Introductory Financial Accounting

What you'll learn

• Explain the purpose of accounting, its internal and external users, the difference between financial and managerial accounting, and the roles of the AcSB, IFRS, ASPE, securities regulators and CPA Canada.
• Apply the accounting equation and the expanded equation to analyse business transactions, and classify items as assets, liabilities, equity, revenues, expenses or dividends.
• Record transactions with debits and credits in a general journal, post them to ledger accounts, and design a simple chart of accounts.
• Prepare a trial balance, explain what it does and does not prove, locate common errors and record correcting entries that preserve the audit trail.
• Distinguish accrual from cash accounting and record adjusting entries for prepaid expenses, supplies and unearned revenues.
• Record adjusting entries for accrued revenues, accrued expenses and straight-line and declining-balance depreciation, and prepare an adjusted trial balance.
• Prepare an income statement, a statement of changes in equity and a classified balance sheet, record closing entries and prepare a post-closing trial balance.
• Record merchandising transactions under perpetual and periodic systems, including returns, discounts, freight and GST/HST with input tax credits, and prepare a multiple-step income statement.
• Apply specific identification, FIFO and weighted-average costing, apply the lower of cost and net realizable value rule, analyse inventory errors and estimate inventory, and explain why LIFO is prohibited under IFRS and ASPE.
• Describe internal control and the fraud triangle, apply controls to cash, prepare a bank reconciliation with the required entries, and account for a petty cash fund.
• Account for accounts and notes receivable, estimate expected credit losses with percentage-of-sales and aging methods, record write-offs and recoveries, and compute receivables turnover and days sales outstanding.
• Prepare a statement of cash flows by the indirect method, compute and interpret liquidity, activity, profitability and solvency ratios, and complete a full accounting cycle for a small business.