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Students will review:
In this chapter, you'll learn the answers to questions including:
- What is the purpose of accounting, and why is it important in business?
- Who are the main external and internal users of accounting?
- What does 'GAAP' stand for?
- Why are ethics important in accounting?
- What type of technology is used in accounting?
1. What Is Accounting? - Purpose, Importance & Relationship to Business
Just as French is considered the language of love, accounting is considered the language of business. In this lesson, you will learn exactly what accounting is. You will also learn the purpose of accounting, why it is important, and how it relates to the business world.
2. What Is GAAP? - The Generally Accepted Accounting Principles
Rules and regulations are a part of life for everyone, including those in the accounting industry. In this lesson, you will learn about GAAP standards, what they mean to accounting, and who establishes them.
3. Technology in Accounting: The Growing Role of Technology in Accounting
Change and technology go hand in hand, especially in the accounting industry. In this lesson, we will take a walk back in time and discuss some of the technological advances in accounting through the years. We will also discuss how these changes have affected the accounting process.
4. Petty Cash Fund in Accounting
A petty cash fund is used by a business to take care of very small purchases that do not justify a formal journal entry. They are used for speed and convenience when dealing with very small business expenses.
5. Business Transaction: Definition, Types & Analysis
This lesson looks at business transactions and offers a definition for them. We'll also go over types of business transactions and look at some examples.
6. Calculate Ending Inventory: Formula & Explanation
This lesson will outline the concept of ending inventory and how it is used in business. Also, we will take a look at a balance sheet and explore the way in which investors use it as tool to gain a high-level view of the status of their companies.
7. Calculating Beginning Inventory: Formula & Explanation
One of the most important assets a company must protect and control is inventory. In this lesson, you'll learn how to calculate beginning inventory, which is the first step of accounting for inventory changes during an accounting period.
8. Capital Expenditures: Definition, Formula & Examples
Businesses often make purchases that help them to maintain or grow their current operations. This is called capital expenditure. In this lesson, you will learn what capital expenditure is and examine its formula as well as some examples of it.
9. Capital Lease in Accounting: Definition, Requirements & Example
In this lesson, we'll discuss the nature of capital leases. We'll look at what it means to 'own' an asset from an accounting standpoint so that we can understand why the accounting for capital leases differs from the accounting for operating leases. We'll then look at this accounting and some of its complexities.
10. Cash Basis Accounting Method: Definition & Example
This lesson defines cash basis accounting and describes the differences between this type of accounting and other accounting methods. It also discusses the type of organizations that typically use cash basis accounting, and gives an example of how cash basis accounting works.
11. Cash Discount: Definition, Formula & Example
Sometimes you can get a cheaper price for a product if you pay cash up front. In this lesson, you'll learn about the cash discount and its formula, and you will find some examples of ways in which it is used. A short quiz follows the lesson.
12. Cash Equivalents: Definition & Examples
In this lesson, you'll learn the purpose of cash equivalents and their characteristics. We'll also define interest and discuss an example of a cash equivalent, time deposit.
13. Cash Payments Journal: Definition & Example
In this lesson, we'll learn about cash payments journals. We'll explain how a company might use one and use an example to learn how to make entries. The lesson will be concluded with a summary and a quiz.
14. Cash Receipts Journal: Definition & Examples
This lesson explains how a cash receipts journal is used by a business, what types of transactions are posted in a cash receipts journal, and how to keep those transactions balanced.
15. Check Clearing: Definition, Process & Rules
Have you ever wondered what happens when you deposit a check? This lesson will discuss the details of check clearing. We will examine the definition, process, and rules for check clearing and then review an example.
16. What Is a Computerized Accounting System? - Types, Advantages & Disadvantages
This lesson explains what a computerized accounting system is, how a company selects a system, and what the advantages and disadvantages of computerized accounting systems are.
17. What Is a General Journal in Accounting? - Definition, Format & Examples
The general journal is usually the first of a company's accounting records that we learn about and use, but it can also be one of the most misunderstood. It doesn't have to be difficult, though, as we'll show here.
18. What Is a General Ledger? - Definition & Examples
Accountants and bookkeepers record financial events in multiple documents in order to ensure the accuracy of the information. In this lesson, we will look at the general ledger and you can discover how to make entries into this ledger.
19. Financial Documents: Definition, Types & Business Examples
Financial documents are vital tools for analyzing the success of a business. In this lesson, you'll learn about some important financial documents and be provided some examples. You'll also have a chance to take a short quiz.
20. What Is a Bank Loan?
Bank loans are common types of funding for many people who want to buy big ticket items, such as cars or homes. Read on to find out more on what a bank loan is, what it is commonly used for, and the different types of loans banks offer.
21. What Are Accounts Payable? - Definition & Examples
Nobody likes to have accounts payable, but they are a reality of business. In this lesson, you'll learn the definition of accounts payable, how they fit into a business overall finances and be provided some examples.
22. What Is Capital? - Definition & Concept
Capital is a fundamental concept in business. In this lesson, you'll learn about capital and some related concepts. You'll also have a chance to take a short quiz after the lesson to reinforce your knowledge.
23. What Is GAAP? - Definition, Standards & Requirements
In this lesson, you will learn about generally accepted accounting principles (GAAP). You will learn the reason for the principles, their purpose, and how they relate to both corporate America and everyday people.
24. What Is Revenue? - Definition & Concept
Revenue is essential for nearly every type of business. In this lesson, you'll learn what revenue is, what it's not, and how it fits into the overall income of a business. You'll also have a chance to reinforce your knowledge with a short quiz.
25. Modern Monetary Theory: Definition, History & Theorists
In this lesson, you'll learn about Modern Monetary Theory, a highly controversial model of macroeconomics. The concept of Modern Monetary Theory will be defined, some of its history outlined, and some of its theorists identified.
26. Economist Joseph Schumpeter: Theories & Books
In this lesson you will learn about Joseph Schumpeter's most notable economic theories and his most widely read books. Explore what influenced his ideas and how these ideas shaped the science of economics.
27. Black-Scholes Model: Formula & Examples
The Black-Scholes model is a mathematical model for financial markets. From this larger model, the Black-Scholes formula for theoretical option value is used to determine what price put and call options should be trading at based on assumptions of volatility
28. Optimal Capital Structure
There are multiple approaches and perspectives in defining an optimal capital structure. In this lesson, we will examine two important perspectives: raising capital and servicing capital.
29. Required Rate of Return (RRR): Formula & Calculation
Both investors and businesses have a required rate of return (RRR) for potential investments and projects. We will use examples and formulas to calculate an RRR for both.
30. What is a Closed-End Fund? - Definition & Examples
In this lesson we will look at what a closed-end fund is and how it is structured. We all also review how it combines elements of both mutual funds and stocks.
31. Monetary Measurement Concept: Advantages & Limitations
A company must record its business activities so it can summarize the information and produce reports. In this lesson, you will learn about the monetary measurement concept.
32. What is a Lien Waiver? - Definition, Partial & Conditional
In this lesson we will look at what a lien waiver is and how it protects someone who is paying for contract work and materials. We will also review the different forms of waivers and explain the scope of each type.
33. What is a Hospital Lien? - Definition & the Hospital Lien Act
In this lesson you will learn about hospital liens and why hospitals and other medical providers impose them. You will also learn what makes a lien valid and about its disadvantages.
34. Types of Liens: Judgment, Statutory & Consensual
There are three basic types of liens: consensual, statutory and judgment. In this lesson, we will provide descriptions and examples of each lien type.
35. Equitable Lien vs. Constructive Trust
In this lesson, we'll define equitable restitution and you'll learn about two different types: equitable lien and constructive trust. We'll also explain two scenarios that distinguish the two types.
36. How Long Does a Tax Lien Stay on Your Credit Report?
Read this lesson and you'll learn how long a tax lien can affect your credit report for. You'll also learn whether there is a way to remove it sooner than later and how you can qualify for the removal.
37. What is a Medical Lien? - Definition & Requirements
In this lesson we will discuss what how you many be affected in the event of a medical lien and what exactly a medical lien is. We will also go over the requirements for a medical lien to be placed.
38. What is a Suspense Account? - Definition & Examples
The suspense account is used as a place to temporarily hold unclassified or disputed funds and expenses while a company decides where to put them permanently. This lesson will illustrate some common uses for suspense accounts with examples.
39. What is a Payable on Death Bank Account?
In this lesson, you'll learn how some people avoid the probate process and make it easier for beneficiaries to receive a sum of money upon their death. You'll also learn how easy it is for these beneficiaries to claim the money.
40. Capital Lease vs. Operating Lease in Accounting
There are two main types of leases, capital and operating. The accounting treatment is different for both. We will work through an example and show the similarities and differences.
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Other chapters within the Financial Accounting: Help and Review course
- Financial Statements in Accounting: Help and Review
- Mechanics of the Accounting Cycle: Help and Review
- Project Evaluation & Analysis
- Preparing Financial Statements: Help and Review
- Internal Controls in Accounting: Help and Review
- Merchandising Operations and Inventory in Accounting: Help and Review
- Current and Long-Term Liabilities in Accounting: Help and Review
- Adjusting Accounts & Preparing Financial Statements: Help and Review
- Taxation of Business Entities
- Accounting Changes & Errors
- Classifying Costs in Accounting
- Cost Accounting Methods
- Cash Flow Statements & Disclosures
- Asset & Inventory Management
- Small Business Financing
- Small Business Accounting
- Financial Reporting
- Banking, Insurance & Monetary Policy
- Types of Financial Risk
- Credit Risk
- Derivatives in Finance Overview
- Capital Markets in Risk Management
- Managing Financial Risk
- Financial Risk & Decision-Making