By Kelly Damron, CPA, MBA
Assistant Professor, Colangelo College of Business
It is challenging being a professor of a class very few students want to take. Accounting is often intimidating to students because it involves math and unfamiliar terminology. Moreover, accounting can be boring.
To make matters worse, the concepts in accounting are backward from the banking terminology students are familiar with. The term debit, as we know it as consumers, is not technically correct according to the rules of accounting.
Accounting is the language of business and even though we may not realize it, we use accounting every day in our personal lives. Simply purchasing a cup of coffee at your favorite coffee shop involves accounting for both the consumer and the business. The customer exchanges money, via cash, debit or credit, in exchange for the desired beverage. The business receives the cash and provides the yummy drink to the customer.
While consumers may not record every purchase, a company records each transaction using double-entry accounting. Double-entry accounting requires at least two items to be recorded in the journal, such as cash and sales revenue.
One of the main challenges for students taking an accounting course is learning how to apply the concepts of debits and credits correctly. Prior to taking an accounting course, students think that they increase the balance in their bank account with a credit, but a credit actually decreases the value of their bank accounts.
The universal use of debit cards, which is actually a “credit” to the consumer bank account, has made the topic of accounting confusing for many students.
While some students may dread their first accounting course, the knowledge of basic accounting will help them better manage their personal finances. With some general knowledge of accounting, students can make good investment decisions, too.
And just as important, Grand Canyon University graduates with a good foundation in accounting may notice they receive more frequent promotions than their peers without similar skills.
The Colangelo College of Business challenges and inspires students to be servant leaders with the business skills and values necessary to drive organizational success and positively impact society. To learn more about business degrees at GCU, visit our website or use the Request More Information button at the top of the page.