Author: Robert Holt PhD, CPA

Abstract: This course covers financial accounting basics in great detail from the development of the balance sheet and income statement to cash flow analysis and financial statement analysis.

Audience: Undergraduate business students and high school students

Chapter 1 defines accounting and the accounting model. Also, the balance sheet, the trial balance and journal entries are reviewed.

Chapter 2 uses the accounting model to determine net income. Revenues, expenses, net income, the income statement and retained earnings are covered.

Chapter 3 uses the accounting model to complete the accounting cycle. Journal entries are discussed in more detail as well as subsidiary ledgers and the closing process.

Chapter 4 covers adjusting entries.

Chapter 5 discusses the transactions unique to a merchandising business.

Chapter 6 covers cash and internal control. Sarbanes-Oxley is discussed as well as bank reconciliation and petty cash.

Chapter 7 covers accounts receivable and notes receivable. Bad debt expense is explained as well as the calculation of note interest.

Chapter 8 covers inventories, LIFO, FIFO, average and specific identification. The inventory impact on the financial statements is explained.

Chapter 9 covers fixed assets and various methods of depreciation.

Chapter 10 covers current liabilities such as accounts payable and notes payable as well as payroll.

Chapter 11 covers various types of bonds and the issuance of bonds at par, premium and discount.

Chapter 12 introduces corporations, capital stock, preferred stock, stock issuances and treasury stock.

Chapter 13 covers investments introducing held to maturity securities, trading securities and available-for-sale securities.

Chapter 14 introduces partnerships and LLCs and discusses the dissolution of both as well as membership obligations for each.

Chapter 15 covers cash flow analysis, both the direct method and indirect method for preparing the Cash Flow Statement. 

Chapter 16 is the financial statement analysis chapter covering ratios for operating performance, liquidity, and financial strength.