Synopsis

This introductory course aims to help you understand the fundamentals of accounting. A person who is new to business and accounting often has to struggle to understand basic business and accounting concepts. You may have even heard that accounting is only about number-crunching cookbook of rules. This course looks at accounting concepts beyond booking, dealing with people, creativity and judgement.

Course Outline:

This module consists of ten chapters, each introducing you to the different aspects of accounting.

Accounting information for decision-making

You will learn how businesses are set up and what they do before going further to see how accounting plays its role in business decision-making for a wide group of users. You will also have good overviews of the accounting process, functional areas of accounting and the financial statement reporting regulations at the national and international levels.

Accounting assumptions and principles

We finished Session 1 with the briefing that the accounting profession follows a hierarchy of policies, accounting standards and principles for its application in preparing and presenting accounting information to external users. For this session, we shall look into the basic underlying accounting assumptions and principles which are followed by accountants for the preparation and presentation of financial statements.

Basic financial statements

Primarily, financial statements present in dollar terms the story of enterprises. You will study the basic financial statements which in essence attempt to answer questions such as the followings. Where have we obtained our funds and what assets have we acquired with those funds? How much money did we make? Why has net worth increased or reduced over the period? How much cash have we and where has it gone?

The accounting process

In the previous session, we learnt the basic financial statements19-Mar-2009unting process which accountants use to identify and record transactions, as well as prepare financial statements of a business entity.

Accounting for retailing

During this session, we shall walk through a worked example on the accounting process, commencing from collection of data on economic transactions and ending with preparation of financial statements for a retailing business. We will also look at how this accounting process is handled under a manual system as well as a computerised one.

Accounting for inventories

In the previous session, you were introduced to a retailing business where the primary area of business is the sale of products. During this session, you will learn how to determine the values of inventories on the Balance Sheet and the Profit and Loss Statement.

Accounting for cash, debtors and creditors

During this session, we shall study accounting on 3 key areas: cash, debtors and creditors arising through trading. Cash: You will learn controls to safeguard cash, how to do bank reconciliation, and how to maintain petty cash records. Debtors and creditors: You will look into procedures to recognise bad debts arising from trade debtors; and the accounting on subsidiary and control accounts for trade debtors and creditors.

Accounting for fixed assets and depreciation

During this session, you will learn an important Balance Sheet item which is the fixed assets used in the operations of the business. You will also study depreciation accounting which is concerned with the allocation of fixed asset costs over future accounting periods.

Analysis and interpretation of financial statements

During this session, you will learn a systematic approach for the whole analysis and interpretation process using ratios and other financial devices. You will also learn the inter-relationship of the different ratios and financial devices in a systematic way, so that you can use them meaningfully.

Ratio analysis

During this session, we will cover the different types of ratios used for analysis of financial statements ranging from smaller businesses to listed companies. A worked example will be given to let you understand how the computations are done.

Instructional Methodology

The course is delivered in our virtual classroom. Please click this link for a one-page summary of the virtual classroom.

Each lesson consists of explanation of the basic knowledge, follows by online exercises.

Expected Outcome

On completing this course, you will understand basic business and accounting concept in particular with respect to the following.

• Accounting information for decision-making
• Accounting assumptions and principles
• Basic financial statements
• The accounting process
• Accounting for retailing
• Accounting for inventories
• Accounting for cash, debtors and creditors
• Accounting for fixed assets and depreciation
• Analysis and interpretation of financial statements
• Ratio analysis