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Learn the basics of bookkeeping and how financial statements are created from ledgers in this essential accounting skills course.
Bookkeeping is about collecting information, recording events, and organizing those records to make better decisions. Accountants use the financial transactions recorded in ledgers or "books" to create a company's income statement and balance sheet. In this course, accounting professors Jim and Kay Stice walk you through the four key steps in the bookkeeping process: analyzing transactions, recording the effects, summarizing the effects, and preparing financial reports. They explain the components of a journal entryâdebits and creditsâand the essential questions a bookkeeper/accountant asks in reviewing those transactions. They also explain how accountants translate ledger information into financial statements and the role of computer programs in helping businesses manage their accounts.
Overview
Syllabus
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Introduction
- Introduction to bookkeeping
- The language of business
- How can we collect all this information?
- What you should know
- Introducing financial statements
- The balance sheet
- The income statement
- The statement of cash flows
- The importance of routine bookkeeping
- Analyzing transactions
- The accounting equation
- Using accounts to categorize transactions
- Debits and credits
- Examples of accounts to categorize transactions
- Including revenues, expenses, and dividends
- Words of caution
- Everything is recorded with debits and credits
- How do we record the effect of a transaction?
- Obtaining financing and buying equipment
- Buying supplies and inventory
- Providing services
- Selling inventory and providing services
- Incurring additional expenses
- Paying interest and dividends
- A note on journal entries
- The accuracy of debits and credits in the days of real ‘books’
- Posting journal entries to accounts
- Strangers and the power of financial statements
- Analyzing transactions
- Computing account balances
- The financial statements
- Who uses financial statements?
- The role of computers
- Where we have been and what is next
