Accounting in 60 Minutes
- The Accounting Equation (One you can understand!)
- Balance Sheets
- Income Statements
- Debits and Credits (And how to know which is which!)
- Why Profit Does Not Equal Cash!
What = Who
The accounting equation is the basis of accounting. However, the formal equation can be confusing. In this lecture you will learn the simplified equation (What=Who) and how it is the foundation of the accounting profession. By the end of the lecture you will understand the more formal accounting equation.
Debits = Credits
Debits and credits give accounting students fits. In this lecture you will get a clear understanding of what is a debit and what is a credit. You will know by the end of the lecture when to debit and when to credit. You will find that this is a painless activity!
The Trial Balance
A trial balance is just that: we try to balance. In this lecture we will set up a trial balance and see why it is an important tool for accountants. And you will understand why it can save us a lot of time before we prepare our financial statements.
In this lecture we prepare our first financial statement! It is the Balance Sheet. You might have seen balance sheets before. You will see how they are prepared and what they mean. Your knowledge from the previous lectures will give you the skill to understand the details on this statement.
In this lecture you will learn the connection between net income and the balance sheet. By the end of the lecture you will see how income (and expense) affects the balance sheet.
Expenses and Timing
This lecture will explain why cash can go out of our business before we make an expense, when we make an expense or after we make an expense. Again you will gain insights to why profit does not equal cash. This information along with what you learned in the previous lecture will demonstrate how important it is for a business to manage cash flow.