In this course we discuss each of the main financial statements, the income statement (P&L), the balance sheet, and the cash flow statement, describing what each one does, how they are utilized by companies in measuring financial performance, and how they relate to one another.
We then follow with a basic set of financial statements for a simple company, reviewing what we laid out up front about what the statements accomplish and how they interact. We finish by reviewing a set of financial statements from a publicly traded company to show that no matter how big the company, the fundamentals are the same.
This online self study program in the field of accounting serves as an overview for accounting and finance professionals who need to sharpen their fundamental understanding of the core financial statements and how they work together.
Course Series
This course is included in the following series:
11 CoursesBack to the Basics: Accounting Fundamentals
- Accounting Review: The Basics of Debits and Credits
- Transaction Analysis, T-Accounts, Debits and Credits, and Trial Balances
- Accounting Review: Overview of Financial Statements; P&L, Balance Sheet, and Cash Flow
- The Accounting Equation and Financial Statements
- Bank Reconciliations, Cash, and Internal Controls
- Accounts Receivable Training: Bad Debts
- Equipment and Depreciation
- Inventory Costing
- Purchase and Sale of Inventory
- The Adjusting Process
- The Closing Process
5 CoursesFinance for Non-Finance Professionals
- Accounting 101: How To Do Basic Accounting In One Hour
- Accounting Review: The Basics of Debits and Credits
- Accounting Review: Overview of Financial Statements; P&L, Balance Sheet, and Cash Flow
- Learn Finance Principles in 1 Hour
- Enterprise Risk Management 101
Learning Objectives
- Demonstrate what each financial statement does and how they are utilized by companies both large and small.
- Measure your company’s performance through the use of financial statements.
- Sharpen your understanding of how financial statements work together.
54 Reviews (213 ratings)
Prerequisites
No advanced preparation or prerequisites are required for this course.
Erik -
Your answer for the Quiz question about Assets is wrong. Assets are usually items that can generate cash flow in the future. Office supplies (not-for-resale) would not be an asset, but they are owned by the company.
I would re-think the question and/or answers.
Wayne-
Thanks for your feedback.
Assets have a broader definition than you are giving them - there are many assets that don't provide cash to a company in the future. In basic terms (as I describe in the course) assets are things a company owns. In more technical terms, I pull the following guidance from the FASB Statement of Concepts #6 (here's the link if you need help with insomnia: http://www.fasb.org/cs/BlobServer?blobkey=id&blobwhere=1175822102897&blobheader=application%2Fpdf&blobcol=urldata&blobtable=MungoBlobs)
The two paragraphs I provide here are a definition of assets and then further clarification. I hope this helps.
-Erik
Paragraph 25: Assets are probably future economic benefits obtained or controlled by a particular entity as a result of past transactions or events.
Paragraph 177: Most assets presently included in financial statements qualify as assets under the definition in paragraph 25 because they have future economic benefits. Cash, accounts and notes receivable, interest and dividends receivable, investments in securities of other entities, and
similar items so obviously qualify as assets that they need no further comment except to note that uncollectible receivables do not qualify as assets. Inventories of raw materials, supplies, partially completed product, finished goods, and merchandise likewise obviously fit the definition as do productive resources, such as property, plant, equipment, tools, furnishings, leasehold improvements, natural resource deposits, and patents. They are mentioned separately from cash, receivables, and investments only because they have commonly been described in accounting literature as "deferred costs" or occasionally as "deferred charges" to revenues.