A company’s financial position indicates the amount of resources that they have, and also the claims against those precious resources at any time. Claims can also be referred as equities. So, a company can be known as a combination of economic resources and equities. Economic Resource=Equities. No mater what type of business your in, every type of company has two different types of equities. They are creditor’s equity and owner’s equity. In another way Economic Resources= Creditors Equities +Owners Equity. When using accounting language, the economic resources a company has at a particular time is called their assets? On the other hand the amount of creditor’s equity a company has is known as their liabilities. So here is the standard equation of accounting or better known as the accounting equation: Assets=Liabilities + Owner’s Equity. Similar to an algebraic equation, both sides of the equation has to be equal. This equation comes in handy when analyzing the financial effects of your everyday business activities. Let’s talk about a very important concept of any business. Assets are known as the economic resources that a business has that are expected to generate money for them in the future. Some examples are real estate and any other property that a business own so that they can rent out to people. If a business is owed money than it goes into what is known as accounts receivable which are monetary items. However, there are some assets that are not physical. Some examples are copyrights, trademarks, and patents, but they are still extremely valuable to a business. Next, liabilities are the obligations that a business has such as paying cash, provide future services to individuals, or transferring assets to another entity. These are known as the debt of a business or the money that they have to owe in the near future. All of these are recorded in the accounts payable. As I’m sure you know, having a lot of debt is not fun and liabilities/debt are claims that are seen by the law. The law gives creditor (People that money is owed to) the right to push the sale of a company’s assets if they don’t pay their debt on time. Creditors have a ton of rights over owners and they have to be paid in full even before the owners receive anything. It is very possible for a debt to consume up all a company’s resources. Next, owner’s equity refers to the claim that owners of a business make in regards to the assets they have. It is the residual interest or the remaining assets of a company after deducting the amount of entity liabilities. Here is the equation for owner’s equity. Owner equity=Assets-Liabilities. The owner’s equity within a particular corporation is referred as stockholders equity, so the equation then looks like this. Assets=Liabilities +Stockholder’s Equity. The stockholders equity has two distinct parts which are the contributed capital and retained earnings. Stockholder’s Equity=Contributed Capital + Retained Earnings. The amount than an individual stockholder puts into a business is known as the contributed capital. Contributed capital is usually divided into two separate parts known as par value and “par value” and “additional paid in capital.” The retained earnings are the amount of equity that is earned by stockholders from the income generating activities of a business that are kept for future uses by a business. Retained earnings are affected by three types of transactions which are revenues, expenses, and dividends. The increase and decrease in a stock are known as revenues and expenses respectively and these come from operating a business whether online or offline. If you’re online than an operating expense that you will have if you have your own website is your domain name and hosting service. Another example is if a customer agrees to pay you in the near future for a service that the company will perform. The money is recorded in the accounts receivable (asset account) which increase the asset value but decrease the stock holder’s equity amount which is an example of revenue. However, if a company promises to provide a service in the future than this is known as an expense. When this happens the assets decrease (accounts receivable) and the liabilities (accounts payable) is increased, which makes pretty good sense right? When the revenues exceed the expenses this is known as the net income which is good, and on the other hand when expenses are greater than revenues than this is known as net loss which means that you’re losing business or your business costs more to operate than what you make. Dividends are the distribution of assets to stockholders which refer to the past earnings. Do not confuse expenses with dividends, because they both are reducing the retained earnings amount. Retained earnings are the collected net income or revenues minus expenses. The financial statements are the main way for communicating information about a business to those who have some type of interest in it. What helps me is to think of these statements as a type of model for business because they show how a business is doing in financial terms. However, like a variety of methods and models, financial statements are not perfect and have their flaws. There are four main financial statements, and they are income statement, the statement of retained earnings, the balance sheet, and the statement of cash flows. What the income statement does is summarize the revenues earned or the money made, and the expenses or the money that is deducted from a business. Many accountants consider it the most important financial report because it makes it clear whether a business has met its profitability goal. The next one is the statement of retained earnings, and it displays the retained earnings over a period of time. The time that the retained earnings will be zero is when a company first started out in their accounting period. A lot of companies use the statement of stockholder equity as a substitute of retained earnings. This is a more detailed statement because it displays not only the aspects of retained earnings but it also shows the changes in the stockholders equity accounts. Next, the financial situation of a business on a particular date, usually on the end of the month or the year is the balance sheet. The balance sheet displays the value of a business according to their assets and the claims against those assets which are the liabilities and the stockholders equity. Last, the statement of cash flows is geared towards a company’s liquidity measures. They are basically the flow and outflow of cash in a company. The net cash flow is the subtraction between the inflow and outflow of money. The statement of cash flows also display the money generated by simply operating a business, and it also displays the investing and financing transactions that occurs during a particular accounting period.

• A nice website dealing with the issues of ethics is http://www.ethics.org/.

It touches bases on questions that help determine if something is either right or wrong, and is based on moral decisions. Most people are faced with several ethical issues each day and, and some ethical activities could be on the range of illegal. If a business decides to use false or misleading advertising, or to bribe customers into giving them testimonials for a specific product, then they could be acting in an unethical manner. The ethics of a company could also be a result of the employees so that’s why it’s always a good idea to run a background check of who you are hiring, whether it’s online or offline. Professional ethics is the guidelines that apply to the conduct of individuals of a certain profession. Similar to the ethical actions of a company, the ethical actions of an individual is a decision. As being a member of an organization, accountants have to take the responsibility not only to their customers and employers, but also to the general public to act in the greatest ethical way possible. Accountants are very good at following professional ethics because they are the second professional group as having the largest ethical standards, with clergy being the highest, no surprises about that one. It is important for individuals who decide to become an accountant to have the highest levels of professionalism as possible. To enforce that its prestigious members are following the rules, the AICPA along with each state have adopted some codes of professional conduct that certified public accountants have to follow. Some simple rules are being responsible to the people that depend on the trust of accountants, such as creditors and investors. When working with people the accountant must act with integrity which means that they are honest, and the individuals gain from the visit with the accountant. The accountant must display objectivity which means that they are intellectually honest, and they must remain independent which means that they must avoid any relationship with the business or individual because it will damage the accountant’s principles.

ciphertext using some type of encryption key. An encryption key is the programmed formula that the person who receives the data uses to decrypt the ciphertext. There are a variety of encryption or algorithm methods. However, with an encryption key formula, you will be using more then one of these techniques. Some business use available software, while others develop their own. When an individual send information online such as through an email for example, they will never know who might intercept it, or to whom it could possibly be forwarded to. That’s why it’s not such a good idea to send confidential information online. However, an individual can help protect themselves by encrypting the information, or signing it digitally. Some very popular email encryption software is known as Pretty Good Piracy (PGP) and Centurion Soft Secure Protection. Pretty Good Piracy is known as freeware, which means that individuals can use it for their personal needs but not for commercial purposes. You can download this for no cost. A digital signature is a type of encrypted code that a individual, website, or company pastes to an electronic document to make sure that the individual is who they claim to be. The code will most likely consist of the user name and a hash of usually part of the message. A hash is a type of mathematical formula that generates content from a specific message, so it is different from a message. The recipient will have to generate a new hash from the received message and compares it from the one with the digital signature to make sure that they match appropriately. The main purpose behind using digital signatures is to make sure that it’s not a deceiver participating in the transaction. So, digital signatures help narrow down e-mail scams. A digital signature can also make sure that contents of a message have not been changed. A lot of web browsers use encryption that is regarded as 40 bit encryption, and this is a very low level. A variety of browsers also offer 128 bit encryption which has a higher level of protection because the encryption key is longer. Some important places that require extremely hire security like banks, and online retailers needs at least 128-bit encryption. A website that successfully uses encryption methods to secure information is known as a secure site. A secure site uses digital certificate with security protocol. The two most popular security protocols are secure sockets layer, and secure HTTP. A digital certificate is a notice that verifies that a user or a website is for real or not a scam. A lot of ecommerce websites will usually have digital certificates. A certificate authority (CA) is an authorized company or individual for that matter that has the ability to issue and verify digital certificates. There are several of websites that offer a digital certificate. Some popular ones are Verisign http://www.verisign.com/, Godaddy www.godaddy.com, Digicert http://www.digicert.com/, and Thawte http://www.thawte.com/.The digital certificate will usually contain information such as the username and the serial number of the certificate. By the way, the information in the digital certificate is also encrypted. Next, the Secure Sockets Layer (SSL) provides encryption of every detail that passes between a server and a client. SSL also requires the client to have a digital certificate, so the web browser can communicate securely with the client. The web pages that use SSL will usually begin with https as opposed to http. SSL is available in 40 and 128-bit encryption. Secured HTTP (S-HTTP) allows individuals to choose encryption for data that pass through a client and a server. When using S-HTTP, the client and the server must have a digital certificate. This makes S-HTTP more difficult to use then SSL, but on the other hand, it is more secured. Companies that have to use verify a client such as online banking companies use S-HTTP. Also, mobile users can also access computer networks through a virtual private network. When mobile users successfully logon to a main office using some type of standard Internet connection, a virtual private network (VPN) allows the mobile user to secure the connection. VPNs encrypt data as it passes from a notebook computer or any other mobile device so it won’t be intercepted. Regardless of your security method, I will highly recommend using the most powerfulness safeguard which is a backup. It prevents data loss from several of sources such as system failure for one. A backup is simply a backup of a file, program, or desk that can be used in place of the original if its loss, destroyed, or corrupted. If the files are destroyed, then you can replace them by restoring it, which copies the backed up files into their original position in the computer.