NBE Arts: Accounting, Business Mathematics, and Computer Applications

Accounting

Foundations

Accounting equation: Assets = Liabilities + Equity. Double-entry bookkeeping records at least two entries per transaction. Debits are on the left, credits on the right. Debits increase assets, expenses, and owner's draws; credits increase liabilities, equity, and revenue. The normal balance of an account is the side that increases it. The bookkeeping cycle runs: transaction → journal → ledger → trial balance → adjusting entries → financial statements → closing entries.

Statements

• Income statement - revenues minus expenses equals net income, covering a period.
• Balance sheet - assets, liabilities, and equity at a point in time.
• Statement of cash flows - operating, investing, and financing activities.

Also know accrual versus cash basis, straight-line depreciation ((cost − salvage) ÷ useful life), FIFO versus LIFO inventory effects, bank reconciliation, and internal controls such as segregation of duties. Preneed and merchandise trusts require separate accounting and reporting.

Traps

• Confusing the balance sheet (point in time) with the income statement (period).
• Believing "debit" always means increase.
• Recording an owner's draw as an expense; it is a reduction of equity.
• Forgetting depreciation is a noncash expense that reduces net income without reducing cash.
• Missing that FIFO raises ending inventory and net income when prices are rising.

Worked example

Purchase $500 of supplies on account: debit Supplies $500; credit Accounts Payable $500. Assets and liabilities each increase; the equation stays balanced.

Business Mathematics

Core tools

Percentages and base-amount identification; ratios and proportions; trade discounts versus cash discounts; markup versus margin; simple and compound interest; present value; proration; straight-line depreciation; payroll; break-even analysis; metric conversion; and rounding conventions.

Formulas worth memorizing

• Margin = (Price − Cost) ÷ Price
• Markup on cost = (Price − Cost) ÷ Cost
• Price = Cost ÷ (1 − margin)
• Price = Cost × (1 + markup)
• Simple interest = Principal × Rate × Time (time in years)
• Break-even units = Fixed costs ÷ (Price − Variable cost per unit)

Traps

• Markup vs. margin: the dollar amounts match; the denominators do not.
• Failing to state percent of what - of cost, of price, or of list.
• Applying a cash discount to the selling price when the question specifies list price.
• Using months in an interest formula that requires years.
• Rounding at each step instead of at the end.

Worked examples

1. A casket costs $1,200; the firm wants a 40% margin. Price = $1,200 ÷ 0.60 = $2,000 (markup on cost = 66.7%).
2. Terms of 2/10, net 30 on a $5,000 invoice: paying within 10 days earns $5,000 × 0.02 = $100 off, so $4,900 is due. Waiting past day 10 forfeits the $100.

Computer Applications

Fundamentals

Distinguish hardware from software, and RAM (working memory, volatile) from storage (persistent). Know operating-system functions, file management (names, extensions, folders, search), and backup practice - the 3-2-1 rule: three copies, two media, one offsite. Understand networks, cloud services, and how data flows between a funeral home's management system, its accounting software, and its trust reporting.

Applications

Word processing: styles, templates, mail merge for family and clergy correspondence, track changes, document comparison. Spreadsheets: formulas, functions, relative versus absolute references, sorting and filtering, charts, and what-if analysis. Databases: fields, records, tables, primary keys, and queries. Funeral-specific software covers case management, preneed tracking, digital death certificates, e-signature capture, and payment processing.

Security and privacy

Strong passwords with multi-factor authentication; recognizing phishing; ransomware prevention via patching and backups; encryption of sensitive records; least-privilege access; safe disposal of equipment; and compliance with privacy laws governing personal and health information.

Traps

• Relative vs. absolute reference. A1 shifts when copied; $A$1 does not. A$1 locks the row; $A1 locks the column.
• Confusing RAM with disk space when a program is slow.
• Believing a backup exists because a file was saved.
• Assuming deleting a file removes it from the drive.
• Confusing a spreadsheet with a database; databases are structured for querying records.

Rule of thumb

The dollar sign locks: $A$1 locks both column and row, A$1 locks the row only, $A1 locks the column only.