Learn the basics of bookkeeping and how financial statements are created from ledgers in this essential accounting skills course.
- Ray Kroc, a 51-year-old milkshake-machine distributor, first visited the McDonalds brothers' drive-in in 1954, because he wanted to know why a single hamburger stand needed 10 milkshake machines. Over 60 years later, the number of McDonald's locations had expanded to 35,000 as of the end of 2013. The essence of McDonald's business seems simple. Revenues come from selling Big Macs, Happy Meals, Chicken McNuggets and the like.
Operating costs include the cost of the raw materials to produce the food items, labor cost, building rentals, income taxes, and so forth. But the magnitude of McDonald's operation, in terms of volume, with sales averaging over $100 million a day, as well as geography, McDonald's has locations in 119 countries throughout the world, makes compiling this information a challenge. So how are millions of transactions summarized and eventually reported as useful information in the financial statements? This transformation process is called the Accounting Cycle, or the Bookkeeping part of accounting.
You may have heard of debits and credits and journal entries and trial balances. Well, in this course, we are going to take the mystery out of these and other terms. We will show you how transactions turn into financial statements. We will show you how accounting systems are designed to aggregate mountains of financial information and turn that information into something that can be used by decision makers. So let's get started.
- Reviewing financial statements
- Analyzing transactions
- Categorizing transactions
- Recording a cash acquisition
- Recording the sale of goods or services
- Posting journal entries to accounts