Financial Management

Accounting Principles

In this course, you will learn the most important and applicable concepts of Financial Accounting including the…

In this course, you will learn the most important and applicable concepts of Financial Accounting including the most essential financial statements.

About this course

Financial Accounting is often called the language of business; it is the language that managers use to communicate the firm’s financial and economic information to external parties such as shareholders and creditors. Whether you run your own business, work as a manager or are just starting your career, you want to understand financial information and be able to interact with accountants, controllers, and financial managers.

This course will provide you with the accounting language’s essentials. Upon completion, you should be able to read and interpret financial statements for business diagnosis and decision-making. More importantly, you will possess the conceptual base to keep learning more sophisticated accounting and finance on your own.

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What Will You Learn?

  • Understanding how company record and report financial information
  • Translating financial data into financial statements and reports
  • Turning financial reports into actionable data for decision making

Course Curriculum

1. Introduction
Welcome to Accounting Principles!

  • Introduction

2. Basic Principles

3. Accounting Equation
The basic accounting equation is the foundation of all accounting concepts. It represents the relationship between the assets (what a business owns), liabilities (what it owes to others), and owner’s equity (the difference between assets and liabilities). It is defined as: Assets = Liabilities + Owners’ Equity.

4. The Income Statement
The Income Statement, also referred to as Profit and Loss (P&L) Statement, is one of the three most important financial statements. The Income Statement shows managers and investors whether a company has made or lost money during a specific period of time.

5. The Balance Sheet
A Balance Sheet shows what the business is worth at a given point in time. The purpose of the balance sheet is to provide an idea of a company’s financial position. It does so by outlining the total assets that a company owns, the amounts that it owes to lenders (liabilities), as well as the amount of equity.

6. The Cash Flow Statement
The Cash Flow Statement, also called the Statement of Cash Flows, reports the cash generated and used in a specific time period. The term cash flow generally refers to a company’s ability to collect and maintain adequate amounts of cash to pay its upcoming bills.

7. Analyzing the Statements
You now know how to read the three most important financial statements. But in this chapter we will go one step further: we will learn to analyze and interpret these statements. This can be done with a trend analysis or a ratio analysis.

8. Conclusion
In this course, you learned the basics of Accounting, the “language of business”. You saw that accounting is the process of recording, classifying, and summarizing financial transactions to provide information that is useful in making business decisions. You also learned about the three main financial statements used in accounting. These are the balance sheet, income statement, and statement of cash flows. The balance sheet shows a company’s assets, liabilities, and equity at a specific point in time, while the income statement shows a company’s revenue and expenses over a period of time. The statement of cash flows shows how a company’s cash has changed over a period of time. We also discussed the accounting equation. It states that assets are equal to liabilities plus owners’ equity. In other words, assets are everything that a company owns, while liabilities are everything that a company owes. Owners’ equity is the residual value of a company’s assets after liabilities are paid. The equation can be represented as: Assets = Liabilities + Owners’ Equity In the last chapter of this course, you learned about financial analysis. Tools like trend analysis or ratio analysis can be used to analyze financial statements in order to make informed decisions. You are now ready to take the final test of this course and earn your certificate! Thank you for taking this course and good luck with the quiz!

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