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Principles of Accounting, Volume 1: Financial Accounting

Learn financial accounting online and make smarter, more informed money decisions.

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About This Course

Learn to read balance sheets and spot valuable investments with this Financial Accounting course. 

Master financial statements, monitor performance, and make wise decisions.  Gain the skills to avoid costly mistakes, manage finances, and advance in your professional or personal life with assurance.

Skills You’ll Get

 

Interpret balance sheets, income statements, and cash flow reports. Understand key financial metrics to assess and monitor business health. Spot red flags and opportunities to make better financial choices. Get comfortable with journal entries, adjustments, and preparing reports. Grasp core accounting principles to build confidence for future learning. Use real-world examples to manage finances and make informed decisions.

Download Course Outline

1

Preface

  • About OpenStax
  • About OpenStax resources
  • About Principles Accounting
2

Role of Accounting in Society

  • Explain the Importance of Accounting and Distinguish between Financial and Managerial Accounting
  • Identify Users of Accounting Information and How They Apply Information
  • Describe Typical Accounting Activities and the R...g, Recording, and Reporting Financial Activities
  • Explain Why Accounting Is Important to Business Stakeholders
  • Describe the Varied Career Paths Open to Individuals with an Accounting Education
  • Summary
  • Questions
3

Introduction to Financial Statements

  • Describe the Income Statement, Statement of Owne...tatement of Cash Flows, and How They Interrelate
  • Define, Explain, and Provide Examples of Current...rent Liabilities, Equity, Revenues, and Expenses
  • Prepare an Income Statement, Statement of Owner’s Equity, and Balance Sheet
  • Summary
  • Questions
  • Exercise Set A
  • Exercise Set B
  • Problem Set A
  • Problem Set B
  • Thought Provokers
4

Analyzing and Recording Transactions

  • Describe Principles, Assumptions, and Concepts o...g and Their Relationship to Financial Statements
  • Define and Describe the Expanded Accounting Equation and Its Relationship to Analyzing Transactions
  • Define and Describe the Initial Steps in the Accounting Cycle
  • Analyze Business Transactions Using the Accounti...of Business Transactions on Financial Statements
  • Use Journal Entries to Record Transactions and Post to T-Accounts
  • Prepare a Trial Balance
  • Summary
  • Questions
  • Exercise Set A
  • Exercise Set B
  • Problem Set A
  • Problem Set B
  • Thought Provokers
5

The Adjustment Process

  • Explain the Concepts and Guidelines Affecting Adjusting Entries
  • Discuss the Adjustment Process and Illustrate Common Types of Adjusting Entries
  • Record and Post the Common Types of Adjusting Entries
  • Use the Ledger Balances to Prepare an Adjusted Trial Balance
  • Prepare Financial Statements Using the Adjusted Trial Balance
  • Summary
  • Questions
  • Exercise Set A
  • Exercise Set B
  • Problem Set A
  • Problem Set B
  • Thought Provokers
6

Completing the Accounting Cycle

  • Describe and Prepare Closing Entries for a Business
  • Prepare a Post-Closing Trial Balance
  • Apply the Results from the Adjusted Trial Balanc...d Explain How These Measures Represent Liquidity
  • Appendix: Complete a Comprehensive Accounting Cycle for a Business
  • Summary
  • Questions
  • Exercise Set A
  • Exercise Set B
  • Problem Set A
  • Problem Set B
  • Thought Provokers
7

Merchandising Transactions

  • Compare and Contrast Merchandising versus Service Activities and Transactions
  • Compare and Contrast Perpetual versus Periodic Inventory Systems
  • Analyze and Record Transactions for Merchandise Purchases Using the Perpetual Inventory System
  • Analyze and Record Transactions for the Sale of Merchandise Using the Perpetual Inventory System
  • Discuss and Record Transactions Applying the Two Commonly Used Freight-In Methods
  • Describe and Prepare Multi-Step and Simple Income Statements for Merchandising Companies
  • Appendix: Analyze and Record Transactions for Me...es and Sales Using the Periodic Inventory System
  • Summary
  • Questions
  • Exercise Set A
  • Exercise Set B
  • Problem Set A
  • Problem Set B
  • Thought Provokers
8

Accounting Information Systems

  • Define and Describe the Components of an Accounting Information System
  • Describe and Explain the Purpose of Special Journals and Their Importance to Stakeholders
  • Analyze and Journalize Transactions Using Special Journals
  • Prepare a Subsidiary Ledger
  • Describe Career Paths Open to Individuals with a... Education in Accounting and Information Systems
  • Summary
  • Questions
  • Exercise Set A
  • Exercise Set B
  • Problem Set A
  • Problem Set B
  • Thought Provokers
9

Fraud, Internal Controls, and Cash

  • Analyze Fraud in the Accounting Workplace
  • Define and Explain Internal Controls and Their Purpose within an Organization
  • Describe Internal Controls within an Organization
  • Define the Purpose and Use of a Petty Cash Fund, and Prepare Petty Cash Journal Entries
  • Discuss Management Responsibilities for Maintaining Internal Controls within an Organization
  • Define the Purpose of a Bank Reconciliation, and...econciliation and Its Associated Journal Entries
  • Describe Fraud in Financial Statements and Sarbanes-Oxley Act Requirements
  • Summary
  • Questions
  • Exercise Set A
  • Exercise Set B
  • Problem Set A
  • Problem Set B
  • Thought Provokers
10

Accounting for Receivables

  • Explain the Revenue Recognition Principle and Ho...rrent and Future Sales and Purchase Transactions
  • Account for Uncollectible Accounts Using the Balance Sheet and Income Statement Approaches
  • Determine the Efficiency of Receivables Management Using Financial Ratios
  • Discuss the Role of Accounting for Receivables in Earnings Management
  • Apply Revenue Recognition Principles to Long-Term Projects
  • Explain How Notes Receivable and Accounts Receivable Differ
  • Appendix: Comprehensive Example of Bad Debt Estimation
  • Summary
  • Questions
  • Exercise Set A
  • Exercise Set B
  • Problem Set A
  • Problem Set B
  • Thought Provokers
11

Inventory

  • Describe and Demonstrate the Basic Inventory Valuation Methods and Their Cost Flow Assumptions
  • Calculate the Cost of Goods Sold and Ending Inventory Using the Periodic Method
  • Calculate the Cost of Goods Sold and Ending Inventory Using the Perpetual Method
  • Explain and Demonstrate the Impact of Inventory ...Errors on the Income Statement and Balance Sheet
  • Examine the Efficiency of Inventory Management Using Financial Ratios
  • Summary
  • Questions
  • Exercise Set A
  • Exercise Set B
  • Problem Set A
  • Problem Set B
  • Thought Provokers
12

Long-Term Assets

  • Distinguish between Tangible and Intangible Assets
  • Analyze and Classify Capitalized Costs versus Expenses
  • Explain and Apply Depreciation Methods to Allocate Capitalized Costs
  • Describe Accounting for Intangible Assets and Record Related Transactions
  • Describe Some Special Issues in Accounting for Long-Term Assets
  • Summary
  • Questions
  • Exercise Set A
  • Exercise Set B
  • Problem Set A
  • Problem Set B
  • Thought Provokers
13

Current Liabilities

  • Identify and Describe Current Liabilities
  • Analyze, Journalize, and Report Current Liabilities
  • Define and Apply Accounting Treatment for Contingent Liabilities
  • Prepare Journal Entries to Record Short-Term Notes Payable
  • Record Transactions Incurred in Preparing Payroll
  • Summary
  • Questions
  • Exercise Set A
  • Exercise Set B
  • Problem Set A
  • Problem Set B
  • Thought Provokers
14

Long-Term Liabilities

  • Explain the Pricing of Long-Term Liabilities
  • Compute Amortization of Long-Term Liabilities Using the EffectiveInterest Method
  • Prepare Journal Entries to Reflect the Life Cycle of Bonds
  • Appendix: Special Topics Related to Long-Term Liabilities
  • Summary
  • Questions
  • Exercise Set A
  • Exercise Set B
  • Problem Set A
  • Problem Set B
  • Thought Provokers
15

Corporation Accounting

  • Explain the Process of Securing Equity Financing through the Issuance of Stock
  • Analyze and Record Transactions for the Issuance and Repurchase of Stock
  • Record Transactions and the Effects on Financial...rty Dividends, Stock Dividends, and Stock Splits
  • Compare and Contrast Owners’ Equity versus Retained Earnings
  • Discuss the Applicability of Earnings per Share as a Method to Measure Performance
  • Summary
  • Questions
  • Exercise Set A
  • Exercise Set B
  • Problem Set A
  • Problem Set B
  • Thought Provokers
16

Partnership Accounting

  • Describe the Advantages and Disadvantages of Organizing as a Partnership
  • Describe How a Partnership Is Created, Including the Associated Journal Entries
  • Compute and Allocate Partners’ Share of Income and Loss
  • Prepare Journal Entries to Record the Admission and Withdrawal of a Partner
  • Discuss and Record Entries for the Dissolution of a Partnership
  • Summary
  • Questions
  • Exercise Set A
  • Exercise Set B
  • Problem Set A
  • Problem Set B
  • Thought Provokers
17

Statement of Cash Flows

  • Explain the Purpose of the Statement of Cash Flows
  • Differentiate between Operating, Investing, and Financing Activities
  • Prepare the Statement of Cash Flows Using the Indirect Method
  • Prepare the Completed Statement of Cash Flows Using the Indirect Method
  • Use Information from the Statement of Cash Flows to Prepare Ratios to Assess Liquidity and Solvency
  • Appendix: Prepare a Completed Statement of Cash Flows Using the Direct Method
  • Summary
  • Questions
  • Exercise Set A
  • Exercise Set B
  • Problem Set A
  • Problem Set B
  • Thought Provokers
A

Appendix A: Financial Statement Analysis

  • Financial Statement Analysis
  • Horizontal Analysis
  • Vertical Analysis
  • Overview of Financial Ratios
  • Advantages and Disadvantages of Financial Statement Analysis
B

Appendix B: Time Value of Money

  • Present Value of $1 Table
  • Present Value of an Ordinary Annuity Table
  • Future Value of $1 Table
  • Future Value of an Ordinary Annuity Table
C

Appendix C: Suggested Resources

  • Sample Financial Statements
  • Accounting Software and Tools
  • Personal Finance
  • Accounting-Related Organizations
  • Accounting Exams and Certificates

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To provide clear and accurate financial reporting, financial accounting uses principles such as consistency, relevance, reliability, and comparability.

This financial accounting online course makes accounting principles and their applications approachable through clear lessons and practical examples, so you avoid needless complexity and learn with ease.

No prior experience is needed. This basic financial accounting course will guide you from the very basics to advanced concepts with clear, practical lessons.

Normally, our students complete this course in 4-6 weeks, studying around 3-5 hours a week. But it completely depends on your pace and study frequency.

Yes, you receive a certificate of completion for this financial accounting online course to showcase skills on your resume and LinkedIn.

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  Discover best practices to analyze business health, do journal entries, and make profitable decisions.

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