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 #1
00:10:00
Liabilities
Assets and liabilities
Current versus non-current
Equity
Revenues
Expenses
Short Test#2
00:10:00
Assignment #1: Determining total assets and liabilities.
Assignment #2: Calculating net income.
Assignment #3: Building a balance sheet and income statement.
The accounting equation
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First accounting equation – Balance sheet
Problems
00:15:00
Second accounting equation – Income statement
Financial statements
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Primary Financial Statements
Balance sheet
Income statement
Cash flow statement
Financial statement notes
Accounting period
Summary and practice problems
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Module summary
Practice Problems
00:10:00
Accounting Fundamentals #1-org
About Lesson

Objective of accounting

To provide information about:

  • Financial position – what is owned and owed
  • Performance – what was earned and spent
  • To make decisions that impact the future of the business

Information must be USEFUL to users to make economic decisions

 

Question: What types of information do you think would be useful to other people in a company, outside of accounting department?

Answer: Typical items:

  • How much money the company has spent – to figure out if you are on budget
  • How many sales you have made – to figure out if you are on budget
  • -What profits are – to determine if the company is making money
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