Self-Study in Financial Accounting

Overall Learning Objective

The broad objectives of the Financial Accounting Self Study manual are to provide the user with an understanding of:

  • The structure of the Balance Sheet, Income Statement and Cash Flow statements of a corporation.
  • Accounting principles that determine how and when transactions are recorded
  • The accounting process of preparing financial statements
  • The role of the auditor

Course content focuses on understanding these concepts from the perspective of a financial analyst.


The following outlines each unit’s topics:

The Role of Accounting

Learning Objectives: to understand the role of financial accounting in a market-oriented economy, including a discussion of:

  • The economic framework underlying the need for financial accounting.
  • The accounting framework underlying financial statements.


Basic Accounting Concepts

Learning Objectives: to understand the basic concepts underlying the accounting process and illustrate their application in preparing financial statements.

  • The relationship between resources and income.
  • The basic elements of accounting.
  • The fundamentals of the accounting process, including:
    • Recording transactions.
    • Making adjustments.
    • Summarizing accounts.
    • Preparing financial statements.


Accounting Procedures

Learning Objectives: to understand in more detail the accounting process and procedures underlying their application in order to provide a framework (and the tools) necessary to handle more complex analysis:

  • The accounting framework, including a discussion of:
    • The elements of accounting and the accounting cycle.
    • Accounting methods (cash basis and accrual basis of accounting).
  • Recording procedures.
  • Preparing financial statements:
    • The income statement.
    • The balance sheet.


Accounting for Costs

Learning Objectives: to understand the relationship between, and accounting for, costs and expenses:

  • The meaning and accounting for costs and expenses.
  • Accounting for costs of supporting activities:
    • Accounting for costs expensed immediately.
    • Accounting for prepaid expenses.
    • Accounting for fixed assets.
  • Accounting for inventory (sales organization).
  • Accounting for manufacturing costs.


Accounting for Revenues

Learning Objectives: to understand the relationship between, and the accounting for, cash receipts and revenues:

  • The identification and measurement of revenue.
  • Accounting for cash transactions.
  • Accounting for revenue recognized prior to receipt of cash:
    • Accounting for accrual of revenue.
    • Accounting for adjustments to revenue (sales discounts, sales re-turns and allowances, and uncollectible accounts).


Summary of the Accounting Process

Learning Objectives: to understand the concepts and procedures previously developed into the accounting cycle, illustrating the complete accounting process.

  • The logic underlying the accounting process.
  • The accounting cycle:
    • Recording accounting events.
    • Preparing financial statements.
  • The auditor's function and report.


Introduction to Cash Flow Statements

Learning Objectives: to understand simple cash flow statements (more complex cash flow statements are discussed subsequently in a classroom session):

  • The fundamentals of cash flow.
  • The cash flow statement:
    • Preparing the cash flow statement.
    • Introduction to analysis of cash flow statements.