Introduction to Financial Accounting

Learn the fundamentals and building blocks of the accounting process
Free tutorial
Rating: 4.3 out of 5 (1,372 ratings)
18,136 students
Introduction to Financial Accounting
Free tutorial
Rating: 4.3 out of 5 (1,372 ratings)
18,136 students
Explain the format of the income statement and balance sheet
Define various financial statement terms (e.g. accounts receivable, prepayments, etc.)
Record financial statement transactions (e.g. invoicing, raising equity, buying inventory, etc.)
Prepare a simple income statement and balance sheet
Outline the format of the cash flow statement
Explain the difference between profit and cash
Prepare a simple cash flow statement using the balance sheet and income statement

Requirements

  • No prerequisite knowledge is required!
  • Access to a PC or Mac
  • An Internet connection, including the ability to play audio as courses include voice lectures
  • Familiarity with basic Internet applications (email and web browser)
  • A recent version of Microsoft Internet Explorer, Firefox, Chrome, Safari or another web browser
  • An updated version of Microsoft Excel
Description

Introduction to Accounting course overview:

This FREE Introduction to Accounting  course will guide you through the fundamentals of the accounting process. We will explore the layout of the balance sheet, income statement, and cash flow statement; and demonstrate how to prepare financial statements from scratch. This fundamental accounting course is an essential building block required for performing financial modeling and other types of Wall Street financial analysis.

Constructing an income statement and balance sheet

In the first section of this free accounting course, we will explore the layout of the balance sheet and income statement,  how transactions are recorded, and how to prepare a simple balance sheet and income statement. By the end of this section, you will have a solid understanding of how to construct a balance sheet and income statement.

  • Explain the format of the income statement and balance sheet
  • Define various financial statement terms (e.g. accounts receivable, prepayments, etc.)
  • Record financial statement transactions (e.g. invoicing, raising equity, buying inventory, etc.)
  • Prepare a simple income statement and balance sheet

Constructing a cash flow statement

In this second section of this Intro to Accounting course, we will explore the layout of the cash flow statement, explain the differences between the cash flow statement and the income statement, and prepare a cash flow statement from scratch. By the end of this section, you will have a solid understanding of how to construct a cash flow statement.

  • Outline the format of the cash flow statement
  • Explain the difference between profit and cash
  • Prepare a simple cash flow statement using the balance sheet and income statement

More Accounting Course Details

This online accounting course incorporates a wide range of applied exercises and case studies. Sophisticated search and navigation tools allow you to go at your own pace while quizzes test what you’ve just learned. 

The course also includes two PDF reference guides – an accounting factsheet and a financial statements glossary - that can be used while taking the course and downloaded to your computer for future reference. This is the ultimate accounting crash course to prep for Wall Street careers!


Who this course is for:
  • This free online accounting course is designed for anyone who wants to review the fundamentals and building blocks of the accounting process.
  • This class will also be useful for professionals who work in finance and want to review the concepts required for financial modeling and valuation in CFI's later courses.
Curriculum
4 sections • 67 lectures • 1h 9m total length
  • Introduction
  • Downloadable Files
  • Session Objectives
  • The Three Key Financial Statements
  • The Balance Sheet: Assets
  • The Balance Sheet: Liabilities
  • The Balance Sheet: Shareholders' Equity
  • Balancing The Balance Sheet
  • Recording Transactions
  • Issuing Shares For 100 in Cash
  • Taking Out a Four Year Bank Loan
  • Buying a Property For 80
  • Buying Inventory For 60
  • Selling All Inventory For 90
  • Paying Salaries of 20
  • Paying Interest of 3
  • Current Assets Quiz
  • Defining Accounts Receivable and Payable
  • Buying and Selling on Credit
  • Valdero Inc. Exercise
  • Balance Sheet Quiz
  • Session Objectives
  • Role of the Income Statement
  • Income Statement: Gross Profit
  • Income Statement: Operating Income
  • Income Statement: Net Income
  • Creating a Full Income Statement
  • Recording Income and Expenses
  • Prepayments
  • Recording Expenses Part 2
  • Accrued Expenses
  • Finance Term Quiz
  • Luton Inc. Exercise
  • Depreciation
  • The Impact of Depreciation
  • Jenga Inc. Exercise
  • Quiz
  • Session Objectives
  • Downloadable Files
  • Three Key Financial Statements Review
  • The Role of Cash Flow Statement
  • The Cash Flow Statement: Operating Cash Flows
  • The Cash Flow Statement: Investing Cash Flows
  • The Cash Flow Statement: Financing Cash Flows
  • Profit vs. Cash Flow
  • The Idea of Matching Over Time
  • Matching Over Time Solution
  • PP&E Depreciation Recap
  • Depreciation and the Three Financial Statements
  • Different Types of Depreciation Methods
  • Calculating Operating Cash Flows - Direct Method
  • The Indirect Method
  • Operating Cash Flows - Indirect Method
  • Operating Cash Flows Example Period 1
  • Period 1 Solution
  • Operating Cash Flows Example Period 2
  • Period 2 Solution
  • Operating Cash Flows Example Period 3
  • Period 3 Solution
  • Operating Cash Flows Quiz
  • Johannes Operating Cash Flow Exercise
  • Deriving the Complete Cash Flow Statement
  • Stage One - Compare the Balance Sheets
  • Comparing Assets and Liabilities
  • Stage Two - Classifying the Cash Flows
  • Classifying Working Capital Cash Flows
  • Dealing With Property, Plant and Equipment (PP&E)
  • Calculating Net Capital Expenditures (Capex)
  • Net Capital Expenditure Quiz
  • Dealing With Retained Earnings
  • Preparing a Cash Flow Statement Exercise
  • Quiz
  • Conclusion
  • FREE RESOURCES

Instructor
CEO at Corporate Finance Institute | 350,000+ students
Tim Vipond
  • 4.4 Instructor Rating
  • 8,471 Reviews
  • 70,092 Students
  • 3 Courses

Tim is CEO of the Corporate Finance Institute® (CFI).

Corporate Finance Institute® (CFI) is a leading financial analyst certification company that provides career-focused financial modeling training. CFI’s courses have been delivered to tens of thousands of individuals at the top universities, investment banks, accounting firms and operating companies in the world. CFI is the official provider of the Financial Modeling & Valuation Analyst (FMVA)™ designation.

Tim has over 12 years of experience in capital markets across a wide range of transactions including mergers, acquisitions, divestitures, and capital raising totaling more than $3 billion.  

His professional experience includes investment banking, investment management, corporate development, strategy and corporate finance.