About This Chapter
Mechanics of the Accounting Cycle Overview - Chapter Summary
If your employees are looking to improve their accounting skills, share this chapter on the mechanics of the accounting cycle. The chapter can serve as a refresher for employees who already know foundational accounting topics, or it can benefit employees who need to quickly establish basic accounting skills. These simple video lessons cover the applications of the accounting equation as well as the functions of financial statement ratios, ledgers and methods for recording business transactions.
The chapter is available online 24/7, which helps employees review the material whenever they have free time. Our accounting experts are available to answer any questions your employees may have, and the included assessments can help your employees practice using financial formulas.
How It Helps
- Builds awareness: The chapter can help employees quickly establish an awareness of accounting cycle mechanics and equations.
- Explains practical business applications: The lessons in the chapter show employees exactly how different accounting concepts are used at various stages of the accounting cycle.
- Strengthens accounting skills: Employees will be able to use the chapter's accounting equations and concepts to perform a variety of accounting tasks.
By the end of the chapter, your employees should be able to:
- Recognize the components of the accounting equation
- Evaluate the purpose of source documents in accounting
- Add revenues, expenses and dividends using the accounting equation
- Understand how accounts are used to categorize transactions
- Assess the uses of ledgers, charts of accounts, debits, credits, journal entries and trial balances
- Record and analyze business transactions
- Compute and interpret asset returns
- Explain how financial statement ratios can be used to determine a company's performance
1. The Accounting Equation: Definition & Components
There are a few basic building blocks that form the foundation of accounting. One of those is the accounting equation. In this lesson, you will learn what makes up the accounting equation, its purpose, and how it works.
2. Source Documents in Accounting: Definition and Purpose
Do you know what role source documents play in accounting? If not, don't worry; by the end of this lesson, you will. You will also learn the definition of source documents and see some common examples of source documents.
3. Using the Accounting Equation: Adding Revenues, Expenses & Dividends
Accounting is built on a solid foundation called the basic accounting equation. In this lesson, you're going to learn what happens when you add revenue, expenses, and dividends to the basic equation.
4. What Are Accounts? - Definition and Use to Categorize Transactions
Everything in this world is made up of parts. Accounting is no different. The numerous parts that exist in the accounting world are called accounts. In this lesson, you will learn what accounts are, how they are classified, and what they do.
5. 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.
6. Understanding Debits and Credits in Accounting
Debits and credits are major players in the accounting world. In this lesson, you will learn just what debits and credits are and why they are important to accounting.
7. Practical Application in Accounting: Evaluating Debit & Credit Business Transactions
Understanding the definition and correct use of debits and credits is a key component of accurate accounting. You'll get to learn more about that and get to evaluate a scenario in which you will correct errors in debit and credit entries.
8. Recording Business Transactions in Accounting
Recording a transaction is the first step in the accounting cycle. In this lesson, you will learn why transactions are recorded, where they are recorded, and how they are recorded.
9. Using the Accounting Equation: Analyzing Business Transactions
Transaction analysis can be a tricky task. In this lesson, you will learn what transaction analysis is, how to analyze a transaction, and how it is related to the accounting equation.
10. Computing and Interpreting Return on Assets
There are a number of ratios that can be calculated by information found on the financial statements. In this lesson, you will learn about return on assets.
11. Journal Entries and Trial Balance in Accounting
There are several concepts that make up an accounting cycle. In this lesson, you will learn about two of those - journal entries and the trial balance.
12. Financial Statement Ratios: Determining Company Performance
Have you ever wondered why the financial statements are so important to a company? In this lesson, you will learn about several financial statement ratios and how they help determine company performance.
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