- Identify how a balance sheet reflects the accounting equation.
- Name the account where debits are increases and credits are decreases.
- Define a journal.
- List the three things, in order, that you must address when making journal entries.
- Explain the function of financial statements that is most important for entrepreneurs.
- Assess the purpose of a trial balance.
Skill Level Beginner
- Hi, I'm Jim Stice. I'm a Professor of Accounting at Brigham Young University. This is my brother Kay. - I am also a Professor of Accounting at Brigham Young University. - We've been teaching accounting for a combined total of over 70 years. - In this course we'll introduce you to the bookkeeping process that underlies the production of a company's accounting data. Now these accounting data are ultimately used both within a company to make operating decisions and outside of companies to make investing and lending decisions. - [Jim] You're going to learn about the famous debit and credit system. - [Kay] You're going to see how the simple procedures of transaction analysis, journal entries, and posting can organize the data that come into businesses every day, from small businesses operated by individual entrepreneurs to huge multinational businesses with operations around the world. - Consider the information needs of a company such as McDonalds, launched by Ray Kroc back in 1954. - [Kay] Now the essence of McDonald's business seems simple. Revenues come from selling Big Macs, Happy Meals, Chicken McNuggets and the like. - [Jim] Operating costs include the costs of the raw materials to produce the food items, labor costs, building rentals, income taxes, and so forth. - But the magnitude of McDonald's operation makes compiling reliable information a challenge. Now think in terms of volume. With system wide sales averaging almost 300 million dollars a day. And geography, with locations in 120 countries throughout the world. - So, how are these millions of customers and supplier transactions summarized and eventually reported as useful information in the financial statements? - [Kay] Well, this transformation process is called the Accounting Cycle. That's the bookkeeping part of accounting. - Now, you may have heard of debits and credits and journal entries and trial balances. Well in this course, we're going to take the mystery out of these and other terms. - We will show you how transactions turn into financial statements. We'll 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. - Now, don't be nervous. We've designed this bookkeeping course to be self contained and we carefully explain any terminology that we use. - In short, this is an introductory course with no prior accounting knowledge necessary. - So, are you ready to go? Let's get started.