Accounting Fundamentals
[Prep Course] Construct an income statement, balance sheet, and cash flow
Course introduction
Downloadable files
Session objectives
Warm up question 1
The three key financial statements
The balance sheet: assets
The balance sheet: liabilities
The balance sheet: shareholders' equity
Balancing the balance sheet
Interactive exercise 1
Recording transactions
Issuing shares for 100 in cash
Taking out a four year bank loan
Buying a property for 80
Buying inventory for 60
Selling all inventory for 90
Paying salaries of 20
Paying interest of 3
Interactive exercise 2
Defining accounts receivable and payable
Buying and selling on credit
Interactive exercise 3
Vadero Inc. exercise
Session objectives
Warm up question 2
Role of the income statement
Income statement: gross profit
Income statement: operating income
Income statement: net income
Creating a full income statement
Interactive exercise 4
Recording income and expenses
Prepayments
Recording expenses part 2
Accrued expenses
Interactive exercise 5
Luton Inc. exercise
Depreciation
The impact of depreciation
Interactive exercise 6
Jenga Inc. exercise
Downloadable files
Session objectives
Three key financial statements review
The role of the cash flow statement
The cash flow statement: operating cash flow
The cash flow statement: investing cash flow
The cash flow statement: financing cash flow
Profit vs cash flow
The idea of matching over time
Matching over time solution
Interactive exercise 7
PP&E and depreciation recap
Depreciation and the three financial statements
Different types of depreciation methods
Interactive exercise 8
Calculating operating cash flows - direct method
The indirect method
Operating cash flows - indirect method
Operating cash flows example period 1
Period 1 solution
Operating cash flows example period 2
Period 2 solution
Operating cash flows example period 3
Period 3 solution
Interactive exercise 9
Johannes operating cash flow exercise
Deriving the complete cash flow statement
Stage one - compare the balance sheets
Comparing assets and liabilitites
Stage two - classifying the cash flows
Classifying working capital cash flows
Dealing with property, plant and equipment (PP&E)
Calculating net capital expenditures (capex)
Dealing with retained earnings
Interactive exercise 10
Preparing a cash flow statement exercise
Summary
Qualified assessment
Accounting Fundamentals course evaluation