Learn the fundamentals and building blocks of the accounting process
Free tutorial
4.4
Created by Scott Powell
English
What you’ll learn
- Explain the format of the income statement and balance sheet
- Define various financial statement terms (e.g. accounts receivable, prepayments, etc.)
- Record financial statement transactions (e.g. invoicing, raising equity, buying inventory, etc.)
- Prepare a simple income statement and balance sheet
- Outline the format of the cash flow statement
- Explain the difference between profit and cash
- Prepare a simple cash flow statement using the balance sheet and income statement
Requirements
- No prerequisite knowledge is required!
- Access to a PC or Mac
- An Internet connection, including the ability to play audio as courses include voice lectures
- Familiarity with basic Internet applications (email and web browser)
- A recent version of Microsoft Internet Explorer, Firefox, Chrome, Safari or another web browser
- An updated version of Microsoft Excel
Description
Introduction to Accounting course overview:
This FREE Introduction to Accounting course will guide you through the fundamentals of the accounting process. We will explore the layout of the balance sheet, income statement, and cash flow statement; and demonstrate how to prepare financial statements from scratch. This fundamental accounting course is an essential building block required for performing financial modeling and other types of Wall Street financial analysis.
Constructing an income statement and balance sheet
In the first section of this free accounting course, we will explore the layout of the balance sheet and income statement, how transactions are recorded, and how to prepare a simple balance sheet and income statement. By the end of this section, you will have a solid understanding of how to construct a balance sheet and income statement.
- Explain the format of the income statement and balance sheet
- Define various financial statement terms (e.g. accounts receivable, prepayments, etc.)
- Record financial statement transactions (e.g. invoicing, raising equity, buying inventory, etc.)
- Prepare a simple income statement and balance sheet
Constructing a cash flow statement
In this second section of this Intro to Accounting course, we will explore the layout of the cash flow statement, explain the differences between the cash flow statement and the income statement, and prepare a cash flow statement from scratch. By the end of this section, you will have a solid understanding of how to construct a cash flow statement.
- Outline the format of the cash flow statement
- Explain the difference between profit and cash
- Prepare a simple cash flow statement using the balance sheet and income statement
More Accounting Course Details
This online accounting course incorporates a wide range of applied exercises and case studies. Sophisticated search and navigation tools allow you to go at your own pace while quizzes test what you’ve just learned.
The course also includes two PDF reference guides – an accounting factsheet and a financial statements glossary – that can be used while taking the course and downloaded to your computer for future reference. This is the ultimate accounting crash course to prep for Wall Street careers!
Who this course is for:
- This free online accounting course is designed for anyone who wants to review the fundamentals and building blocks of the accounting process.
- This class will also be useful for professionals who work in finance and want to review the concepts required for financial modeling and valuation in CFI’s later courses.
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Course content
4 sections • 67 lectures • 1h 9m total lengthCollapse all sections
Constructing a Balance Sheet19 lectures • 19min
- Introduction01:26
- Downloadable Files00:01
- Session Objectives00:27
- The Three Key Financial Statements01:27
- The Balance Sheet: Assets01:32
- The Balance Sheet: Liabilities01:23
- The Balance Sheet: Shareholders’ Equity01:25
- Balancing The Balance Sheet01:35
- Recording Transactions00:53
- Issuing Shares For 100 in Cash00:47
- Taking Out a Four Year Bank Loan00:43
- Buying a Property For 8000:43
- Buying Inventory For 6000:40
- Selling All Inventory For 9001:39
- Paying Salaries of 2000:41
- Paying Interest of 300:42
- Current Assets Quiz1 question
- Defining Accounts Receivable and Payable01:24
- Buying and Selling on Credit01:28
- Valdero Inc. Exercise00:18
- Balance Sheet Quiz1 question
Constructing an Income Statement14 lectures • 13min
- Session Objectives00:31
- Role of the Income Statement00:47
- Income Statement: Gross Profit01:07
- Income Statement: Operating Income00:51
- Income Statement: Net Income00:38
- Creating a Full Income Statement01:41
- Recording Income and Expenses00:36
- Prepayments01:21
- Recording Expenses Part 200:21
- Accrued Expenses00:49
- Finance Term Quiz1 question
- Luton Inc. Exercise00:18
- Depreciation00:58
- The Impact of Depreciation02:16
- Jenga Inc. Exercise00:18
- Quiz5 questions
Constructing a Cash Flow Statement33 lectures • 37min
- Session Objectives00:35
- Downloadable Files00:01
- Three Key Financial Statements Review00:53
- The Role of Cash Flow Statement00:35
- The Cash Flow Statement: Operating Cash Flows01:01
- The Cash Flow Statement: Investing Cash Flows00:42
- The Cash Flow Statement: Financing Cash Flows00:42
- Profit vs. Cash Flow00:47
- The Idea of Matching Over Time00:38
- Matching Over Time Solution00:42
- PP&E Depreciation Recap00:59
- Depreciation and the Three Financial Statements01:35
- Different Types of Depreciation Methods02:53
- Calculating Operating Cash Flows – Direct Method00:44
- The Indirect Method01:28
- Operating Cash Flows – Indirect Method01:05
- Operating Cash Flows Example Period 100:46
- Period 1 Solution02:08
- Operating Cash Flows Example Period 200:37
- Period 2 Solution03:15
- Operating Cash Flows Example Period 300:47
- Period 3 Solution05:15
- Operating Cash Flows Quiz1 question
- Johannes Operating Cash Flow Exercise00:17
- Deriving the Complete Cash Flow Statement00:50
- Stage One – Compare the Balance Sheets00:43
- Comparing Assets and Liabilities01:17
- Stage Two – Classifying the Cash Flows00:34
- Classifying Working Capital Cash Flows00:27
- Dealing With Property, Plant and Equipment (PP&E)00:49
- Calculating Net Capital Expenditures (Capex)01:23
- Net Capital Expenditure Quiz1 question
- Dealing With Retained Earnings00:52
- Preparing a Cash Flow Statement Exercise00:21
- Quiz5 questions
- Conclusion01:25
Additional Resources1 lecture • 1min
- FREE RESOURCES00:23
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