The Essence of Accounting Surrounding Us

     

            Accounting can be used in various ways, benefiting someones every day life. For example, a student could organize all of their scores, whether from tests, homework, or exams by compiling these scores into a spreadsheet. Looking at this data, the student is able to have a visual representation of what they need to work on in school. Such as if this student has lower numbers in the exam category, they would see how much they would need to study in order to bolster their scores.

            The main way accounting is used, however, is in finances. Colleges and universities, such as Michigan State, use accounting to estimate the costs of room and board, books, and meal plans. Kang, an expert on accounting and finances, exemplifies that using a spreadsheet to keep track of this data is an easy way to analyze it and figure out problematic areas. Accountants can be a good resource when looking for a new investment. They can advise their clients how much they should spend, and when they should spend it in order to not lose money. Whether we notice it or not, accounting is always around us, although very few of us know how to interpret this information to benefit us.
            

By Katie Howard

Citations:
Kang, Houn. "Accounting Skills You Can Apply to Everyday Life." Online Learning Tips, 9 Aug. 2013, onlinelearningtips.com/2013/08/accounting-skills-you-can-apply-to-everyday-life/. Date Accessed 29 Sep. 2017. 

Prompt #7: Contemplating Controversy: "EpiPen"

Contemplating Controversy: Mylan's "EpiPen"

An ongoing controversy that challenges a company’s ethics when it comes to how much a company should profit off a product people will buy regardless of price. Mylan is a pharmaceutical company that has been under scrutiny recently. This is due to their signature product "EpiPen" and their pricing strategies involved with this product.

Mylan acquired "EpiPens" in 2007 from a company called Merck. Sheldon Kaplan invented the first auto-injector filled with a nerve antidote in the mid- 1970s for the US military. Around that same time he also created an auto-injector for civilians to help with anaphylaxis. Anaphylaxis is a severe allergic reaction which causes a drop in blood pressure and airways to close. This can be mild or fatal. The EpiPen was finally approved by the Food and Drug Administration (FDA) in 1987. A pre-loaded adrenaline filled syringe was easy to use, and would deliver the life saving dose quickly and even through clothes. This was very practical for any consumer because the pen could be applied regardless of medical training. Through Mylan’s marketing strategies, the EpiPen brand became very well known to people with severe allergies just as we know “Kleenex” or “Band-Aids”.  The number of EpiPen users has grown 67% over the past seven years and the price has increased as well. (This is where the controversy comes in)

The Controversy.

CBS reported last January that the CEO of Mylan Heather Bresch was called to congress to explain why the EpiPen's price has soared over the past few years. In 2009, a EpiPen pack would cost the average consumer without any health insurance $103.50. In 2016, that same consumer would pay $608.61, and the price keeps going up. According to Time, the production of one EpiPen Pack costs a little under $20 per pen to produce and ship to customers. So why is there such a difference between the cost of production and the retail

price? That is what congress is currently trying to find out. All of this negative publicity toward Mylan has brought up an important question some companies have to face, how much should a company profit from goods consumers will buy regardless of the price. Mylan will continue raising the price because they are a publicly owned company and it is in the investor's best interest to keep profiting. Without "Price Ceilings" (maximum prices for a product allowed by the government) Mylan can continue to charge whatever they want to stay profitable. However, this does come with some negatives such as bad media coverage, boycotting of other products produced by Mylan, possible government intervention and many more. This seems like it is only getting more and more controversial, and only time will tell how this will be resolved.

-Written by Carson Breault

Accounting

What is accounting?

Accounting is a key function for many businesses. Accounting is based off of fundamental assumptions and principles. Understanding these principles makes understanding accounting a little easier. Accounting is the systematic and comprehensive recording of financial transactions pertaining to a business. It is also a way to summarize, analyze, and report transactions to oversight agencies, and tax collection entities, like the IRS.

Principles of Accounting:

• Revenue Principle- when a good or service is provided, revenue is earned. 
• Expense Principle- the expense the business acquires when the business uses a good or service.
• Matching Principle- is the act of matching related revenue and expenses together.
• Cost Principle- states that assets be recorded in cash amount. 
• Objectivity Principle- data accountants use should be objective, factual, and verifiable. 
• Continuity Assumption- the assumption the business will continue to function properly. 
• Unit of Measure Assumption- states that it is fine for U.S businesses to use U.S dollars in their accounting analysis.
• Separate Entity Assumption- states a business entity is different from the business owner. 

Who can do accounting?
Basic accounting handles things such as; expenses, assets, liabilities, income statements, balance sheets, and statements of cash flows can be handled by a bookkeeper. While the more advanced accounting covers accounting patterns, operations, foreign currency operations, lease contracts, and pension funds. Advanced accounting is typically handled by qualified accountants who possess either a Certified Public Accountant (CPA) in the U.S, Chartered Accountant (CA), or a Certified General Accountant (CGA).

In order to find the basics of Accounting I had to read multiple articles. At first I thought it was way too complicated to understand, yet it is very simply the analysis of numbers, the accountant just understands where these numbers are coming from and can interpret what they mean. I personally find it easier to read from an article, having the words in front of me. Furthermore, I would like to understand what an accountant can do with their major, and why people go to accountants rather than do the math themselves.

by Katie Howard

Citations: 

Accounting Basics

Venture Line

Dummies- Understanding the Basic Principles of Accounting