Accounting Essentials explores the fundamental and essential concepts and principles of accrual accounting. At the end of the four online sessions, participants will understand financial statement structure and composition, double entry accounting, the accounting equation, debits and credits, critical accounting principles, the effect of improperly recorded transactions, and the generation of the balance sheet and income statement from a series of recorded transactions over a finite time period.
Target Audience
Analysts and lenders with little if any accounting knowledge as well as more experienced analysts and lenders interested in an intensive review of accounting concepts, principles, and application.
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1. Financial Statement Structure and Composition
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Recording
... first things first
In the first webinar session, participants review definitions for revenue, expense, asset, liability, and net worth accounts, examine a range of accounts in identifying income statement and balance sheet accounts, explore the rationale for the order of accounts on the income statement and balance sheet, and review the process of constructing both an income statement and balance sheet from scrambled accounts for a retailer and real estate property management company.
Target Audience:
Analysts and lenders with little if any accounting knowledge as well as more experienced analysts and lenders interested in an intensive review of accounting concepts, principles, and application.
Prerequisites:
Some familiarity with an accrual income statement and balance sheet for a commercial business.
Objectives:
By the end of the webinar session, participants will be able to:- Define revenue, expense, asset, liability, and net worth and explain the rationale for assignment of these accounts to either the income statement or balance sheet.
- Properly classify each account in a list of financial statement accounts as a revenue account, expense account, asset account, liability account, or net worth account.
- Identify the appropriate order of revenue and expense accounts on the income statement and explain the rationale for the sequence of accounts.
- Identify the appropriate order of asset accounts, liability accounts, and net worth accounts on the balance sheet and explain the rationale for the sequence of accounts.
- Identify all income statement and balance sheet accounts from a list of scrambled accounts for a retail shoe store and create the proper income statement and balance sheet for the company.
- Identify all income statement and balance sheet accounts from a list of scrambled accounts for a real estate property management company and create the proper income statement and balance sheet for the company.
Materials and Preparation for this Course:
- Terms and Concepts - Accounting
- Exercise for the Session 1 Webinar
- Webinar Presentation Slides
- Webinar Poll Questions
Preparation
As preparation for the webinar session, please:
- Review Terms and Concepts - Accounting.
- Review the exercise.
- Complete as many of the steps in the exercise as time allows prior to the webinar.
2. Double Entry Accounting, the Accounting Equation, and Debits and Credits
... keeping score in the business world
In the second webinar session, participants examine the purpose and use of double entry accounting, review the accounting equation and the impact of net income or loss on the accounting equation components, explore the purpose and use of debits and credits and the manner in which debits and credits impact accounts within the five accounting blocks, review the correct debit and credit entries for a range of transactions, and explore the use of T accounts in illustrating increases or decreases in account balances.
Target Audience:
Analysts and lenders with little if any accounting knowledge as well as more experienced analysts and lenders interested in an intensive review of accounting concepts, principles, and application.
Prerequisites:
Some familiarity with an accrual income statement and balance sheet for a commercial business, as well as completion of Session 1.
Objectives:
By the end of the webinar session, participants will be able to:- Understand and apply the concept of double entry accounting.
- Understand and use the accounting equation.
- Understand and apply debits and credits in recording business transactions.
- Identify the impact on selected accounts in the five accounting blocks from the application of debit and credit entries.
- Properly record several business transactions via the application of debit and credit entries.
- Properly use T accounts to illustrate business transactions.
Materials and Preparation for this Course:
- Terms and Concepts - Accounting
- Exercise for the Session 2 Webinar
- Webinar Presentation Slides
- Webinar Poll Questions
Preparation
As preparation for the webinar session, please:
- Read “Double Entry Accounting”, “The Accounting Equation”, “Debits and Credits”, and ”T Accounts” in Terms and Concepts – Accounting.
- Review the exercise.
- Complete as many of the steps in the exercise as time allows prior to the webinar.
3. Critical Accounting Principles and Assumptions and More Debits and Credits
... principles to live by
In the third webinar session, participants examine the historic cost principle, the conservatism principle, the revenue recognition principle, the matching principle, and the going concern assumption. They explore the correct accounting entries to record bad debts, decreased asset values, and deferred revenue and revenue recognition. Further, participants examine the impact on bottom line profit from failure to correctly apply the matching principle and estimate likely income statement and balance sheet values in the absence of the going concern assumption.
Target Audience:
Analysts and lenders with little if any accounting knowledge as well as more experienced analysts and lenders interested in an intensive review of accounting concepts, principles, and application.
Prerequisites:
Some familiarity with an accrual income statement and balance sheet for a commercial business, as well as completion of Sessions 1 and 2.
Objectives:
By the end of the webinar session, participants will be able to:- Explain the role and use of generally accepted accounting principles and the differences between accrual and cash accounting.
- Explain the concept, use, and relevance of the historic cost principle and identify values on the financial statements of a retail shoe store recorded via application of this principle.
- Explain the concept, use, and relevance of the conservatism principle and apply it to selected accounts on the financial statements of a real estate property management company.
- Explain the concept, use, and relevance of the revenue recognition principle and apply it to selected accounts on the financial statements of a software company.
- Explain the concept, use, and relevance of the matching principle and apply it to selected accounts on the financial statements of a manufacturing company.
- Explain the concept, use, and relevance of the going concern assumption and apply it to selected accounts on the financial statements of a manufacturing company.
Materials and Preparation for this Course:
- Terms and Concepts - Accounting
- Financial Statement Excerpts for Fresno Properties, LLC, Information Access, Inc., Sandover Contractors, Inc., Sierra Products, Inc., and Sweet Feet
- Exercise for the Session 3 Webinar
- Webinar Presentation Slides
- Webinar Poll Questions
Preparation
As preparation for the webinar session, please:
- Read “The Cost Principle”, “The Conservatism Principle”, “The Revenue Recognition Principle”, “The Matching Principle”, and “The Going Concern Assumption” in Terms and Concepts – Accounting.
- Review the exercise.
- Complete as many of the steps in the exercise as time allows prior to the webinar.
4. Recording Transactions and Creating the Balance Sheet and Income Statement
... pulling it all together
In the fourth and final webinar session, participants examine the proper debit and credit entries to post 90 days of business transactions for both a retailer and real estate property management company, explore the benefits and possible pitfalls of the trial balances, review the use of general ledger entries to structure a balance sheet and income statement for the 90 day period in question, and address the interpretation of the resulting balance sheets and income statements.
Target Audience:
Analysts and lenders with little if any accounting knowledge as well as more experienced analysts and lenders interested in an intensive review of accounting concepts, principles, and application.
Prerequisites:
Some familiarity with an accrual income statement and balance sheet for a commercial business, as well as completion of Sessions 1, 2, and 3.
Objectives:
By the end of the webinar session, participants will be able to:- Apply debit and credit entries to record a comprehensive series of transactions over a stated time period for a retail shoe store and a real estate property management company.
- Use the trial balance and identify the areas of potential difficulty in relying on the trial balance to assure accurate posting of transactions.
- Use general ledger entries to create an income statement and balance sheet for a specific time period.
- Identify the profitability of a company over the stated time period based on the assembled financial statements.
- Identify events that result in an increase or decrease in net worth and examine their implications for the risk position of the company.
- Identify the differences in accrual and cash income statements by use of the general ledger accounting entries.
Materials and Preparation for this Course:
- Terms and Concepts - Accounting
- Financial Statement Excerpts for Sierra Products, Inc.
- Exercise for the Session 4 Webinar
- Webinar Presentation Slides
- Webinar Poll Questions
Preparation
As preparation for the webinar session, please:
- Review the exercise, including the Trial Balance overview, the December Transactions for Sierra Products, the Trial Balance Worksheet for Sierra Products, and the financial statements for Sierra Products.
- Complete as many of the steps in the exercise as time allows prior to the webinar.