Monday, October 26, 2009

My View on My Accounting Career


I sent this article to a friend today in response to an email I got from her regarding her college accounting class. I typically copy my "reminiscing" emails to my daughter Becky so she can post them here on my blog for me. I tend to ramble as I write, so she "cleans them up for me" before publishing them for you to read. (Thanks, Becky!)
I was a bookkeeper all my life. Of course nowadays they call it accounting, but I still prefer the old terminology. You mentioned General Journals, which prompts me to review what you probably already know. Before all this computer bookkeeping, I learned from what they called "double entry bookkeeping". Basically we had a DISBURSEMENT JOURNAL , where you post all accounts payable stuff. Then we had A CASH RECEIPTS JOURNAL where we entered all cash received, then we had a GENERAL JOURNAL, where you make adjustments, as well as worksheets or spreadsheets of accruals, cost of goods sold schedule, and all sorts of period entries. Then of course all three or four sources were posted to the GENERAL LEDGER from which you transcribe the Balance Sheet and Profit and Loss Statement (P&L). It got to be fun when you went on a 13 four-week accounting period for the year and you had oodles of amortizations. Of course you have side schedules like machinery, property -- cars trucks, etc, and their depreciation schedules, etc, with CONTRA accounts and all the window dressing and fun stufff.
That Cost of Goods sold was always my headache . HAD SOME, GOT MORE, HAVE SOME LEFT, the rest THAT DISAPPEARED WAS COST OF GOODS SOLD. Since we were in manufacturing (meat packing) we had Materials & Supplies, Raw Material, Work In Progress, Finished Goods, and that was broken down, so we had Livestock, Beef, Pork, Smoked Meats, Sausage & Luncheon Meats, Lard, Inedible By-products, bone meal, and each of those had all those Work in Progress, Finished Goods etc. Then we added Cost Accounting. Whew, that was some fun too, with allocation of overhead, fixed expense, variable expense. We had to take into consideration the cost of Labor, Power, Refrigeration, etc etc, for each item.
You can imagine how much learning I had to do, for I did not take any schooling in accounting--only high school bookkeeping. I first had to learn the concept of DEBIT AND CREDIT, like Assets are something we own, good stuff, but then Liabilities were the stuff you OWED SOMEBODY ELSE. I wondered why OWNER EQUITY AND SURPLUS were liabilities. When the boss owned, why was it a LIABILITY?? Well, it all goes back to this: the set of books are like a slave and the balance sheet is a mirror or slate of what that slave owes back to the owner. The Balance Sheet is just a score sheet of what that slave owes back to the owner. I really enjoyed how it all fell into place. Especially when we got into that 13 four-week accounting periods per year, and all the accruals, and contra accounts, by department!
They used to say, Meat Packing or Manufacturing was like OIL--you start with a raw product and zooomm, it splits into all sorts of new products. You start with a cow or pig, then you have all sorts of things: inedible by products, finished goods, hams, bacon, lard, etc etc. I got a good education in accounting through the help from our auditors who taught me all this puzzle. I tell you, the fun part was ALLOCATION OF FIXED EXPENSE. Some you get by square feet of processing space, some you get by cubic feet of refrigeration, some you get by number of employee man hours. All more fun fun fun. I found it to be really all quite simple and it all makes common sense.
After I retired, I was bored. Actually I did not retire, (after 54 years in the same job). It was called "downsizing", meaning my job was turned over to a telephone line from a computer from our plant in "Great Bend Kansas to the corporate office in Cincinnati, Ohio. They told me I was eligble for "retraining" so the government sent me back to school to study accounting. Ha Ha! What a joke! But as I wrote in a previous post, at age 76 I went to college and made a 3.4 grade average on about five subjects that I took. I had not gone to college in my younger days. After WW 2 I enrolled in college on the GI Bill for service men to study agronomy (to study soils). But it was Oct 1945 so the school told me to come back in January, 1946 to enroll for the September, 1946 term. So I went back to working as a meat packing plant office clerk and stayed 54 years. No college! I went from file clerk to Controller and Corporate Secretary. I let the computers print our Balance Sheet and Profit and Loss Satements. I still audited them! You know computers: "garbage in, garbage out"!
That is another story. Ha ha. I enjoyed accounting. I found it to be nothing more than common sense. You own some, you get more, you pass some out (sell or use up) and you have some left (profit). To me it was that simple.

11 comments:

GrannyPam said...

I enjoyed reading this Ernie. Although I did take some college and other training, I learned a lot of what I did as I went along, too.

As fast as things change these day, everyone needs to be leaning every day, just like you did, and I'll bet, still do.

Jennifer said...

Hi, Ernie! I really enjoyed your post. I am an accountant too. I enjoyed hearing what it was like before computers. I think my master's degree is a big help, but I agree with you that it's really hard work, self-motivation, and ambition that will help one advance his/her career in the long run.

accounts payable clerk said...

Hi Ernie!! I read your entire post and too enjoyed. I learn many things that everyone have to make updated yourself with the changing of technology. Finally, I appreciate your post!!

Jamie Shellman said...

Whether we live in the computer or typewriter age, accounting helps us spend our money smartly and manage our income properly. We should reminisce how accountants used to do their job in the last decades because their values and ethics can still help the young breed of accountants in the present century.

Lilia Costales said...

I admire how you were able to survive different jobs and continue learning. What interests me the most is your bookkeeping job. You've used all the skills you learned back in high school and discovered your own bookkeeping ways. It is possible that there are already changes on how one can make the Balance Sheet through the use of computers. But what's important here is this: knowledge is a process you experience every day. And if you share it to others, someone will also learn from you. :-)

Parris Moretti said...

You have very fulfilling working years! I know it’s not easy to be a bookkeeper because it requires a lot of knowledge aside from the basics of accounting. Education matters and it knows no age. You are truly very inspiring, keep it up!

-Parris Moretti

Ivo Merlos said...

I’m impressed with everything you’ve been doing, and it seems like all of these are just a piece of cake to you. =) It only shows that your hard work has made you a certified bookkeeping expert. Your knowledge in the field deserves to be shared to other aspiring accountants. Have you tried teaching or at least, engaging in the academe?

Gemma Anderson said...

Nice to know that you are enjoying accounting so far. For this, you gave to inspiration to pursue accountant career. Thanks a lot!

Jeanie Yearsley said...

This goes to show how gifted our accountants, or as you prefer to call them, bookkeepers, are. You are one flexible lad, Ernie. I find it very impressive that you love your bookkeeping job so much. It’s not all the time that a person has so much passion for his/her field of work. Nice! Keep it up, Ernie. You’ll surely inspire a lot of people with your fervor.

Jeanie Yearsley

Parris Moretti said...

I have to agree with Jeanie. Well, you’re being considered as one of the most important persons in the business world, Ernie. If we didn’t have people like you, what will happen to our business? Tracking expenses, costs and other details--- it will really be difficult for us to manage all this! That’s why we are grateful that accountants like you are there, giving us businessmen the ever elusive peace of mind in the fast-paced world of business.

Winston Sutton said...

In the business world, accounting is utilized in greater depth. Each individual may encounter a few activities in his/her everyday life which requires knowing the basic accounting principles. Well, accounting is the most basic framework of business, without it, people would be unprepared for progress, especially businessmen.