• 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, 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 to know the purpose of each of the four basic financial statements, how data is captured and transformed into information, and how the accounting equation seeks to ensure that you are properly recording the data. Throughout this course, you will be introduced to various career opportunities related to the concepts of this course. Consider this information as an exploration of the viability of accounting as a career possibility and a way 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

        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 journals, journal entries, ledger, trial balance, debits and credits, and vertical/horizontal analysis is an important part of studying financial accounting.

        Completing this unit should take you approximately 6 hours.

      • Unit 3: Adjustments for Financial Reporting

        By now, you should understand the guiding principles and concepts of accounting. 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 businesses may be able to effectively use a cash basis of accounting, most organizations use an accrual basis of accounting. Because of this, we will use the accrual basis in this course.

        Completing this unit should take you approximately 3 hours.

      • Unit 4: Completing the Accounting Cycle

        So far, you've learned how to process the raw data of the transactions that happen in a business entity into useable information in the form of the financial statements. This unit will explain how to review and summarize the accounting cycle and prepare the income statement, the statement of retained earnings, and the balance sheet. You will also see 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. The SEC has a standard format for presenting financial information that helps us read and interpret financial information.

        Completing this unit should take you approximately 5 hours.

      • Unit 6: Accounting for Inventory – Measuring and Reporting

        Many businesses have to buy merchandise for their end-users to conduct their daily activities. 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 will account for this rests on a number of factors. This unit introduces the inventory valuation concepts FIFO (First in First Out), LIFO (Last in First Out), and the weighted average. Choosing an inventory valuation method is a major decision a merchandising business entity will have to make before the merchandise is purchased. It also dictates the valuation of the merchandise on hand within the business.

        Completing this unit should take you approximately 7 hours.

      • Unit 7: Receivables and Payables Identified

        During the course of regular business, it is common 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 customer's creditworthiness. It is also common 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 accounts receivable. This unit discusses accounts receivables and highlights specific information on what to do when a business extends credit to its customers.

        During the regular course of business, there will also be times where the business entity needs to make specific purchases to support the regular business activity when they do not have enough cash on hand from a current asset perspective. In these situations, the business should have lines of credit, where the business has promised to pay someone else as a result of being extended a particular line of credit or goods on credit. These transactions are considered payables and create liabilities for the organization. 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 the life cycle of tangible long-term assets: acquisition, depreciation, and disposal. This unit also includes other long-term assets like natural resources and intangible assets. Businesses like mines and lumber companies account for 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 a company can raise funds: debt and equity. 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. If you want to learn more about debt and equity, you may be interested in BUS202: Principles of Finance.

        Completing this unit should take you approximately 8 hours.

      • Unit 10: Statement of Cash Flows

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

        Completing this unit should take you approximately 7 hours.

      • Study Guide

        This study guide will help you get ready for the final exam. It discusses the key topics in each unit, walks through the learning outcomes, and lists important vocabulary. It is 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 proctoring fee of $5. 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.

        We are partnering with SmarterProctoring to help make the proctoring fee more affordable. We will be recording you, your screen, and the audio in your room during the exam. This is an automated proctoring service, but no decisions are automated; recordings are only viewed by our staff with the purpose of making sure it is you taking the exam and verifying any questions about exam integrity. We understand that there are challenges with learning at home - we won't invalidate your exam just because your child ran into the room!


        1. Desktop Computer
        2. Chrome (v74+)
        3. Webcam + Microphone
        4. 1mbps+ Internet Connection

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