Acc 225

ACC557_W1: Financial Accounting - Accounting in Action

Slide # | Topics | Narration |

Slide 1 | Intro | Welcome to Financial Accounting.  In this lesson, we will discuss Accounting in Action. Next slide. |

Slide 2 | Topics | The following topics will be covered in this lesson: What is accounting; The building blocks of accounting; The basic accounting equation; Using the accounting equation; and Financial statements. Next slide. |

Slide 3 | What is Accounting? | We will begin this lesson with discussing what accounting is. Accounting is made up of three distinct activities. The first activity is to identify the transaction to determine if it is an economic activity. All transactions do not impact the financial statements if they do not involve cash receipts, purchases, and future obligations to pay a debt or revenue. Once the activity has been identified, it must then be recorded. Accounting transactions are recorded with journals prepared in chronological order. Finally, the activity for the period is communicated by distributing financial statements to interested users. It is extremely important that the information is reported accurately to enable accountants to analyze and interpret the data before distributing the financial statements. The users of the financial statements rely on this information to make critical business decisions.  Next slide. |

Slide 4 | What is Accounting? Continued | The first activity is identifying transactions that involve analyzing documents to determine whether they should be recorded in the accounting records. Documents should be analyzed to determine if the company has made a purchase or entered into a contract where debts are owed to creditors. For instance, a company may collect qualitative hiring data about its employees that should be captured in an employee database; however, there are no recordable economic events that impact the financial statements. Once transactions have been identified, they are...