Introduction
The importance of accounting
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1. The Accounting Equation
Clay tokens, sheep, and Italy
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The basic equation
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Expanded accounting equation: SCF
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Expanded accounting equation: IS
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2. Assets
Assets: Planes, trains, and automobiles
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Definition of an asset
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Types of assets: Current
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Types of assets: Long term
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3. Liabilities
Obligations to suppliers, employees, governments, and customers
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Definition of a liability
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Types of liabilities: Current
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Types of liabilities: Long term
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Contingent liabilities
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4. Owner's Equity
Owner's equity: Paid-in capital and retained earnings
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Definition of equity
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Book value vs. net worth
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Other components of owner's equity
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5. Financial Statements: Balance Sheet
Financial statements: Balance sheet for Walmart
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Where financial statements come from
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The Microsoft balance sheet
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Notes from Microsoft on the balance sheet
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Limitations of the balance sheet
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6. Financial Statements: Income Statement
Differences between the balance sheet and the income statement
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Income statement
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Components of the income statement
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Revenues, expenses, gains, and losses
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Earnings per share
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The Walmart income statement
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7. Financial Statements: Statement of Cash Flows
Cash cows
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Statement of cash flows
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Statement of cash flows: Examples
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8. How Financial Statements Are Made
The importance of routine bookkeeping
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Impact of events on assets and liabilities, part 1
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Impact of events on assets and liabilities, part 2
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Impact of events on assets and liabilities, part 3
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Impact of events on revenues and expenses, part 1
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Impact of events on revenues and expenses, part 2
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Impact of events on revenues and expenses, part 3
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Impact of events on revenues and expenses, part 4
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9. Debits and Credits
The accuracy of debits and credits in the days of real books
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Debits and credits
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Journal entries, part 1
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Journal entries, part 2
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Journal entries, part 3
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T-accounts and posting
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Trial balance: The raw material for financial statements
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10. Accrual Accounting
The market value of accounting adjustments
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Net income vs. cash flow
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Four general types of adjustments
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Adjusting journal entries, part 1
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Adjusting journal entries, part 2
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Adjusting journal entries, part 3
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Adjusting journal entries, part 4
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Closing revenue, expense, and dividend accounts
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Making the financial statements
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Glossary_Financial_Accounting_Part_1.zip
(100 KB)