• Course Introduction

        • Time: 57 hours
        • Free Certificate
        Accounting is the language of business. If you are learning accounting for the first time, embracing its foundational concepts may be a challenging process. Mastery of accounting primarily rests in your ability to critically think through and synthesize the information as it applies to a given situation. You should approach 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 this course will focus on financial accounting. Accounting as a business discipline can be viewed as a system of compiled data. Data should not be confused with information. In accounting, data is the raw transactions or business activity that happens within any business entity. For example, if someone uses $30,000 of their savings to start a business, that is a point of data. Now that you have this data, what are you going to do with it? Of course, the answer is accounting!

        Taking data and transforming it into useful information is what happens when a business uses accounting. Information is the communicated results data as it has happened in a business within a period of time. This information is used by decision-makers determine specific courses of action for the business.

        This course will introduce you to financial accounting in preparation for more advanced business topics. Recording financial information in a standard format allows managers, investors, lenders, stakeholders, and regulators to make appropriate decisions. In this course, we will look at the Income Statement, Balance Sheet, Statement of Cash Flows, and Statement of Shareholders' Equity. You will learn how to compile and analyze these financial statements, determine the value of a firm, and compare the firm to its competitors.

        First, read the course syllabus. Then, enroll in the course by clicking "Enroll me in this course". Click Unit 1 to read its introduction and learning outcomes. You will then see the learning materials and instructions on how to use them.

      • Unit 1: Accounting Environment, Decision-Making, and Theory

        In this introductory unit of the course, you will learn about a variety of the foundational elements of accounting that are crucial to the understanding of the material in this course.

        To understand financial accounting, you will need an in-depth understanding of the four basic financial statements and the purpose they each serve. You will also need to understand how data is captured and transformed into information and how the accounting equation seeks to ensure that you are properly recording the data.

        Throughout the course you will be introduced to various career fields and employment positions associated with the concepts of this course. Consider this information an exploration of the viability of accounting as an employment option and as a means of reinforcing how significant these concepts are to the success of business operations.

        Completing this unit should take you approximately 11 hours.

      • Unit 2: Recording Business Transactions

        This unit of the course correlates with Chapter 3 of the primary text. There is a specific way that data is recorded, so a foundational understanding of this process is necessary. Understanding the meaning and use of concepts like journal, journal entries, ledger, trial balance, debits and credits, and vertical/horizontal analysis is an intricate part of your financial accounting study.

        Completing this unit should take you approximately 6 hours.

      • Unit 3: Adjustments for Financial Reporting

        By now, you should have a foundational understanding of accounting and its guiding principles and concepts. You will now need to learn how to synthesize this information, which often requires an adjusting journal entry. Before you can learn about adjusting entries, you will need to be able to distinguish between cash- and accrual-based accounting. There is some distinction between the two methods, and while some smaller business may be able to effectively use a cash basis of accounting, most organizations use an accrual basis of accounting. Subsequently, the accrual basis is the foundation on which you are learning the concepts presented in this course.

        Completing this unit should take you approximately 3 hours.

      • Unit 4: Completing the Accounting Cycle

        Up until this point in the course, you have been learning how to take the transactions that happen within a business entity and process this raw data into useable information. As mentioned earlier in the course, this useable information comes in the form of the financial statements. This section of the course will explain how to review and summarize the accounting cycle, as well as prepare the income statement, the statement of retained earnings, and the balance sheet. Additionally, you will be provided with insight on how to use an accounting worksheet to organize your work, prepare adjusting entries, and complete a post- closing trial balance.

        Completing this unit should take you approximately 3 hours.

      • Unit 5: Financial Reporting and Financial Statement Analysis

        In this unit, you will learn about financial reporting and examine the financial statements of a public company. Public companies are required to file their financial statements with the SEC on a quarterly and annual basis. Fortunately for us, the SEC has a standard format for presenting financial information. This assists us in reading and interpreting financial information.

        Completing this unit should take you approximately 5 hours.

      • Unit 6: Accounting for Inventory – Measuring and Reporting

        In order for many businesses to conduct daily activity, they will have to buy merchandise for their end users. There are a number of ways to account for the purchasing and integration of this merchandise within a business, and the decision on how a business entity will account for this from an accounting perspective rests on a number of factors. In this section of the course, you will be introduced to the inventory valuation concepts of FIFO (First in First Out) and LIFO (Last in First Out), as well as the concept of weighted-average. Choosing an inventory valuation method is a major decision a merchandising business entity will have to make even before the merchandise is purchased; it is also a decision that dictates the valuation of the merchandise on hand within the business entity.

        Completing this unit should take you approximately 7 hours.

      • Unit 7: Receivables and Payables Identified

        During the course of regular business, it is not uncommon to provide credit to some customers. Once a business provides an extension of credit, it now owns a promise that it will be paid back. As part of this agreement, the business entity will charge interest at varying rates, which are typically imposed based on the credit worthiness of the customer. It is also not uncommon that the business will not be able to collect some of these credit extensions. In accounting, we identify these promises someone makes to a business entity as an accounts receivable. This section of the course will provide analysis and insight on accounts receivables and highlight specific information on what to do when a business extends credit to its customers.

        Also, during the regular course of business, there may come times where the business entity needs to make specific purchases to support the regular business activity, but they do not have enough cash on hand to meet these demands from a current asset perspective. In these types of situations, it is viable for a business entity to possess lines of credit. In this type of situation, the business entity has created a promise to pay someone else as a result of being extended a particular line of credit or goods on credit. These types of transactions would be considered payables and would in fact create liabilities for the organization. Please remember that earlier in the course, you were introduced to the fact that a liability can also be considered a promise to pay.

        Completing this unit should take you approximately 3 hours.

      • Unit 8: Accounting for Property, Plant, and Equipment

        Property, plant, and equipment require the largest amount of investment for a company. This unit introduces you to the life cycle of tangible long-term assets: acquisition, depreciation, and disposal.

        This unit also includes other long-term assets such as natural resources and intangible assets. Companies such as mines and lumber companies account for the resources that are extracted from the environment. The most common intangible asset is goodwill, which is recorded when acquiring a company.

        Completing this unit should take you approximately 4 hours.

      • Unit 9: Long-Term Liabilities and Stockholders’ Equity

        This unit addresses the two ways in which a company can raise funds: debt and equity. In order to finance long-term assets, companies issue long-term debt in the form of bonds. Equity is most often issued when companies begin operations to raise startup capital. In BUS202: Principles of Finance, you may learn more about the balance between debt and equity in a company.

        Completing this unit should take you approximately 8 hours.

      • Unit 10: Statement of Cash Flows

        Remember that the balance sheet and income statement are prepared using the accrual basis of accounting. The statement of cash flows is prepared using information from the accrual basis statements to tell what cash was received for and how cash was spent. The statement of cash flows classifies business transactions in to operating activities, investing activities, and financing activities.

        Completing this unit should take you approximately 7 hours.

      • Study Guides

        These study guides will help you get ready for the final exam. They discuss the key topics in each unit, walk through the learning outcomes, and list important vocabulary terms. They are not meant to replace the course materials!

      • Course Feedback Survey

        Please take a few minutes to give us feedback about this course. We appreciate your feedback, whether you completed the whole course or even just a few resources. Your feedback will help us make our courses better, and we use your feedback each time we make updates to our courses.

        If you come across any urgent problems, email contact@saylor.org or post in our discussion forum.

      • Certificate Final Exam

        Take this exam if you want to earn a free Course Completion Certificate.

        To receive a free Course Completion Certificate, you will need to earn a grade of 70% or higher on this final exam. Your grade for the exam will be calculated as soon as you complete it. If you do not pass the exam on your first try, you can take it again as many times as you want, with a 7-day waiting period between each attempt.

        Once you pass this final exam, you will be awarded a free Course Completion Certificate.

      • Saylor Direct Credit

        Take this exam if you want to earn college credit for this course. This course is eligible for college credit through Saylor Academy's Saylor Direct Credit Program.

        The Saylor Direct Credit Final Exam requires a proctor and a proctoring fee of $25. To pass this course and earn a Proctor-Verified Course Certificate and official transcript, you will need to earn a grade of 70% or higher on the Saylor Direct Credit Final Exam. Your grade for this exam will be calculated as soon as you complete it. If you do not pass the exam on your first try, you can take it again a maximum of 3 times, with a 14-day waiting period between each attempt.

        Once you pass this final exam, you will be awarded a Credit-Recommended Course Completion Certificate and an official transcript.