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Learn MoreSmall Business and Managerial Accounting Training Tutorial
Rating: 4.0 out of 54.0(21 ratings)
260 students
What you'll learn
- Video Lessons
- Liability Accounts
- Equity Accounts
- Income Accounts
- Expense Accounts
- Payroll
- Financial Statements
- Much More!
Course content
16 sections • 71 lectures • 2h 16m total length
- Course Introduction1:04Welcome to Mastering Accounting Made Easy, a presentation of TeachUcomp, Inc. This course will examine basic accounting methods and their use in business. By the end of this course, you should understand basic accounting terminology, the application of those concepts, and how to make management decisions using ratios and formulas. Learn this and more during this lecture.
- What Is Accounting?1:25Accounting is an information system that records, identifies, and communicates the economic events of an organization or business to interested users. Accounting is very important for a business to stay organized, and for managers to make decisions. The ultimate purpose of financial information is to provide data to users for decision making. Learn this and more during this lecture.
- Accounting Methods3:15There are many different forms and financial statements that can be used to record economic events in a business. There are also ratios and formulas that can be used to check the financial health and the current status of a business or organization. We will discuss these ratios and formulas in later lessons in this tutorial. However you should be aware of some basic terminology. Learn this and more during this lecture.
- Ethics in Financial Reporting2:02In recent years, many financial scandals have come to light in the media. Companies such as Enron, WorldCom, and AIG have experienced significant scandals due to unethical and sometimes illegal accounting practices. It is important for companies to prepare financial statements correctly and legally to avoid punishment, but also to have an honest relationship with customers and stockholders. Accurate accounting plays a vital role in business. Throughout this tutorial, we will discuss the correct accounting practices and methods. Learn this and more during this lecture.
- Introduction to Financial Statements1:56There are multiple ways to communicate with users through financial statements. It is important to pick the correct statement in order to best communicate with the appropriate user. Learn this and more during this lecture.
- Business Activities1:35It’s also important to understand some of the key terms when it comes to business activities. All businesses and organizations participate in the three types of business activities: financing, investing, and operating. Financing is a critical part of the initial set up of a business. There are two ways organizations typically fund their business: borrowing money and issuing shares of stock. Groups that the business owes money to are called creditors. Amounts owed to creditors are called liabilities. Different types of liabilities have different names, depending on their source. Some examples include notes payable, bonds payable, and common stock. Learn this and more during this lecture.
- GAAP1:29Each country has its own set of rules and practices when it comes to accounting. Companies in the United States follow a set of accounting standards called “GAAP”. GAAP stands for generally accepted accounting principles. GAAP uses two different measurement principles. The first is the cost principle. This requires companies to record assets at their cost. This stays true for the asset over time. For example, if a piece of land was purchased for $60,000 but over time the value increased to $70,000, the cost would still be $60,000. Learn this and more during this lecture.
- Sarbanes-Oxley Act1:16The Sarbanes-Oxley Act (also known as SOX) was passed by Congress in 2002 to try to reduce unethical corporate behavior. This act established accounting regulations and industry norms that most large businesses follow. Also as a result of this act, top management must certify the accuracy of financial information. Also, this act made penalties for fraud much more severe. Learn this and more during this lecture.
- Accrual vs. Cash Basis of Accounting2:01There are two types of accounting: accrual and cash. Accrual basis accounting means that companies record transactions in the periods in which the events occur, even if no cash was exchanged. In this system, companies record revenues when earned, and recognize expenses when incurred. Learn this and more during this lecture.
- Balance Sheets3:05In this section, we will discuss the contents of financial statements in a broad sense. Further information on each component will be discussed in later sections. Learn this and more during this lecture.
- Accounting Transactions0:42Accounting transactions are events that require recording in financial statements. If an economic event causes a change in assets, liabilities, or stockholder’s equity, then the accounting transaction must be recorded in a financial statement. Learn this and more during this lecture.
- Debits and Credits1:44In accounting, T-accounts are used to track economic activity within the business. A T-account is an individual record of an increase/decrease in an asset, liability, stockholder’s equity, revenue, or expense. Each T-account consists of three parts: the title of the account, a debit, and a credit. A debit is the left side of the account. A credit is the right side of the account. Learn this and more during this lecture.
- T-Accounts and Journal Entries2:58In the last lecture, we learned that T-accounts are important to track economic events within a business. We also learned that those accounts are the fundamental building blocks of accounting. However, transactions are typically recorded in chronological order in journals before they are transferred into accounts (and then ultimately financial statements). This act is called journalizing. The entire record of journal entries is called a general journal, or general ledger. Learn this and more during this lecture.
- The Balance Sheet1:01After journal entries are made, the financial information can then be presented into different financial statements. The balance sheet shows lists of transactions, grouped together by similar assets and similar liabilities. Just like the accounting equation and journal entries, the sheet must balance (meaning assets will equal liabilities + stockholder’s equity). Learn this and more during this lecture.
- Income Statements1:01The income statement shows a company’s successes and failures stemming from operating procedures over a period of time. This will also show if the company’s operations are profitable. Learn this and more during this lecture.
- Retained Earnings Statement1:00Recall that retained earnings is the net income retained in a company for future use. The retained earnings statement shows the amounts and changes in retained earnings during an accounting period (picked by the user). This statement is typically used to evaluate and understand dividend practices. Investors look to these statements to make decisions on which company to invest in. Learn this and more during this lecture.
- Statement of Cash Flows1:38The statement of cash flows provides financial information about the cash receipts and cash payments of a business during an accounting period (picked by the user). The primary interested users in these statements are investors, creditors, and other interested in the company’s cash position. The statement will report the cash effects of a company’s operating, investing and financing activities. Cash is one of the most important resources in a company. Learn this and more during this lecture.
- Introduction to Assets2:21In this section, we will further explore assets owned by a business, how to record economic events dealing with assets, and how these events affect a business. Learn this and more during this lecture.
- Current Assets1:59Current assets are cash and other resources that the company expects to use up within one year, or the operating cycle. Examples include office supplies, yearly insurance, and inventory. Learn this and more during this lecture.
- Property, Plant, and Equipment1:51Most assets that have relatively long useful lives can be broken down into three categories: property, plant, and equipment. This category of assets includes land, buildings, vehicles, furniture, etc. Most of these items are subject to depreciation. Learn this and more during this lecture.
- Long-Term Investments2:06Long term investments are investments that will be held for longer than a year. Learn this and more during this lecture.
- Intangible Assets0:54Intangible Assets are assets that are valuable to the company, but have no physical state. Examples include customer lists, brands, trademarks, rights, and goodwill. Sometimes these assets are recorded specifically, other times companies list them under “Other Assets”. Learn this and more during this lecture.
- Depreciation2:28Most companies own assets that have long useful lives. These can take the form of buildings, equipment, and vehicles. As explained in previous lessons, companies must follow the cost principle of GAAP (recording assets at cost). In order to allocate the cost of using the asset over a length of time, companies use depreciation. Depreciation is the process of allocating the cost of an asset to expense over its useful life. However, depreciation in terms of accounting, does not show the actual value of the asset. This is simply a way to allocate its cost. Learn this and more during this lecture.
- Introduction to Liabilities2:16In this section, we will further explore liabilities. Recall that liabilities are creditors’ claims on total assets, or existing debts and obligations a company has. Companies must pay these obligations and debts back at some point in the future, using assets or services. Just like assets, some liabilities are current and some are long-term. In this chapter, we will discuss how to classify a liability, which account to post it to, and how to create journal entries using liabilities and real world examples. Learn this and more during this lecture.
- Current Liabilities1:38Current liabilities are debts that a company expects to pay back within one year or the operating cycle and that the company expects to pay from existing current assets, or through the creation of other current liabilities. Debts that do not meet these two criteria are considered long-term liabilities. Learn this and more during this lecture.
- Notes Payable0:56Notes payable are written records of obligations a company has to its lenders. Most of these notes are interest bearing. Also, those notes payable that are due for payment within one year of the balance sheet date are classified as current liabilities. Learn this and more during this lecture.
- Sales Tax Payable2:37Most types of retail products are subject to sales tax. When a company sells a product, they must collect a percentage of the revenue and then remit it to the appropriate government. For example, if a company sells a product for $100 and the sales tax rate is %6, the company will collect an additional $6 from the customer and then transmit the $6 to the state government. Learn this and more during this lecture.
- Unearned Revenue2:16Some companies receive advances in payments before actual services are performed. In accounting, this is called unearned revenue. Unearned revenue must be reported in order for companies to comply with GAAP principles. Learn this and more during this lecture.
- Payroll Payable2:05Payroll payable is the amount of payroll that a company pays its employees during a given period. Some periods can be weekly, biweekly, or monthly. Because of the different taxes and withholding options that come with payroll, accounting must be done carefully. Learn this and more during this lecture.
- Long-Term Liabilities2:03Long-term liabilities are debts that a company expects to pay off more than a year in the future. Long-term liabilities can take the form of bonds, bank loans, and mortgages. Bank loans are the most common. Long-term liabilities can be classified as Notes Payable, Lease Liabilities, and Bonds. Learn this and more during this lecture.
- The Trial Balance2:06A trial balance lists accounts and the balances associated with those accounts at a given time. A company usually will prepare a trial balance at the end of a specific accounting period. Similar to a journal entry, debits are listed on the left side and credits on the right. The trial balance proves the mathematical equality of these debits and credits. A trial balance may uncover errors in journalizing and posting. Also, a trial balance is useful in the preparation of financial statements. Learn this and more during this lecture.
- Adjusting Entries2:00Sometimes, when businesses record journal entries, the information made need to be adjusted later on. Using adjusting entries ensures that the revenue recognition and expense recognition principles of GAAP are followed. The revenue recognition principle requires that companies recognize revenue in the accounting period in which it was earned. The expense recognition principle means that expenses must be matched with revenues. Learn this and more during this lecture.
- Closing the Books2:33Most of the accounts we have looked at throughout this tutorial have been considered temporary accounts. Temporary accounts are revenue, expense, and dividend accounts who balances will be later transferred into a financial statement- specifically, the retained earnings statement. (We will discuss dividends in future lessons.) This is because these accounts are used to record information for a specific accounting period. Learn this and more during this lecture.
- Sales Revenues, Gross Profits, and Operating Activities2:43Other important financial information includes sales revenues and gross profits. We will now discuss these terms in detail. Learn this and more during this lecture.
- Classifying Inventory1:09The way a company classifies its inventory is critical to the accounting process. How a company classifies its inventory depends on the type of company. In a merchandising company, inventory can be made up of many different items. For example, a grocery store may have thousands of different types of products. Because of this, it makes more sense for a merchandising company to classify all inventory as merchandise inventory. Learn this and more during this lecture.
- Determining Inventory Quantities2:08All companies need to determine their inventory amounts. Companies take physical inventory of all goods at the end of an accounting period. This is important to keep accurate accounting records and also to help eliminate waste and employee theft. This involves counting, weighing, and measuring each kind of inventory on hand. Because this is such an enormous task for large companies, most businesses take inventory when the company is closed or when business is slow. Learn this and more during this lecture.
- Cost of Goods Sold1:42Understanding cost of goods sold is important when accounting for inventory in a business. Cost of goods sold is the total cost of merchandise sold during the period. This expense is directly related to the revenue gained from the sale of the goods. For large companies, keeping track of the cost of each individual product is impractical. Instead, companies make assumptions called cash flow assumptions about the units of goods sold. There are three assumed cost flow methods: FIFO, LIFO, and Average-cost. These cash flow methods allow companies to account for inventory and inventory costs without having to measure each item individually. Learn this and more during this lecture.
- FIFO and LIFO3:59When companies have large amounts of inventory, it’s important for them to account for it properly. FIFO and LIFO are systems of accounting for the value of inventory within a company. FIFO stands for First In, First Out. LIFO stands for Last In, First Out. It is important that a company understands which system is best for their company and also how to correctly use each system. Incorrect use of a system can severely hurt the company or make it difficult for users to understand the inventory accounting and inventory costs. Learn this and more during this lecture.
- Average Cost Method1:34The average-cost method allocates the cost of goods available for sale on the basis of the weighted-average unit cost that a company incurs. This method is simpler than FIFO and LIFO. The equation for finding the average cost is: Cost of goods available for sale / Total Units Available for Sale = Weighted Average Unit Cost. Learn this and more during this lecture.
- Corporate Form of Organization1:20In this section, we will discuss stockholder’s equity. However, it’s important to first understand the differences between a small business or individually owned business and a C corporation. This is because finances are treated differently between the two. Also, it’s important to note that some of the concepts in this chapter only apply to large businesses and corporations. Learn this and more during this lecture.
- Stock Issue Considerations1:48Understanding stock and its value to a corporation is important when it comes to accounting and accounting for stockholder’s equity. In this section, we will discuss a few terms related to stock within an organization and how they affect financial statements. Learn this and more during this lecture.
- Accounting for Treasury Stock1:21Treasury Stock is a corporation’s own stock that has been reacquired by the corporation. Most corporations will hold treasury stock for future use. Learn this and more during this lecture.
- Preferred Stock1:39Besides common stock, companies may issue another class of stock, called preferred stock. Preferred stock has contractual provisions that give it priority over common stock. Preferred stock may have either a par value or a no-par value. Typically, preferred stockholders have a priority in relation to dividends and assets in the event of a liquidation, however they may not have voting rights. Learn this and more during this lecture.
- Dividends and Retained Earnings1:27Dividends are distributions by corporations to its stockholders. Dividends can take the form of cash, property, promissory notes, or stock. In financial statements, dividends are generally reported quarterly as a dollar amount per share. A cash dividend is a distribution of cash to stockholders that is proportional to ownership. Learn this and more during this lecture.
- Introduction to Managerial Accounting2:17While financial accounting focuses on presenting information for a variety of users, managerial accounting focuses on providing information for managers (and other internal users) to make decisions. In this chapter, we will focus on the basics of managerial accounting and how to use financial information to make important business decisions. Learn this and more during this lecture.
- Code of Ethics for Managerial Accounting1:49As discussed in a previous section, ethics in accounting is very important for businesses. It is also important in managerial accounting. This goes further than simply filling out correct, ethical financial statements. Managers must also create proper incentives for the company and set high ethical standards for all employees. Learn this and more during this lecture.
- Managerial Cost Concepts2:36In order for managers to plan, direct, and control effectively, they need good financial information to make informed decisions. One of the most important concepts is understanding cost. Learn this and more during this lecture.
- Other Managerial Concepts2:25There are other managerial concepts that are important when it comes to managerial accounting even though they do not deal directly with financial data. They are: the value chain, changing technologies, and the theory of constraints. Learn this and more during this lecture.
- Cost Accounting Systems1:46Cost accounting involves the measuring, recording, and reporting of product costs. This is important for managers because controlling costs is essential to a business’ survival. If a manager knows where costs are coming from, they can more adequately control them. A cost accounting system consists of accounts for the various manufacturing costs. There are two basic types of cost accounting systems: the job order cost system and the process cost system. The purpose of these systems is to provide unit cost information for product pricing, inventory valuation, and financial statement presentation. Learn this and more during this lecture.
- Job Order Cost Flow0:58The flow of costs in job order costing parallels the physical flow of the materials as they are converted into finished goods. Companies assign manufacturing costs to the Work in Process Inventory account. When a job is completed, the cost is transferred to the Finished Goods Inventory. Learn this and more during this lecture.
- Reporting Job Order Costing1:34In this section, we will discuss how to report in a journal entry each type of cost in job order costing. The costs include raw materials, factory labor, and manufacturing overhead. Learn this and more during this lecture.
- Process Cost Systems1:02Companies can use the process cost system to account for costs for similar products that are mass-produced in a continuous fashion. Examples include companies that manufacture computer products, soft drinks, and chemicals. This process involved taking the costs from direct materials, direct labor, and manufacturing overhead, the different works in process, and inventory to determine the cost of goods sold. This process is outlined with this chart. Learn this and more during this lecture.
- Activity Based Costing1:35It’s important to understand the concept that products consume activities and activities consume resources. Companies always must be aware of this idea in order to allocate costs and ultimately control them. Learn this and more during this lecture.
Requirements
- None
Description
If you are new to small business accounting or need a refresher, this course is for you. From terminology to reading reports, small business accounting can sometimes be confusing. During this 3 hour Accounting video training course, our expert instructor will teach you about different types of accounts (asset, liability, equity, income and expense), payroll, financial statements and much more.
This accounting tutorial covers the same material as our classroom training and was designed to provide a solid foundation in accounting. We have incorporated years of classroom training experience and teaching techniques to develop an easy-to-use course that you can customize to meet your personal learning needs. Simply launch a video lesson or open one of the manuals and you’re on your way to mastering accounting.
Who this course is for:
- Anyone wanting to learn small business accounting.