This module is aimed at students who are taking their very first accounting course. It covers fundamental accounting concepts such as the nature of debits and credits, the organization of accounts, and the recording of transactions. Accounting systems, the use of the specific and general journals and ledgers, is also covered. The trial balance, adjusting and closing entries, the adjusted trial balance, and simple financial statements are explained. Finally, the accounting for current assets and current liabilities is explained.
The following is a list of the specific topics this module covers.
- Accounts:
- Debits and Credits: how to increase or decrease assets and liabilities.
- Transactions:
- Recording a Transaction.
- Journals and Ledgers:
- System of Accounts: cash receipts/dispursements journal, A/R ledger, sales journal, general ledger, subsidiary ledgers, etc.
- Posting a journal amount to a ledger.
- Trial Balance, Adjusting and Closing Entries, Adjusted Trial Balance:
- Performing the trial balance.
- Making adjusting entries, closing entries.
- Performing the adjusted trial balance.
- Simple Balance Sheet, Simple Income Statement, Simple Notes:
- Account Organization: Grouping individual accounts into current assets, current liablities, long-term assets, long-term liabilities, owners' equity, sales, and expense categories.
- Preparing, presenting, and interpreting simple balance sheets, income statements, and notes to the financial statements.
- Cash:
- Bank balances, petty cash, bank reconciliations.
- Accounts Receivable:
- Accounts receivable ledger, accounts receivable aging, allowance for doubtful accounts, bad debts expense, bad debts write-off.
- Inventory:
- Inventory ledger, inventory valuation (LIFO method, FIFO method), allowance for obsolescence, inventory loss adjustment (shrinkage), cost of goods sold.
- Prepaids Assets:
- Account balance, expense computation, adjustment to account balance.
- Accounts Payable:
- Trade credit, sales taxes, income taxes, payroll taxes, dividends.
- Accrued Liabilities:
- Accrual computation, wages payable, utilities payable, interest payable.
- Comprehensive Example:
- An application of basic accounting principles to a simple going concern.
- Questions: 1,050 practice questions with explained solutions.
Pre-requisites for this Module
There are no college level pre-requisites for this module. Only a knowledge and understanding of basic math is needed. That understanding includes the ability to perform computations with both negative and positive numbers, percentages, and fractions.
This module is a pre-requisite for Introduction to Financial Accounting II.