Intro to Financial Accounting (BUS103) Overview

Accounting is the language of business. As a business discipline, accounting can be viewed as a system of compiled “data,” where data should be considered distinct from “information.” Accounting is the process whereby raw data (raw transactions or business activity over a given time period) is transformed into useful information.

This recorded financial information is provided in standard formats that allows managers, investors, lenders, stakeholders, and regulators to make appropriate decisions. These standard formats include the:

  • Income Statement
  • Balance Sheet
  • Statement of Cash Flows and
  • Statement of Shareholders' Equity

This course teaches how to compile and analyze these financial statements, determine a firm’s value, and compare a firm to its competitors.

Intro to Financial Accounting

The BUS103 course on Saylor Academy consists of 10 units:

Unit 1: Accounting Environment, Decision-Making, and Theory

  • Foundational elements of accounting
  • Purposes of the four basic financial statements
  • How data is captured and transformed into information
  • How the accounting equation seeks to ensure that you are properly recording the data

  • Est 11 hours, actual TBD hours, completed TBD

Unit 2: Recording Business Transactions

  • Foundational understanding of the specific process of recording data
  • Understanding the meaning and use of concepts like journals, journal entries, ledger, trial balance, debits and credits, and vertical/horizontal analysis

  • Est 6 hours, actual TBD hours, completed TBD

Unit 3: Adjustments for Financial Reporting

  • How to synthesize accounting information
  • Adjusting journal entries
  • Cash- versus accrual-based accounting
  • Smaller companies may be able to use cash basis, but most organizations use an accrual basis - this course uses accrual basis

  • Est 3 hours, actual TBD hours, completed TBD

Unit 4: Completing the Accounting Cycle

  • Reviews and summarizes the accounting cycle
  • How to prepare the income statement, statement of retained earnings, and balance sheet
  • How to use an accounting worksheet to organize your work, prepare adjusting entries, and complete a post-closing trial balance.

  • Est 3 hours, actual TBD hours, completed TBD

Unit 5: Financial Reporting and Financial Statement Analysis

  • Learn about financial reporting
  • Examine financial statements of a public company
  • Public companies are required to file financial statements with the SEC on a quarterly and annual basis

  • Est 5 hours, actual TBD hours, completed TBD

Unit 6: Accounting for Inventory – Measuring and Reporting

  • How to account for a business’s purchase and integration of merchandise
  • Decision of how a business will account for merchandise rests on many factors
  • Inventory valuation concepts FIFO (First in First Out), LIFO (Last in First Out), and the weighted average
  • Inventory valuation dictates the valuation of the merchandise on hand within the business

  • Est 7 hours, actual TBD hours, completed TBD

Unit 7: Receivables and Payables Identified

  • Businesses commonly provide credit to some customers, and once it does so it “owns” a promise that it will be paid back
  • Businesses may charge interest depending on the customers' creditworthiness and it may not be able to collect some of those credit extensions
  • These are collectively called “Accounts Receivable”

  • Businesses may also take on a line of credit if they do not have enough cash on hand
  • These transactions are a liability to the business and can be considered a promise to pay
  • These are collectively called “Accounts Payable”

  • Est 3 hours, actual TBD hours, completed TBD

Unit 8: Accounting for Property, Plant, and Equipment

  • Property, plant, and equipment require the largest investment for a company
  • Introduces the life cycle of tangible long-term assets: acquisition, depreciation, and disposal
  • Also includes other long-term assets like natural resources and intangible assets
  • Mines and lumber companies account for resources that are extracted from the environment
  • Most common intangible asset is goodwill, recorded when acquiring a company

  • Est 4 hours, actual TBD hours, completed TBD

Unit 9: Long-Term Liabilities and Stockholders' Equity

  • Addresses the two ways a company can raise funds: debt and equity
  • To finance long-term assets, companies issue long-term debt in the form of bonds
  • Equity is most often issued when companies begin operations and raise startup capital
  • More to learn about debt and equity in BUS102: Principles of Finance

  • Est 8 hours, actual TBD hours, completed TBD

Unit 10: Statement of Cash Flows

  • Balance sheet and income statement are prepared using accrual-based accounting
  • Statement of cash flows is prepared using information from accrual-basis statements to tell what cash was received and how it was spent
  • Statement of cash flows classifies business transactions as operating activities, investing activities, or financing activities

  • Est 7 hours, actual TBD hours, completed TBD

Final Exam Study Guide

  • Actual TBD hours, completed TBD

Time Commitment and Outcome

  • Started course 4/24/2022, completed TBD, TBD total hours
  • Final Grade: TBD