Accounting Foundations: Bookkeeping

Introduction

• Introduction to bookkeeping
• The language of business
• How can we collect all this information?
• What you should know

1. Review of the Financial Statements

• Introducing financial statements
• The balance sheet
• The income statement
• The statement of cash flows

2. Fours Steps in the Bookkeeping Process

• The importance of routine bookkeeping
• Analyzing transactions
• The accounting equation
• Using accounts to categorize transactions
• Debits and credits
• Examples of accounts to categorize transactions
• Including revenues, expenses, and dividends
• Words of caution

3. How Transactions Affect the Accounting Equation

• Everything is recorded with debits and credits
• How do we record the effect of a transaction?
• Obtaining financing and buying equipment
• Buying supplies and inventory
• Providing services
• Selling inventory and providing services
• Incurring additional expenses
• Paying interest and dividends
• A note on journal entries

4. The General Ledger

• The accuracy of debits and credits in the days of real ‘books’
• Posting journal entries to accounts

5. Illustration of the First Three Steps in the Accounting Cycle

• Strangers and the power of financial statements
• Analyzing transactions
• Computing account balances
• The financial statements

Conclusion

• Who uses financial statements?
• The role of computers
• Where we have been and what is next