product’s features and how to show
them to buyers. Those features include the cost or value propo-
sition and how it affects your customers’ buying decisions.
Marketing managers study how to find and appeal to a product’s
target groups. Working up price points can mean some detailed
cost analysis. Production managers learn how to plan workflow
to control costs. Senior managers use financial statements to
speak to those outside about their business’s prospects.
Whatever your man-
Visualize age