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Financial Accounting

Lesson 1: Accounting Standards and Regulation

  • PowerPoint – Lesson 1

  • Exercises – Lesson 1

  • Introduction to GAAP

  • Accounting Standard Setting Process

  • Financial Accounting Standards Board (FASB)

  • Emerging Issues Task Force (EITF)

  • Financial Accounting Foundation (FAF)

  • Accounting Standards Codification (ASC)

  • International Accounting Standards Board (IASB)

  • FASB vs. IASB

  • FASB Conceptual Framework

  • SEC Acts of 1933 and 1934

  • Sarbanes-Oxley Act (SOX)

  • Public Company Accounting Oversight Board (PCAOB)

  • Board of Directors

  • Audit Committee

  • The 4 Types of Audit Opinions

  • Going Concern

  • Internal Auditor vs External Auditor

  • The Role of an Analyst

  • Sell-side Analyst vs Buy-side Analyst

Lesson 2: Overview of the Financial Statements

  • PowerPoint – Lesson 2

  • Exercises – Lesson 2

  • The Basic Accounting Equation

  • Assets

  • Liabilities

  • Stockholders’ Equity

  • Introduction to the Balance Sheet

  • Example of a Balance Sheet

  • Income Statement Overview: Part 1

  • Revenue

  • Expenses

  • Gains and Losses

  • Earnings

  • Sales vs. Profit

  • Single-step Income Statement

  • Connection between BS & IS

  • How the Income Statement and Balance Sheet are Connected

  • Cash Flow from Operating Activities vs Net Income

  • Retained Earnings

  • Retained Earnings vs. Net Income

  • Retained Earnings Example

  • Things that affect Retained Earnings

  • T-Account for Retained Earnings

  • Retained Earnings Formula

  • Restrictions of Retained Earnings

  • The Statement of Retained Earnings

  • The Statement of Stockholders’ Equity

Lesson 3: Accounting Recordkeeping

  • PowerPoint – Lesson 3

  • Exercises – Lesson 3

  • The Accounting Cycle

  • Debits and Credits

  • Double Entry Accounting

  • Journal Entry Format

  • Recording a Journal Entry

  • Practice with Journal Entries

  • Journal Entry for Goods Sold on Credit

  • Journal Entry to Record a Sale

  • Journal Entry for Accounts Payable

  • Journal Entry for Supplies

  • T accounts

  • Preparing a Trial Balance

Lesson 4: Accrual Accounting

  • PowerPoint – Lesson 4

  • Exercises – Lesson 4

  • Cash vs Accrual Accounting

  • 5 Steps of Revenue Recognition (ASU 2014-09)

  • Introduction to Adjusting Journal Entries (AJE’s)

  • Prepayment AJE’s

  • Accrual AJE’s

  • Nominal vs. Real Accounts

  • Closing Entries

  • Post-closing Trial Balance

  • Reversing a Journal Entry

Lesson 5: Balance Sheet

  • PowerPoint – Lesson 5

  • Exercises – Lesson 5

  • Current Assets

  • Short-term Investments

  • Noncurrent Assets

  • Long-term Investments

  • Current Liabilities

  • Long-term Liabilities

  • Classified Balance Sheet

  • Classified Balance Sheet Example

  • Comparative Balance Sheet

  • Prepaid Expenses

  • Prepaid Rent

  • Prepaid Insurance

  • Journal Entry for Prepaid Insurance

  • Usefulness of the Balance Sheet

  • Limitations of the Balance Sheet

  • Balance Sheet vs. Income Statement

  • Can Stockholders’ Equity be Negative?

Lesson 6: Income Statement

  • PowerPoint – Lesson 6

  • Exercises – Lesson 6

  • Gross Sales vs. Net Sales

  • Sales Discounts

  • Sales Returns and Allowances

  • Journal Entry for Sales Returns

  • Irregular Items

  • Discontinued Operations

  • Intraperiod Tax Allocation

  • Restructuring Charges

  • Multi-step Income Statement, part 1

  • Multi-step Income Statement, part 2

  • Multi-step Income Statement Example

  • Income Statement Overview: Part 2

  • Purpose of the Income Statement

  • Limitations of the Income Statement

  • Calculating Gross Profit (aka Gross Margin)

  • Comprehensive Income

  • Other Comprehensive Income (OCI)

  • Types of OCI

  • The Statement of Other Comprehensive Income

  • Accumulated OCI

  • Earnings Quality

  • Earnings Management

Lesson 7: Cash and Cash Equivalents

  • PowerPoint – Lesson 7

  • Exercises – Lesson 7

  • Cash and Cash Equivalents

  • How to Account for Petty Cash

Lesson 8: Receivables

  • PowerPoint – Lesson 8

  • Exercises – Lesson 8

  • Receivables

  • Accounts Receivable

  • Percentage-of-Sales Method for Estimating Bad Debts

  • Journal Entry for a Bad Debt Recovery

  • Collecting Accounts Receivable Already Written Off

  • Aging Method for Estimating Uncollectible Accounts

  • Current Expected Credit Loss

  • Why Receivables Might Grow Faster than Sales

Lesson 9: Inventory

  • PowerPoint – Lesson 9

  • Exercises – Lesson 9

  • Inventory Defined

  • Perpetual Inventory

  • Periodic Inventory

  • Periodic vs Perpetual Inventory

  • Average Cost Inventory Method

  • Average Cost Periodic Inventory Method

  • Average Cost Perpetual Inventory Method

  • FIFO Inventory Method

  • FIFO Periodic Inventory Method

  • FIFO Perpetual Inventory Method

  • LIFO Inventory Method

  • LIFO Periodic Inventory Method

  • LIFO Perpetual Inventory Method

  • LIFO Liquidation

  • Dollar Value LIFO

  • LIFO Reserve (LIFO Effect)

  • Advantages of LIFO

  • Disadvantages of LIFO

  • FIFO vs LIFO vs Weighted Average Cost

  • Retail Inventory Method

  • Calculating Net Realizable Value of Inventory

  • Lower of Cost or Market Rule for Valuing Inventory

  • Lower of Cost or Market Rule Example

  • Lower of Cost or Net Realizable Value

  • Inventory Writedown Journal Entry

  • Inventory Writedown Allowance Method

  • Recording Inventory at Net Realizable Value

  • Inventory: IFRS vs. U.S. GAAP

Lesson 10: Property, Plant, and Equipment

  • PowerPoint – Lesson 10

  • Exercises – Lesson 10

  • Property, Plant, and Equipment Defined

  • Capital Expenditures vs Operating Costs

  • Capitalization of PP&E Acquisition Costs

  • Capitalization of PP&E Subsequent Costs

  • Depreciation

  • Straight Line Depreciation Method

  • Double Declining Balance Depreciation Method

  • Straight-line vs Double-declining Balance Method

  • Sum of the Years’ Digits

  • Units of Production Depreciation Method

  • Journal Entry for Depreciation

  • Depreciation Expense vs. Accumulated Depreciation

  • Depreciation Change in Useful Life

  • Fixed Asset Disposal

  • Fixed Asset Retirement

  • Impairment of PP&E

  • Nonmonetary Exchange

  • Nonmonetary Exchange that Lacks Commercial Substance

  • Nonmonetary Exchange with a Loss

  • Depletion

Lesson 11: Intangible Assets

  • PowerPoint – Lesson 11

  • Exercises – Lesson 11

  • Intangible Assets

  • Goodwill in Accounting, Defined and Explained

  • How to Calculate Goodwill for Amazon’s Acquisition of Ring

  • Goodwill Impairment Single Step Test ASU 2017-04

  • Accounting for Cryptocurrency

Lesson 12: Investments

  • PowerPoint – Lesson 12

  • Exercises – Lesson 12

  • Accounting for Investments (Equity and Debt Securities)

  • Amortized Cost of a Held to Maturity Investment

  • Held-to-Maturity Debt Securities

  • Debt Securities- Trading

  • Available-for-Sale Debt Securities

  • Unrealized Gains and Losses on Available for Sale Debt Investments

  • Selling an Available for Sale Investment

  • Impairment of Available-for-Sale Securities

  • Investments in Equity Securities

  • Equity Investments at Cost: The Practicability Exception

  • Fair Value Method for Equity Investments

  • Fair Value Hierarchy (Level 1, Level 2, Level 3)

  • The Fair Value Option for Financial Instruments

  • Equity Method of Accounting for Investments

  • Equity Method vs. Fair Value Method

Lesson 13: Current Liabilities

  • PowerPoint – Lesson 13

  • Exercises – Lesson 13

  • Accounts Payable

  • What is the Difference between Receivables and Payables?

  • Unearned Revenue

  • Contingent Liabilities

  • How to Record Salary Payable

  • Accounting for Warranty Expense

  • Warranty Liability – Expected Cash Flow Approach

  • Accounting for Gift Cards

  • Accounting for Premiums and Coupons

  • Asset Retirement Obligation

  • The Operating Cycle

  • Cash Conversion Cycle

  • Payroll Accounting

Lesson 14: Long-term Liabilities

  • PowerPoint – Lesson 14

  • Exercises – Lesson 14

  • Types of Bonds

  • Debt Covenants

  • Calculating the Issue Price of a Bond (Annual Interest Payments)

  • Calculating the Issue Price of a Bond (Semiannual Interest Payments)

  • Calculating the Issue Price of a Bond (Quarterly Interest Payments)

  • Determining the Carrying Value of Bonds

  • Bonds Issued at Par

  • Amortizing a Bond Discount

  • Amortizing a Bond Premium

  • Journal Entries for Note Issued at Face Value

  • Zero Interest Bearing Note Example

  • Bonds Issued between Interest Dates

  • Early Retirement of Bonds

  • Fair Value Option for Bonds Payable

  • How to Account for an Installment Note

Lesson 15: Stockholders’ Equity

  • PowerPoint – Lesson 15

  • Exercises – Lesson 15

  • Capital Stock (Common Stock and Preferred Stock)

  • Additional Paid in Capital

  • Common Stock

  • Common Stock vs. Additional Paid-in Capital

  • No-par vs Par Stock

  • Preferred Stock

  • Treasury Stock

  • Journal Entry for Stock Issuance

  • Explaining Dividends

  • Liquidating Dividend

  • Journal Entry for Dividends

  • How to Calculate the Dividend Yield

  • Stock Split

  • Stock Dividend vs Stock Split

  • Why Firms Buy Back their own Stock

  • How to Retire Treasury Shares

  • How to Account for Stock Retirement

  • Earnings per Share (EPS) Explained

  • How to Calculate EPS

  • How to Calculate EPS for Amazon

  • Basic Earnings Per Share Calculation Example

  • How to Use Earnings per Share

  • Earnings per Share vs Net Income

  • How Stock Repurchases Affect Earnings per Share

  • Market Capitalization

Lesson 16: Statement of Cash Flows

  • PowerPoint – Lesson 16

  • Exercises – Lesson 16

  • Purpose of the Statement of Cash Flows (SCF)

  • Indirect Method of SCF

  • Cash Flow from Operations

  • Cash Flow from Investing

  • Cash Flow from Financing Activities

  • SCF: Disposal of Fixed Assets

  • SCF: How to Calculate Dividends

  • SCF: Accounting for Equity Method Investment

  • Statement of Cash Flows Formula

  • Where to find CapEx on the Statement of Cash Flows

  • Direct vs. Indirect Method

Appendix A: Time Value of Money

  • PowerPoint – Appendix A

  • Time Value of Money

  • Explaining Effective Annual Rate of Interest

  • Calculating Effective Annual Rate of Interest

  • Future Value of a Single Amount

  • Present Value of a Single Cash Flow

  • Future Value of an Annuity

  • Present Value of an Annuity

  • Future Value of an Annuity Due

  • Future Value of a Growing Annuity

  • Present Value of a Perpetuity

  • Present Value of a Growing Perpetuity

Appendix B: Financial Ratios

  • ROA (Return on Assets)

  • Net Profit Margin

  • Asset Turnover

  • Decomposing ROA (Return on Assets)

  • Gross Profit Margin Ratio

  • Current Ratio

  • Quick Ratio (Acid Test Ratio)

  • Current Cash Debt Coverage Ratio

  • Cash Debt Coverage Ratio

  • Net Working Capital

  • Inventory Turnover

  • Debt to Equity Ratio

  • Dividend Payout Ratio

  • Market to Book Ratio

  • How to Determine Price to Book Ratio

  • Book to Market Ratio

  • Price to Book Ratio vs Book to Market Ratio

  • Altman Z Score

  • Accounts Receivable Turnover Ratio

  • Days Sales Outstanding

  • Accounts Payable Turnover Ratio

  • Days Payable Outstanding

  • Days to Sell Inventory

  • Price-Earnings (P/E) Ratio

  • Book Value per Share

  • Tangible Book Value per Share

  • Cash Flow to Capital Expenditures Ratio

  • Operating Cash Flow Ratio

  • Fixed Asset Turnover Ratio

  • Debt Ratio

  • Cash Ratio

  • Times Interest Earned (Interest Coverage Ratio)

  • The Equity Multiplier

  • How to Calculate Sales Growth

Appendix C: Direct Method for Statement of Cash Flows

  • Direct Method of SCF

  • Cash Received from Customers

  • Cash Paid to Suppliers

  • Cash Paid to Employees

  • Cash Paid for Interest

  • Cash Paid for Income Taxes

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