This course describes how the five main types of accounts and the four primary
financial statements work together to provide an organization with a complete
view of its financial position and its profit or loss state.
Susan owns a small start-up company that requires her to have a great deal of
inventory on hand in case she receives a large order that is needed
immediately. Consequently, she spends money on supplies she may never need.
Because she is busy trying to stay on top of everything, she does not focus on
keeping track of her company’s financial state. Unfortunately, at the end of
the year, when she does spend time figuring out her financials, she realizes
she is overspending in certain areas and is at a loss for the year. If Susan
had periodically tracked her financial position and whether her business-
running methods were profitable methods throughout the year, she may have been
able to readjust appropriately to steer her company toward profitability
instead of incurring a loss for the year.
In this course, you will explore a high-level overview of financial accounting
and its account types and statements. You will examine the Financial
Statements framework, which includes a discussion about the five basic types
of accounts as well as the four primary financial statements and how all of
these components fit together. You will examine the balance sheet and how it
helps an organization measure its financial position through the valuation of
various assets, liabilities, and equities that the organization may have.
Additionally, you will explore how to calculate the profit and loss of an
organization after particular revenues and expenses have been appropriately
recognized. Finally, you will further expand on the results of the balance
sheet and income statement by covering what types of additional details can be
provided in the Statement of Shareholders' Equity and the Statement of Cash
After completing this course, you should be able to:
Identify the basic types of accounts and financial statements that make up the Financial Statements framework and how they are affected by specific events.
Measure the financial position of an organization using a balance sheet.
Calculate the profit or loss of an organization using an income statement.
Analyze the balance sheet and income statement findings further by examining the Statement of Shareholders’ Equity and the Statement of Cash Flows.