Principles I 65/35 (Lessons 1-13)
AIA Courseware Topics
13 half-hour videos
- Discuss the purpose and nature of accounting and how accountants work to produce and help various decision makers use financial accounting information.
- Identify the objectives of financial reporting, related key assumptions and principles, and the uses and limitations of financial accounting information.
- Identify and perform the steps in the accounting cycle beginning with recording daily transactions in the journal to the post-closing trial balance.
- Identify and discuss management issues related to merchandise inventory, short-term liquid assets, long-term operating assets, and a variety of liabilities.
- Prepare financial statements for service and merchandise businesses.
- Explain the nature of long-term operating assets, and account for their acquisition, depreciation, and disposal.
- Explain and account for revenue and capital expenditures related to long-term operating assets.
- Discuss the advantages and disadvantages of the partnership and corporate forms of ownership.
- The Dynamic World of Accounting - The purpose and nature of financial accounting and the role of the professional accountant are introduced. Business transactions, their connection to financial statements, and the uses of financial statements are also presented. These issues are related to large and small businesses.
- Business Transactions and Financial Reporting - The objectives of financial reporting, including basic assumptions and principles (GAAP), are discussed. The Conceptual Framework is introduced. The essential characteristics of business transactions and their recording using the accounting equation are covered. The flow of transactions to financial statements is introduced.
- Analyzing and Recording Transactions - Further analysis of business transactions is presented and double entry accounting is introduced. The connections between transactions, the recording process, and financial statements are emphasized as is the basic distinction between cash basis and accrual basis accounting. The time period assumption is introduced, as is evaluating financial position and performance.
- Year End: Adjusting the Accounts - Accrual and cash accounting are compared and contrasted. The goals and techniques of adjusting accounts and preparing adjusted financial statements are emphasized. The impact of adjusting entries on evaluating financial statements is discussed.
- Year End: Completing the Accounting Cycle - The goals and techniques of the closing process and its place in business and accounting cycles are discussed as are techniques for conducting a clean and efficient year end close and the means by which these goals may be thwarted. The form and uses of a classified balance sheet are introduced.
- Accounting for a Merchandise Business - The challenges of effectively managing and accounting for merchandise inventory are introduced. The income statement is used as the focus for recording transactions peculiar to a merchandise business. The closing process is briefly treated. Ways of measuring the effectiveness of inventory management are briefly introduced.
- Merchandise Inventory and Cost of Goods Sold - The nature and impact of merchandise inventory on a company's financial performance are discussed including the valuation of inventory using various cost flow methods. The effects of inventory errors are briefly treated. The rationale for choosing between cost and market value is briefly covered as is the use of estimates for valuing inventory.
- Accounting Information Systems - The principles of accounting system design are introduced. Computer based and manual accounting systems are briefly compared. The selection and impact of computer based accounting systems are discussed. General trends in integrated enterprise application information systems are identified.
- Internal Control and Cash - The goals, characteristics and techniques of internal control are presented. Cash controls, including reconciling bank accounts, are discussed and illustrated. The impact of Electronic Funds Transfer on cash control is reviewed.
- Short Term Liquid Assets Other Than Cash - Business and management issues related to short term liquid assets are discussed. Recording and reporting such assets is covered. This covers customer receivables including accounting for bad debt, notes receivable and short term marketable investments.
- Long Term Operating Assets - The nature and impact of long term operating assets (property, plant and equipment, natural resources, and intangible assets) on a company's financial performance are discussed. Accounting for acquisition cost, depreciation, operating and improvement expenditures, and disposal of long term operating assets is covered.
- Current and Long Term Liabilities - Recognition, recording and reporting of commonplace current liabilities, and contingent liabilities is illustrated. The distinction between current and long term liabilities is established. The use of future and present value computations is demonstrated. A company's use of credit is discussed.
- Partnership and Corporate Accounting - The nature and characteristics of partnership and corporate forms of ownership are investigated. Accounting for transactions directly affecting partner equity accounts is shown, as is the issuing of capital stock for corporations. Calculation of book value per share is demonstrated and discussed.