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BA 215 Fundamentals of Accounting

BA 215 Fundamentals of Accounting. Course Introduction & Basic Financial Statements. Who Are You?. What do you hope to learn from this class? Students who have had accounting classes or prior accounting experience? Students who hope to eventually run their own business?.

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BA 215 Fundamentals of Accounting

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  1. BA 215Fundamentals of Accounting Course Introduction & Basic Financial Statements

  2. Who Are You? • What do you hope to learn from this class? • Students who have had accounting classes or prior accounting experience? • Students who hope to eventually run their own business?

  3. Learning Objectives Related to the Needs of External Users: 1. The information reported in the basic financial statements. 2. How to to use these financial statements to understand aspects of how well a business is doing.

  4. Learning Objectives Related to the Needs of Internal Users: 3. Cost behavior and how to conduct cost-volume-profit analyses. 4. How to use the time value of money to make financial decisions.

  5. Users of Financial Information • Internal Users - managers plan, organize and run a business. • External Users - • Investors • Creditors • Others • Taxing authorities • Regulatory agencies • Customers • Labor unions (employees • Economic planners

  6. Questions Asked by Internal Users • Is cash sufficient to pay bills? • What is the cost of manufacturing each unit of product? • Can we afford to give employee pay raises this year? • What product line is most profitable?

  7. Questions Asked by External Users • Is the company earning satisfactory income? • How does the company compare in size and profitability with competitors? • Will the company be able to pay its debts when they become due?

  8. Importance and Purpose of Accounting Accounting is the process of capturing, measuring, and communicating economic information about an organization to interested parties.

  9. Accounting – ‘The Language of Business’ How Would You Define:Accounting • An Asset ? • A Liability ? • Equity ? • Simple illustration of the balance sheet • The accounting equation

  10. Syllabus

  11. Chapter 1 Overview of Financial Management

  12. Financial Objectives of Most Organizations • Efficiency • Productivity of assets • Liquidity • Ability to meet short-term financial obligations • Profitability • Cash inflows > cash outflows, or growth • Stability • Maintain a balance in the capital structure

  13. 3 Types of Business Activity • Investing • Acquiring assets to put to work • Operating • Putting the assets to work • Financing • Securing funds to meet current obligations and finance future operations

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