Course Content
What is accounting
“Accounting is the language of business.” - Warren Buffet “You have to know accounting. It’s the language of practical business life.” - Charles Munger
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What is accounting
Objective of accounting
Who are the users?
Useful information
Importance of accounting
Elements of the financial statements
We’ve gone over what accounting is, how it can be useful and why it is important. "Any questions before we move on to the technical fundamentals?"
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Elements of financial statements
Assets
Short test
00:05:00
Liabilities
Assets and liabilities
Current versus non-current
Equity
Revenues
Expenses
Accounting Fundamentals #1
About Lesson

REPORTING TO STAKEHOLDERS

  • Key communication method with variety of stakeholders to show what the entity has accomplished

DUE DILIGENCE

  • Allows stakeholders to analyze results and decisions made by management

FUTURE BUDGETING

  • Use past results to budget for future

QS: Why do you think accounting is important?

Three key reasons accounting is important:

  1. Reporting to stakeholders: people who are not involved in the day-to-day can see what has been accomplished
  2. Due diligence: stakeholders or potential stakeholders can analyse mgmt. and its decisions
  3. Budgeting: we’ll discuss in more detail, but key for future business planning
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