Accounting Foundations

Introduction

• The importance of accounting
• What you should know before watching this course

1. What Is Accounting?

• The four flavors of accounting
• Bookkeeping
• Financial accounting
• Managerial accounting
• Income taxes

2. Financial Accounting: Balance Sheet

• Who uses financial statements?
• The accounting equation
• Assets
• Liabilities
• Equity
• Balance sheet example: Walmart's assets
• Balance sheet example: Walmart's liabilities and equity
• Limitations of the balance sheet

3. Financial Accounting: Income Statement and Cash Flow Statement

• Differences between the balance sheet and the income statement
• Overview of the income statement
• Earnings per share
• Income statement example: Walmart's revenues
• Income statement example: Walmart's expenses
• Overview of the cash flow statement
• Cash flow example
• Summary of financial reporting

4. Using Financial Statements

• Introduction to financial statement analysis
• Comparing across time
• Comparing across companies
• Common size statements
• Common ratios: ROE & DuPont framework
• Common ratios: Current, debt, return on sales

5. Managerial Accounting: Costing and Budgeting

• DuPont: Introduction to managerial accounting
• A closer look at managerial accounting
• Product costing: Materials and labor
• Product costing: Overhead
• Budgets: Realistic benchmarks
• Budgets: Solving problems in advance

6. Managerial Accounting: Analysis and Evaluation

• Breakeven analysis: Computations
• Breakeven analysis: Interpretation and use
• Standards and variance analysis: Costs
• Performance evaluation example: Drilling contest
• Performance evaluation example: Stice Boys
• Performance evaluation: ESG overview
• Performance evaluation: ESG examples

7. Income Taxes: Tax Filing

• The history of income taxes
• Tax brackets
• Average and marginal tax rates
• Tax deductions and credits
• Capital gains vs. ordinary income

8. Income Taxes: Tax Planning

• Tesla and tax planning
• What is tax planning?
• Strategy 1: Shift income from one time period to another
• Strategy 2: Shift income from one pocket to another
• Strategy 3: Change the character of the income

Conclusion

• Using accounting information to your advantage