August 2012

Introduction to Accounting Boot Camp 2 Allison Collins Don Clancy

 Have not had accounting before  Do not have to take undergraduate fundamentals course  Meet prerequisite requirement of MBA Introduction to Accounting Boot Camp 3

Provide an accounting background to those with limited experience in accounting Nothing Fancy ! 4 Introduction to Accounting Boot Camp

 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 and cash flow statement. . Introduction to Accounting Boot Camp 5

 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 6

1. Concepts and Standard Formation 2. Financial Statements 3. Transaction Analysis 4. Accounting Cycle 5. Primary Accounts 6. Time Value of Money 7. Cash Flow 7 Introduction to Accounting Boot Camp

 Accounting has rules!  Rules differ from country to country  Who makes the rules?  How do the rules become official (promulgated)? 8 Introduction to Accounting Boot Camp

There are three primary financial statements:  Balance Sheet  Balance Sheet – What do we own; what do we owe? Everything we have came from somewhere…  Income Statement  Income Statement – Were we successful?  Statement of Cash Flow  Statement of Cash Flow – Where did money come from? Where did money go? 9 Introduction to Accounting Boot Camp

AAAAccounting Cycle – repetitive process of generating financial information FFollows process of: Action → Reflection → Reaction IIn accounting terms: Transaction → Adjustment → Closing → Prepare Financial Statements 10 Introduction to Accounting Boot Camp

What balance sheet accounts are used by most firms?  Receivables  Receivables – money owed to us  Inventory  Inventory – things we will sell  Fixed Assets  Fixed Assets – property, plant, and equipment  Payables and Debt  Payables and Debt – money we owe to others 11 Introduction to Accounting Boot Camp

 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? 12 Introduction to Accounting Boot Camp Accounting and the Fourth Dimension

 Statement of Cash Flow  How do increases and decreases in cash affect the company?  Cash Flow Classifications Introduction to Accounting Boot Camp 13

 Readings  Readings – in the syllabus  Notes  Notes – handouts plus your summaries of class 14 Introduction to Accounting Boot Camp

 Take home assignments  Attendance will be taken  Final exam at the end—50 questions  Open—handouts and notes, so take great notes Introduction to Accounting Boot Camp 15