About This Chapter
Accounting & Financial Management - Chapter Summary
This chapter covers the essential accounting concepts used in businesses today. You'll examine different financial reports, such as the balance sheet, and learn how to prepare income statements and statements of retained earnings. Our expert instructors provide step-by-step instructions on calculating income taxes for businesses and using accounting principles to make business decisions. You'll also see how tax preparation differs depending on the type of business, such as sole proprietorships or partnerships. These lessons also teach you about the role of ethics in accounting and the reasons for the Sarbanes-Oxley Act. When you've viewed all the lessons in this chapter, you'll know about:
- Inventory valuation methods
- Accrued revenues and expenses
- Uses for the chart of accounts
- Pros and cons of equity financing
- Cost accounting's role in management
- Insurance policies
- Payroll taxes
Our videos are easy-to-understand and provide all the critical financial management and accounting principles you need to know in a flexible and self-paced format. Engaging graphics and animations are useful tools for helping you quickly learn and retain the subject matter, while corresponding lesson transcripts let you easily find key terms. Self-assessment quizzes come with each lesson, and you'll find a chapter exam at the end of the lessons to confirm your understanding of the material.
1. The Importance of Ethics in Accounting
Ethics - are they really important in accounting? In this lesson, we will discuss what ethics are and what role they play in accounting; we'll also review a case that is deeply rooted in ethics. In the end, we will decide whether or not ethics are important in accounting.
2. Inventory Valuation Methods: Specific Identification, FIFO, LIFO & Weighted Average
This lesson introduces you to the cost flow assumption methods of specific identification: FIFO, LIFO, and weighted average. You will also learn how to compute inventory in a perpetual system using the methods of FIFO, LIFO, and weighted average.
3. The Balance Sheet: Purpose, Components & Format
There are four financial reports that make up a group known as the financial statements. We will take a walk with one of those reports - the balance sheet - and learn what it is, what items are included on it and what its role in the group is.
4. Preparing the Basic Income Statement and Statement of Retained Earnings
Preparing financial statements can be tricky. In this lesson, we are going to talk about how to prepare the first two basic financial statements: the income statement and the statement of retained earnings.
5. Accrued Expenses & Revenues: Definition & Examples
Accruals are a part of the accounting world for most businesses. In this lesson, you will learn about two important parts of the concept of accruals: accrued revenue and accrued expenses.
6. Ledgers and Chart of Accounts: Definitions and Use
There are several key concepts that are important to learn when it comes to accounting. In this lesson, you will learn about the ledger and the chart of accounts.
7. What Is Equity Financing? - Definition, Pros, Cons & Examples
Equity financing is as necessary to a business as air is to a person, but because it comes in several forms, it can easily be misunderstood. This article explains the various types of equity financing and explores their advantages and disadvantages for both companies and investors.
8. Fixed Costs: Definition, Formula & Examples
Understanding an organization's cost structure is essential for management to make appropriate investments. In this lesson, you'll learn the definition of fixed costs and why understanding fixed costs is an important part of financial management.
9. The Role of Cost Accounting in Management
Accounting can be generally defined as 'showing where the money came from and where it went.' Cost accounting, however, is much more data driven and useful to management. In this lesson, we'll learn how, and why.
10. Using Accounting Concepts to Make Business Decisions
There are several accounting concepts that make up the generally accepted accounting principles (GAAP). Using these principles, managers are better able to read and understand financial statements needed to make business decisions.
11. Understanding Insurance Policies and Risk Management
Obtaining insurance is one of the most common methods of risk management. In this lesson, you'll learn about insurance policies and some key concepts related to insurance. You'll also have a chance to take a short quiz.
12. What is Payroll Tax? - Definition & Example
This lesson will define the payroll tax and explore the various types of payroll taxes. Also, an example that looks at payroll taxes from the viewpoint of the employee will be provided.
13. Sales Tax: Definition, Types, Purpose & Examples
Learn what sales tax is and get information about many of the different types that you may pay. Discover where all that money goes and how it is used to offer services that you benefit from every day.
14. Business Income Tax Calculations
Just like our own paychecks, businesses must claim their income to the Internal Revenue Service. The steps include calculating income and deductions, factoring in assets, depreciation, profits and losses.
15. The Sarbanes-Oxley Act: Definition and Explanation
Government regulations play a major role in corporate financial reporting. In this lesson, you will learn about one of the most important regulations enacted in the last two decades - the Sarbanes-Oxley Act.
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