Lidet Belay
Acct 520
Professor Keyser
August 26th, 2021
Week 1 Reflection
In today’s class, I learned a lot of interesting things I didn’t know much about. I learned
that banks do not keep all the deposits they receive from their customers in cash. They do not
want it to just sit there and not generate passive income. However, they do not invest in stocks
due to their need for liquidity. Therefore, they invest the deposits in marketable securities such as
Treasury bonds so that they could get their money quickly when there is a need for cash.
Furthermore, banks go through a form of inspection called Camel’s rating. This is basically a
form of inspection to see how effective the banks are in their operations. It is not disclosed to the
public and banks that get good ratings consistently get inspected once every 18 months.
I have one question. In what ways do the historical accounting facts that we learned
today apply in the real public accounting world of these times? Lastly, the discussion we had
about the definition of accounting and theory leads me to realize that accounting is
fundamentally based on judgment. No matter how other people like to make accounting seem
rigid and strict, it is a field that incorporates a lot of judgment from professionals in the field.
Therefore, it is of utmost importance to have sound judgment and remain unbiased. Personally,
today’s content will help me understand the need for unbiased judgment and the effects of
current events in my intended career path.