VL 01 · Mi, 21. Okt. · 36 Folien
Fundamentals of financial accounting (part 1)
Starts with the origins of double-entry bookkeeping (Pacioli, emergence with markets) and defines financial accounting as information for external users. Accounting serves two purposes: valuation (relevance, assessing the future) and contracting (reliability, e.g. compensation, debt covenants, earnouts). The three core statements are introduced – balance sheet (stock), income statement and cash flow statement (flows) – plus how they link. Debit/credit mechanics are practised on the Mary's Law Office case, which the case study extends to accrual bookings (receivables, payables, prepaid expense, unearned revenue).
+ Case Study 1 – Mary's Law Office
Purposes of financial accounting: valuation vs. contractingFinancial statements: balance sheet, income statement, cash flow statementDouble-entry bookkeeping: debit/credit and journal entriesAccrual accounting and the matching principle