This is a free online course offered by the Saylor Foundation.
'Accounting can be viewed as the language of business. If you are learning accounting for the first time, embracing the foundational concepts of this discipline, may be a challenging process. The difficulty primarily rests in your individual ability to critically think through and synthesize the information as it applies within a given situation. You should view the learning of accounting the same way you would approach learning a foreign language. It will take time and practice to ensure you remember the concepts.
There are a number of sub-disciplines that fall under the umbrella of “Accounting,” but in this course, we will be focused on Financial Accounting. Accounting as a business discipline can be viewed as a system of compiled data. The word ‘data’ should not be confused with information. Data as filtered through accounting should be viewed as the raw transactions or business activity that happens within any business entity. For example: Someone decides to start a business and uses $30,000 of their savings. The use of these funds as reflected within the start of this new business is in fact data. Now that you have this data, what are you going to do with it? The answer to this question can be summed up in one word—Accounting! Taking this data and then transforming it into useful information is what happens when accounting is being implemented within a business. The word ‘information’ should be viewed as the communicated results of the data as it has happened in the business, within a specified period of time. This information is what is used by decision makers to support how they determine specific courses of action within the business, i.e., how to best use the aforementioned $30,000 for the best interest of the business.
The sub-discipline of financial accounting culminates into a series of reports (information) that is used by individuals who are external to the organization. Examples of individuals who would have an interest in this information would include: Creditors— who would use this information to determine your credit worthiness; Investors—who would use this information to determine if your business would be a good/bad investment (if applicable); Government Regulatory Agencies—who would use the information to ensure you are properly report a true financial heath state of the business; Taxing Authorities—who would use this information to ensure they are properly assessing and collecting taxes against your business. Additionally, business owners, managers, and executives would use this information as well to make strategic business decisions and to establish goals for the business.
This course introduces you to financial accounting in preparation for more advanced business topics within the business major. Having financial information in a standard format allows managers, investors, lenders, stakeholders, and regulators to make appropriate decisions regarding their respective interests. The formats of focus in a financial accounting course will be identified as the Income Statement (sometimes called P&L or profit/loss statement), the Balance Sheet, Statement of Cash Flows, and Statement of Shareholders’ Equity. In this course, you will learn how to compile and analyze these financial statements, determine the value of a firm, and compare the firm to its competitors.'
