How To Prepare Financial Statements

Learning Objectives

• To state the basic accounting equation and explain how it relates to the financial statements.
  
• To apply the basic accounting equation to transactions that lead to a simple balance sheet.
• To apply the basic accounting equation to transactions that lead to a complete set of financial statements.
• To describe the structure and role of journal entries and ledgers.
• To discuss the use of journal entries and ledger accounts to prepare a simple balance sheet.
• To describe the use of journal entries and ledgers accounts to prepare a complete set of financial statements.
• To analyze how closing entries transition the financial statements from one period to the next.
• To define contra accounts and the role it plays in the financial statements.
• To define treasury stock and describe where it can be found on the financial statements.
• To demonstrate how the sale of non-inventory assets affects the financial statements.
• To discuss and illustrate the difference between the accrual basis and cash basis of accounting.
• To demonstrate using several examples how net income on the income statement can be reconciled with net cash from operating activities on the statement of cash flows.

Course Description

Financial statements are written records that convey the business activities and the financial performance of a company. Financial statements include:

• Balance sheet
• Income statement
• Cash flow statement

The financial statements are used by investors, market analysts, and creditors to evaluate a company's financial health and earnings potential. This CPE course covers the basics of financial reporting and analysis. This continuing education course demonstrates the process of preparing a complete set of financial statements, including discussions of the basic accounting equation, journal entries, ledgers, and contra accounts (e.g., accumulated depreciation and treasury stock). The last two videos address the differences between accruals and cash flows, and the items that reconcile net income on the income statement with net cash from operating activities in the operating section of the statement of cash flow.             

Designed for Accountants in public practice and industry who need to gain an understanding of the basic financial statements, the Accounting CPE course features the following:

• Form and style considerations (standardization and presentation considerations)
• A detailed review of classification, measurement, and presentation issues specific to accounts in each of the basic financial statements
• Issues associated with the presentation of supplementary information

Overview

• Basic Accounting Equation

  1 mins
• Preparing Financial Statements Using Journal Entries & Ledger

  33 mins
• Using Journal entries to prepare financial statements

  52 mins
• Closing Process

  71 mins
• Contra Accounts on the Balance Sheet

  80 mins
• Accrual and Cash Differences: An Introduction

  99 mins