The Accounting Equation and Financial Statements


Overview/Description
Target Audience
Expected Duration
Lesson Objectives
Course Number


Overview/Description
Business owners and managers, regardless of form and size of their organizations, put their best efforts in generating enough assets to pay for business's liabilities and build adequate stockholders' equity. The basic accounting equation offers us a simple way to understand how these three elements – assets, liabilities, and stockholders' equity – relate to each other. Every economic activity, or transaction, in an organization affects two or more of these elements. It is therefore important to understand how these elements, and the underlying transactions, appear in financial statements that provide a summary of a business's performance over a period of time. This course aims at familiarizing learners with the basic accounting equation and financial statements. You are introduced to the accounting equation and how given transactions affect the specific accounts using the debit and credit rule. This course also presents the key characteristics of financial statements and how they are related to each other.

Target Audience
Anyone either serving in an accounting role, or who just wants to have a working understanding of the accounting and bookkeeping functions, but who has no previous experience in accounting.

Expected Duration (hours)
1.0

Lesson Objectives

The Accounting Equation and Financial Statements

  • determine how given transactions affect the accounting equation
  • determine how common transactions affect specific accounts using the debit and credit rule
  • recognize key characteristics of financial statements
  • recognize the key relationships between financial statements
  • Course Number:
    fin_03_a02_bs_enus