Basics of Accounting and Financial Statements
Free online course on the structure of balance sheets, profit and loss account elements, as well as inventory valuation.Publisher: NPTEL
CertificationView course modules
This free online course on the basics of accounting and financial statements will begin by introducing the three main streams of accounting which are financial management, and cost accounting. You will learn about financial statements which include a balance sheet, income statement, cash flow and shareholder’s equity. You will then learn about the two formats of a balance sheet; short and detailed, as well as the elements of a balance sheet.
This course will then discuss the different types of assets which are current assets, non-current assets and investments. You will learn about the types of fixed assets; tangible and intangible, as well as how the asset is calculated using the sum of liabilities and the owners’ fund. You will be introduced to the profit and loss accounts, as well as its components which are income and expenses.
Lastly, this course will teach you about the concept of conservatism and depreciation. You will learn about the different methods of providing depreciation which is the straight-line method, reducing balance method, machine hour method, and production units method. You will also learn about inventory valuation as the tangible property which is held for sale in the normal course of business. Start this course today and improve your knowledge of the basics of financial accounting.Start Course Now
Introduction to Accounting and Financial Statements
Introduction to Accounting and Financial Statements - Learning Outcomes
Introduction and Scope of Accounting
Formats of Balance Sheet
Detailed Format and Elements of Balance Sheet
Basic Structure of a Balance Sheet
Types of Assets
Balance Sheet Elements and Equation
Introduction to Accounting and Financial Statements - Lesson Summary
Profit and Loss Account
Profit and Loss Account - Learning Outcomes
Format of Profit and Loss Account
Basic Structure of Profit and Loss Account
Elements of Profit and Loss Account
Concept of Conservatism and Depreciation
Methods of Providing Depreciation
Profit and Loss Account - Lesson Summary
On successful completion of this course you will be able to:
- Differentiate between the three streams of accounting.
- Explain the purpose of financial statements.
- Analyze the basic business model.
- Explain the purpose of a balance sheet.
- Explain the difference between tangible and intangible assets.
- Outline the equation for assets and owners fund.
- Outline the equation for calculating profit and loss.
- List the six categories of expenses in a profit and loss account.
- List the three qualitative characteristics of conservatism.
- List the causes of the depreciation of fixed assets.
- List the four methods of providing depreciation.
- Describe what is meant by inventory valuation.
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