May 2013 Accounting Boot camp

YOUR INSTRUCTORS Don Clancy Allison Collins Introduction to Accounting Boot Camp

Why are we here? Have not had accounting before Do not have to take undergraduate fundamentals course Meet prerequisite requirement of MBA Introduction to Accounting Boot Camp

Purpose of the boot camp Provide an accounting background to those with limited experience in accounting Nothing Fancy ! Introduction to Accounting Boot Camp

Course objectives Understand the role of accounting and the process of forming standards for accounting. Use essential accounting terminology. Understand the requirements and application of transaction analysis to selected transactions. Understand the accounting cycle (the process by which transactions become represented in financial statements). Understand the format and purpose of primary financial statements: balance sheet, income statement, stockholders’ equity, and cash flow statement. Introduction to Accounting Boot Camp

Course objectives (continued) Understand the primary accounts in a balance sheet. Find the time value of money. Recognize the differences between accrual-basis and cash basis accounting. Introduction to Accounting Boot Camp

Boot camp content Concepts and Standard Formation Financial Statements Transaction Analysis Accounting Cycle Primary Accounts Time Value of Money Cash Flow Introduction to Accounting Boot Camp

Rules differ from country to country Who makes the rules? 1A Standard formation Accounting has rules! Rules differ from country to country Who makes the rules? How do the rules become official (promulgated)? Introduction to Accounting Boot Camp

1B Primary financial statements There are four financial statements: Balance Sheet – What do we own? What do we owe? What is left over for the owners? Income Statement – Were we successful? Statement of Cash Flow – Where did money come from? Where did money go? Stockholders’ Equity Statement – How did the owners’ investment change? Introduction to Accounting Boot Camp

Transactions → Adjustments → Closing → Prepare Statements 2 Accounting cycle Accounting Cycle – repetitive process of generating financial information and statements: Transactions → Adjustments → Closing → Prepare Statements Introduction to Accounting Boot Camp

3 Primary accounts What balance sheet accounts are used by most firms? Receivables – money owed to us Inventory – things we will sell Fixed Assets – property, plant, and equipment Payables and Debt – money we owe to others Stockholders’ Equity – money invested by owners plus reinvested earnings Introduction to Accounting Boot Camp

4 Time value of money Financial position is affected by Accounting and the Fourth Dimension Financial position is affected by how much cash is received (paid), and when cash is received (paid) Would you rather have $1,000 now or $1,000 ten years from now? How does inflation and rate of return affect payments and receipt of money? Introduction to Accounting Boot Camp

5 Cash Flows Statement of Cash Flow How do increases and decreases in cash affect the company? Cash Flow Classifications Introduction to Accounting Boot Camp

Notes – handouts plus your summaries of class Boot camp resources Notes – handouts plus your summaries of class Introduction to Accounting Boot Camp

Attendance will be taken Final exam at the end—50 questions assessment Attendance will be taken Final exam at the end—50 questions Open—handouts and notes, so take great notes Introduction to Accounting Boot Camp