Tutor profile: Catherine H.
Why is it important that I learn Algebra?
Algebra is applicable in so many real world situations. I will give a simple example here, and you will learn some accounting as we go as well. Sometimes you try to find missing information in your financials by finding out what you do have. Imagine that you are Nintendo and know you started the year with an inventory of 200,850 Wii U's, and ended the year with only 1,080 Wii U's. You also know that your machines made 980,572 Wii U's, because of the machine keeps count of how many it makes. Your task is to find out how many units were sold in the year. How would you do this? You can come up with a formula on your own: Beginning Inventory + new units made -Sales = Ending inventory So: 200,850 +980,572 -Sales = 1080 So, Sales is just like "x" in a basic algebra problem, so start solving it, By combining the two numbers that are already right next to each other, we get: 1,181,422 -sales = 1080 Then subtract 1181422 from each side and you get: -sales = -1,180,342 Multiply both sides by negative one, and you get that there were 1,180,342 units sold.
Why do I credit revenue if I'm making money? Shouldn't I debit it like I debit cash?
This is a difficult concept, and I want you to remember a few concepts that might at first seem unrelated as we go forward. First, the Accounting Equation is Assets = Liablity + Equity. Assets increase with debits, and Liabilities and Equity increase with credits. The accounting equation also means that whenever we make a journal entry, the effect on the accounting equation must be neutral. If you understand what is happening with cash in the question, it can sometimes be easier to move forward by process of elimination. If you know that you are receiving cash, and remember that cash is an asset, which means it increases with a debit, you know that you will be debiting cash. Then, you can piece together that you are crediting revenue like this: Cash 100 Revenue 100 But why is revenue really credited? It comes from understanding where revenue fits into the accounting equation. Retained Earnings is a major part of equity, and Retained earnings is all of the company's past year's revenues minus the expenses, minus dividends given out. So, as we discussed, the way to make Equity increase is with a credit, and we just learned that revenue increases equity, so it is a credit! Bonus knowledge, since expenses are what decreases Retained Earnings, this can help us remember that expenses are debits!
Should I take micro- or macro- economics?
Well, it depends on what you want out of the class. And honestly, there is significant overlap in most curriculums. Both will teach you the basics of supply and demand, and markets reaching equilibrium. If you want to know more about world economic interaction, historical and more recent, and the way laws effect larger economic structure, you should pick macroeconomics. If you want to know more about smaller scale decision making in personal businesses or one sector of business at a local or national level, you want microeconomics. Microeconomics is my personal favorite. Curriculums vary across universities, but I find that microeconomics focuses more on applying concepts, and less on memorizing facts.
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