Product Description
This tutorial has been written for financial professionals who would like to obtain a better understanding of accounting. While most financial professionals have taken one or more accounting courses at some point in their careers, they frequently do not have a solid understanding of how various accounting transactions impact financial statements. They tend to look at the statements themselves as static, stand-alone chronicles of what has transpired within a company, rather than as dynamic, interrelated recordings of events. Specifically, the tutorial will address the ways in which accounting transactions flow through the various financial statements, and how the statements relate to each other. Ultimately, this knowledge will give financial professionals greater insight into how the operations of a company lead to the creation of those financial statements.Learning ObjectivesThe first part of the tutorial will begin with the Income Statement, and how transactions that impact revenues and expenses on that statement find their way onto the balance sheet and the statement of cash flows. We will examine how revenues and expenses impact the balance sheet and the statement of cash flows in different ways depending upon whether or not there has been a corresponding movement in cash.The second part of the tutorial will address the Balance Sheet, and how various transactions can impact the asset side and the liabilities & equity side of the Balance Sheet. We will observe that transactions that impact the Balance Sheet must always be balanced, in that the asset side of the Balance Sheet will always equal the liabilities & equity side. Further, we will observe how changes in the Balance Sheet can also affect the statement of cash flows.The last part of the tutorial will explain the use of the “Accounting Matrix”. The accounting matrix will help the reader to categorize various accounting transactions in such a way as to facilitate the creation of the Income Statement, Balance Sheet, and Statement of Cash Flows. Its use will help clarify how accounting transactions ultimately flow amongst the three major financial statements, and give the reader a better understanding of how a company’s business results are quantified.
