Accounting Foundations: Master the Essentials in No Time

Discover how accounting uses quantitative money data to inform present decisions and shape the future, through the four flavors: bookkeeping, financial accounting, managerial accounting, and income tax accounting.

Record and organize financial events to inform decisions, using systematic bookkeeping for Walmart, Google, and personal budgets, turning past data into future actions.

Explore financial accounting fundamentals, including the balance sheet and income statement, and apply managerial accounting for internal decisions like product costing, budgeting, break-even analysis, outsourcing, and capital budgeting.

Explore how large companies maintain three sets of books—financial accounting, managerial accounting, and tax reports—and distinguish accrual-based financial income from taxable income tied to cash collection.

Explore how lenders, investors, suppliers, customers, employees, competitors, government agencies, politicians, and news reporters use financial statements to assess a company's viability, creditworthiness, and future prospects.

Explore how the balance sheet rests on the accounting equation, assets equal liabilities plus equity, and how assets like cash and inventory are financed by liabilities or owner's equity.

Examine Walmart's balance sheet, highlighting assets such as cash, inventories, and property and equipment, totaling 204 billion, and show how financing comes from retained earnings, long-term debt, and accounts payable.

Learn the balance sheet's limitations, where numbers show original costs rather than current values, and where home-grown intangibles like brands and customer relations may be missing.

Compare the balance sheet and the income statement: the balance sheet is a point-in-time snapshot, while the income statement covers a period, showing revenues minus expenses equals net income.

Define earnings per share as net income divided by the number of ownership shares, and note that earnings per share is a commonly referenced measure of a company's economic performance.

Explore Walmart's income statement for the year ended January 31st, 2018, highlighting sales of $495 billion, cost of sales of $373 billion, and net income of $9.862 billion.

Discover how the statement of cash flows tracks cash inflows and outflows across operating, investing, and financing activities. Learn the key metric cash from operating activities via Walmart's example.

Communicate a company’s performance to lenders and investors through balance sheet, income statement, cash flow statement, and explain assets, liabilities, equity, revenues, expenses, EPS, and operating, investing, and financing activities.

Learn how managerial accounting combines sales, profitability, and operating efficiency into ROI to support internal planning, control, and daily decision making across divisions, as illustrated by DuPont and Walmart.

Compute product costs by separating direct materials, direct labor, and overhead, and allocate overhead to the oak table to set an intelligent price.

Explore breakeven analysis with a real charity banquet example, separating fixed and variable costs to reveal the contribution margin and the attendees needed to break even.

Learn how budgeting in managerial accounting creates a cash budget, forecasting cash receipts and payments to anticipate lean months, simulate operations, borrow when needed, and manage risks.

Examine how performance evaluation shapes behavior by measuring metrics like meters drilled, wait times, and cost savings, proving you get exactly what you measure.

Trace the history of income taxes from ancient civilizations to the 1913 United States rates, and examine how income, deductions, and collection shaped tax policy.

Explore income tax fundamentals with a simple tax system: first $50 of income is tax-free, income above $50 taxed at 50%, and understand tax brackets, compliance, and planning.

Explore how average tax rate and marginal tax rate work in a simple progressive tax system, illustrating how tax varies with income and why marginal rate guides decisions.

Understand how tax deductions reduce taxable income and how tax credits directly lower taxes, with examples like charitable contributions, retirement contributions, and mortgage interest.

Compare ordinary income and capital gains income, noting capital gains are taxed at lower rates to encourage investing; explore examples and the role of tax shelters in classifying income.

Explain how income is taxed in brackets at 0%, compare average and marginal rates, and distinguish deductions from credits, ordinary income and capital gains, noting capital gains are taxed lower.

Identify the four flavors of accounting: bookkeeping, financial accounting, managerial accounting, and income tax accounting. Show how each flavor supports users, from transaction data to compliance with the tax code.