If accounting is clerical, finance is intellectual

Debit and credit are two commonly used, yet greatly misunderstood, accounting words, laments Anil Lamba in Romancing the Balance Sheet (www.landmarkonthenet.com). Stating that he has rarely come across anybody who can confidently attribute a meaning to each of these words, he informs that there is invariably a feeling that one is a gain, the other a loss; and that one is positive, and the other, negative.

The reason for this confusion, according to Lamba, is the fact that these two words, by themselves, have no meaning at all. He explains that these words are used, primarily, in the context of the system of accounting in use almost all over the world, called the double-entry system of book keeping, whereby each transaction has an effect on two account heads. “By themselves, these words represent neither good-bad, nor positive-negative. They simply represent two opposite impacts.”

To those non-accountants who still wonder what makes the number in an account-head go up or down, as a result of transactions, a simple answer given in the book can help – that a debit in a debit account serves as a plus and a debit in a credit account serves as a minus. “Similarly, a credit in a credit account has a positive effect, and a credit in a debit account has a negative effect.”

Lest you begin to fret about the woes of number-crunching, the author distinguishes between accounting and finance, in an intro chapter. If accounting is clerical, finance is intellectual, he clarifies. “Finance starts where accounting ends. You may be unable to understand accounting, but you could still understand finance…”

Reassuring study for non-accountants who have to manage accountants.

Coping with job loss

If you live spending all the money you get in the form of hefty paycheques, what will be your future when one fine day, the company decides that your services are not required any more? Posing this dreadful question, Sebin and Jobin S. Kottaram offer advice on how to face an unexpected job loss.

Being depressed and increasing your blood pressure and anxiety by wondering what to do after you have lost your job does not help, they write in I Can Win (Dolphin Books). Reminding that the first thing to do when income falls is to cut costs, the authors instruct that you begin by identifying the things where you are spending money unnecessarily. “For example, if you have more than one mobile connection, it is better to cut down to one. If you do not need Internet on a daily basis, disconnect the Internet. Limit unnecessary phone calls. Cut down on liquor, cigarettes, branded clothes, cosmetics, accessories, and perfumes. Do not go shopping to lighten your mood as you will end up buying a lot of unnecessary things.” Cautioning against shutting oneself up at home, the authors urge you to go for short walks, because an energetic body and mind will help prepare and work for a new job. “Apply for jobs that suit your taste via the Internet or magazines or newspapers. Attend interviews… Even if you end up losing out on a few interviews, do not lose hope and keep trying. You will be able to overcome the problem at hand. Remember that after the darkness of night, there is always the light of the day.”

Motivating material with many positive messages.

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