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Lecture

Accounting Fundamentals

In course

FIN-411: Accounting for finance

The objective of the course is to provide participants with accounting mechanisms for understanding and anaalyzing the financial statements of a company. ...

Description

This lecture covers the basics of accounting, focusing on concepts such as ledgers, debit and credit entries, rules for debits and credits, and the use of accounts. It also delves into specific transactions like investments, purchases, sales, and expenses, illustrating how they impact financial statements. The instructor explains the differences between merchandising and manufacturing businesses, detailing their operating cycles and inventory cost flows. Additionally, the lecture explores inventory valuation methods, cost accounting systems, and the classification of costs as direct or indirect. Through examples and exercises, students learn how to track inventory costs, evaluate performance, and manage resources effectively.

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Official source

Ontological neighbourhood

Business

Accounting: Financial accounting

Supply chain: Supply chain management

Related concepts (32)

Cost accounting

Cost accounting is defined by the Institute of Management Accountants as "a systematic set of procedures for recording and reporting measurements of the cost of manufacturing goods and performing services in the aggregate and in detail. It includes methods for recognizing, classifying, allocating, aggregating and reporting such costs and comparing them with standard costs". Often considered a subset of managerial accounting, its end goal is to advise the management on how to optimize business practices and processes based on cost efficiency and capability.

Management accounting

In management accounting or managerial accounting, managers use accounting information in decision-making and to assist in the management and performance of their control functions. One simple definition of management accounting is the provision of financial and non-financial decision-making information to managers. In other words, management accounting helps the directors inside an organization to make decisions. This can also be known as Cost Accounting.

Accounting

Accounting, also known as accountancy, is the processing of information about economic entities, such as businesses and corporations. Accounting measures the results of an organization's economic activities and conveys this information to a variety of stakeholders, including investors, creditors, management, and regulators. Practitioners of accounting are known as accountants. The terms "accounting" and "financial reporting" are often used as synonyms.

Inventory

Inventory (American English) or stock (British English) refers to the goods and materials that a business holds for the ultimate goal of resale, production or utilisation. Inventory management is a discipline primarily about specifying the shape and placement of stocked goods. It is required at different locations within a facility or within many locations of a supply network to precede the regular and planned course of production and stock of materials.

Inventory control

Inventory control or stock control can be broadly defined as "the activity of checking a shop's stock". It is the process of ensuring that the right amount of supply is available within a business. However, a more focused definition takes into account the more science-based, methodical practice of not only verifying a business's inventory but also maximising the amount of profit from the least amount of inventory investment without affecting customer satisfaction.

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Inventory Cost Flows: Methods and Principles Log in to Mediaspace to watch this video

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