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

The Financial Statements

Financial Accounting

1. Introduction to Accounting

The Financial Statements

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Multiple Choice

Which of the following items might a management team want to include on their Profit & Loss (P&L) statement that a CPA typically does not add?

Non-GAAP adjustments such as EBITDA

Interest expense

Depreciation expense

Cost of goods sold (COGS)

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Verified step by step guidance

Understand the purpose of a Profit & Loss (P&L) statement: It is a financial report summarizing revenues, costs, and expenses over a specific period to determine the net profit or loss.

Recognize the difference between GAAP (Generally Accepted Accounting Principles) and Non-GAAP measures: GAAP is standardized and used by CPAs, while Non-GAAP adjustments are often used by management to provide additional insights into financial performance.

Identify the items typically included by a CPA on a P&L statement: These include Interest Expense, Depreciation Expense, and Cost of Goods Sold (COGS), as they are standard GAAP-compliant components.

Understand Non-GAAP adjustments such as EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization): Management teams may include these adjustments to focus on operational performance by excluding certain expenses.

Conclude that management teams might include Non-GAAP adjustments like EBITDA on their P&L statement to provide a clearer picture of operational profitability, which is not typically added by CPAs following GAAP standards.