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Updated in [May 25th, 2023]

This free accounting tutorial provides an introduction to financial accounting. Learners will gain an understanding of the income statement and balance sheet formats, as well as the words used in financial statements such as accounts receivable, prepayments, etc. They will learn how to record transactions on the financial statement, such as invoicing, raising equity, and buying inventory. Additionally, learners will be able to make a straightforward income statement and balance sheet, as well as outline the cash flow statement's format. Finally, learners will gain an understanding of the difference between profit and cash.

[Applications]
After completing this course, participants should be able to apply their knowledge to create financial statements, record transactions, and understand the differences between profit and cash. They should also be able to explain the income statement and balance sheet formats, define the words used in financial statements, and outline the cash flow statement's format. Additionally, they should be able to make a straightforward income statement and balance sheet.

[Career Paths]
1. Accountant: Accountants are responsible for preparing and analyzing financial statements, ensuring accuracy and compliance with applicable laws and regulations. They also provide advice on tax planning and budgeting. As the economy continues to grow, the demand for accountants is expected to increase.

2. Financial Analyst: Financial analysts provide advice and guidance to businesses and individuals on investments, financial planning, and budgeting. They analyze financial data to identify trends and make recommendations on how to maximize profits and minimize risks. With the increasing complexity of the global economy, the demand for financial analysts is expected to grow.

3. Financial Manager: Financial managers are responsible for managing the financial resources of an organization. They develop and implement strategies to maximize profits and minimize risks. They also oversee the preparation of financial statements and ensure compliance with applicable laws and regulations. As the economy continues to grow, the demand for financial managers is expected to increase.

4. Tax Accountant: Tax accountants are responsible for preparing and filing tax returns for individuals and businesses. They also provide advice on tax planning and compliance with applicable laws and regulations. With the increasing complexity of the tax code, the demand for tax accountants is expected to grow.

[Education Paths]
1. Bachelor of Accounting: This degree program provides students with a comprehensive understanding of accounting principles and practices. Students learn how to analyze financial statements, prepare financial reports, and use accounting software. Additionally, they gain an understanding of taxation, auditing, and financial management. This degree is becoming increasingly popular as businesses become more reliant on accurate financial data.

2. Master of Science in Accounting: This degree program provides students with an advanced understanding of accounting principles and practices. Students learn how to analyze complex financial statements, prepare detailed financial reports, and use sophisticated accounting software. Additionally, they gain an understanding of taxation, auditing, and financial management. This degree is becoming increasingly popular as businesses become more reliant on accurate financial data.

3. Master of Business Administration (MBA) with a Concentration in Accounting: This degree program provides students with a comprehensive understanding of business principles and practices. Students learn how to analyze financial statements, prepare financial reports, and use accounting software. Additionally, they gain an understanding of taxation, auditing, and financial management. This degree is becoming increasingly popular as businesses become more reliant on accurate financial data.

4. Certified Public Accountant (CPA): This certification program provides students with a comprehensive understanding of accounting principles and practices. Students learn how to analyze financial statements, prepare financial reports, and use accounting software. Additionally, they gain an understanding of taxation, auditing, and financial management. This certification is becoming increasingly popular as businesses become more reliant on accurate financial data.

Course Syllabus

Introduction

Downloadable Files

Session Objectives

The Three Key Financial Statements

The Balance Sheet: Assets

The Balance Sheet: Liabilities

The Balance Sheet: Shareholders' Equity

Balancing The Balance Sheet

Recording Transactions

Issuing Shares For 100 in Cash

Taking Out a Four Year Bank Loan

Buying a Property For 80

Buying Inventory For 60

Selling All Inventory For 90

Paying Salaries of 20

Paying Interest of 3

Current Assets Quiz

Defining Accounts Receivable and Payable

Buying and Selling on Credit

Valdero Inc. Exercise

Balance Sheet Quiz

Session Objectives

Role of the Income Statement

Income Statement: Gross Profit

Income Statement: Operating Income

Income Statement: Net Income

Creating a Full Income Statement

Recording Income and Expenses

Prepayments

Recording Expenses Part 2

Accrued Expenses

Finance Term Quiz

Luton Inc. Exercise

Depreciation

The Impact of Depreciation

Jenga Inc. Exercise

Quiz

Session Objectives

Downloadable Files

Three Key Financial Statements Review

The Role of Cash Flow Statement

The Cash Flow Statement: Operating Cash Flows

The Cash Flow Statement: Investing Cash Flows

The Cash Flow Statement: Financing Cash Flows

Profit vs. Cash Flow

The Idea of Matching Over Time

Matching Over Time Solution

PP&E Depreciation Recap

Depreciation and the Three Financial Statements

Different Types of Depreciation Methods

Calculating Operating Cash Flows - Direct Method

The Indirect Method

Operating Cash Flows - Indirect Method

Operating Cash Flows Example Period 1

Period 1 Solution

Operating Cash Flows Example Period 2

Period 2 Solution

Operating Cash Flows Example Period 3

Period 3 Solution

Operating Cash Flows Quiz

Johannes Operating Cash Flow Exercise

Deriving the Complete Cash Flow Statement

Stage One - Compare the Balance Sheets

Comparing Assets and Liabilities

Stage Two - Classifying the Cash Flows

Classifying Working Capital Cash Flows

Dealing With Property, Plant and Equipment (PP&E)

Calculating Net Capital Expenditures (Capex)

Net Capital Expenditure Quiz

Dealing With Retained Earnings

Preparing a Cash Flow Statement Exercise