Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Fundamental Accounting Equation

Financial Accounting

1. Introduction to Accounting

Fundamental Accounting Equation

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Multiple Choice

The process to go from transactions and events to financial statements begins with:

Posting to the ledger accounts

Identifying and analyzing transactions

Preparing the trial balance

Preparing adjusting entries

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Verified step by step guidance

Step 1: Begin by identifying and analyzing transactions and events. This involves determining the nature of the transaction, its impact on the financial position, and the accounts affected. For example, if a company purchases inventory, you would identify the accounts involved (Inventory and Cash or Accounts Payable).

Step 2: Record the transactions in the journal using the double-entry accounting system. Each transaction is recorded as a journal entry with debits and credits to the appropriate accounts. For example, a purchase of inventory might be recorded as a debit to Inventory and a credit to Cash or Accounts Payable.

Step 3: Post the journal entries to the ledger accounts. This step involves transferring the information from the journal to the general ledger, where each account has its own record. For instance, the Inventory account and Cash account would be updated based on the journal entry.

Step 4: Prepare the trial balance. This is a summary of all ledger accounts and their balances at a specific point in time. The trial balance ensures that total debits equal total credits, which is a fundamental principle of double-entry accounting.

Step 5: Prepare adjusting entries. These entries are made at the end of the accounting period to account for accrued revenues, accrued expenses, depreciation, and other adjustments necessary to reflect the true financial position of the company before preparing the financial statements.