See also our elementary

 General accounting course

 Table of contents

 

 

 

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I Introduction

  1. What is a firm?
  2. History of firms
  3. History of accounting

II Example of a small firm

  1. A workshop making toys (1)
  2. A workshop making toys (2)
  3. Production of large quantities of information
  4. First principles taught by the example
  5. Most of the main concepts of accounting are in the toy example

III From single-entry to double-entry accounting

  1. Why single-entry accounting, like in the booklet of our checkbook, is insufficient
  2. A page to record debtors, a page to record creditors: the emergence of double-entry accounting
  3. The basic concept of transaction: the "atom" of activity of a firm
  4. Posting transactions into accounts (1): general principles, the apparent paradox of "value coming in is a debit"
  5. Posting transactions into accounts (2): posting simple transactions, traditional vs real time inventory control

IV A complete accounting cycle up to the Trial balance

  1. The yearly accounting cycle: journal -> accounts -> Trial Balance -> adjustments -> Income Statement & Balance Sheet
  2. Posting a complete cycle of journal entries (1)
  3. Posting a complete cycle of journal entries (2)
  4. The balance of each account and the Trial Balance (TB)
  5. Revenue accounts and Capital accounts in the TB

V Adjustments to the Trial balance

  1. Why the TB needs to be adjusted to compute the Income Statement (IS)
  2. Adjustment for inventory
  3. Adjustment for amortization
  4. Provisions for bad or doubtful clients
  5. Prepayments and accruals

VI The Income Statement and the Balance Sheet

  1. Extraction of the revenue accounts from the adjusted TB: the Income Statement (IS)
  2. Replacing in the adjusted TB all the revenue accounts with the bottom line of the IS: the Balance Sheet (BS)
  3. IS and BS: a higher view

VII General principles of accounting and miscellaneous topics

  1. General rules and guidelines of double-entry accounting
  2. Stock valuation: FIFO, LIFO and other methods
  3. Impact of a series of transactions on the IS and BS: a complete exercise
  4. Alternative way to compute the COGS: elimination of the Purchases account and of stock adjustments

VIII Money

  1. Money 1
  2. Money 2

IX Accounting over several years

  1. Difference between the first accounting year, and the following years
  2. From one BS to the next, and the IS in between
  3. Income tax and dividends
  4. Accounting documents over several years

X A deeper look at the Balance Sheet

  1. Big measures in a balance sheet: equity, debt, capital employed, fixed assets, current assets, working capital
  2. The notion of liquidity
  3. The list of assets is fundamentally heterogeneous

XI Cash flow statement

  1. The cash flow statement (1): what is cash?
  2. The cash flow statement (2): reconciling cash evolution with the main accounting measures

XII Ratios

  1. The Return on Capital Employed (ROCE)
  2. Other ratios
  3. Stock management