Basic Accounting 101

Upon successful completion of this course the students will have reliably demonstrated the
ability to:

1. Describe the main purpose of accounting and its role for organizations.
   • Explain what accounting is and why it is important to non-accountants.
2. Analyze transactions in relation to generally accepted accounting principles and introduce the four financial statements.
   • Define the cost principle.
   • Define the going concern, monetary unit and economic entity assumptions.
   • State and utilize the basic accounting equation to record transactions.
   • Introduce the four financial statements (primarily balance sheet and income statement)
3. Record transactions, post to ledger and prepare a trial balance.
   • Explain what an account is and illustrate the use of debits and credits.
   • Utilize journals and ledgers to record basic transactions.
4. Justify and prepare adjusting journal entries and an adjusted trial balance.
   • Contrast cash and accrual basis of accounting.
   • Identify the types of adjustments required when using the accrual basis.
5. Contrast accounting for merchandise and service organizations.
   • Describe the differences between a service company and a merchant operation.
   • Prepare entries for sales and purchases using a perpetual inventory system.
   • Prepare a multiple-step income statement.
   • Calculate gross profit margin and profit margin.
6. Demonstrate an understanding of the main principles of internal control and apply these to cash management
   • Illustrate the use of a petty cash fund.
   • Prepare a bank reconciliation