Chapter 1

The most fundamental part of accounting is the Accounting Equation: A = L + OE. We'll go over what it is, why it matters, and even touch a little bit on Double Entry Accounting.

Here we tackle the first two parts of the Accounting Equation: Assets and Liabilities. What do those words actually mean? How are they the same? How are they different? We'll find out!

Shareholder's Equity, or Owner's Equity, is the third pary of the Accounting Equation. It's made up of two different components, and we'll look at both of them.

The Balance Sheet is a financial statement used to show a company's assets, liabilities, and equities at a single point in time. It is, most literally, the accounting equation.

The Statement of Retained Earnings show how a companies Retained Earnings has changed over the year. We'll talk about what Retained Earnings is and how the statment of RE works.

The Income Statement is pretty straightforward, which makes me think that you're going to love it. Revenues and Expenses, that's pretty much it.

The Statement of Cash Flows is broken up into a few differenct sections, but it's basically just a statement describing how our cash position changed over the year.

All these statements... How do they work together? Where do I start? It's not terribly complicated. Let me show you.

We've already learned about assets, but now we're going to break it down a bit further and differentiate between current and non-current.

We've already learned about Assets, but now we're going to break it down a bit further and differentiate between current and non-current.

We've already learned about Liabilities, but now we're going to break it down a bit further and differentiate between current and non-current.

We've already learned about Liabilities, but now we're going to break it down a bit further and differentiate between current and non-current.

Shareholder's Equity is made up of two different components: Retained Earning and Contributed Capital. Here, we try to figure out what contributed capital is all about.

The Classified Balance Sheet lets us see our assets and liabilities by groups, which gives us a little better overview.

The single step Income Statement is what we're used to dealing with, but the Multistep Statement gives us much more visibility into the information that actually matters.

What is the Statement of Shareholder's Equity? Let's make it up together.