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LinkedIn Learning

Financial Accounting Part 1

via LinkedIn Learning


Find out how to use financial data to drive strategic decision-making. Learn the basics of financial accounting, including analyzing and preparing financial statements.

Anyone who needs to interpret financial statements or communicate financial results needs a solid understanding of financial accounting. This comprehensive, self-contained training course is designed to give business professionals—including managers, analysts, and entrepreneurs—the confidence they need to use financial data to drive strategic decision-making. Professors Jim Stice and Earl Kay Stice use actual reports from real-world companies like Microsoft and Walmart to drive home ideas such as the difference between net income and cash flow and why the credits and debits system is so important to everyday accounting. They help you understand assets and liabilities; interpret balance sheets, income statements, and statement of cash flows; evaluate and adjust journal entries; and prepare your own financial statements. This is an MBA-level course, layered with case studies and insights that will help you bridge the gap between the academics of accounting and its real-world application.

Stay tuned for Part 2 of the training series, which covers ratio analysis, forecasting, and business valuation.


  • The importance of accounting
1. The Accounting Equation
  • Clay tokens, sheep, and Italy
  • The basic equation
  • Expanded accounting equation: SCF
  • Expanded accounting equation: IS
2. Assets
  • Assets: Planes, trains, and automobiles
  • Definition of an asset
  • Types of assets: Current
  • Types of assets: Long term
3. Liabilities
  • Obligations to suppliers, employees, governments, and customers
  • Definition of a liability
  • Types of liabilities: Current
  • Types of liabilities: Long term
  • Contingent liabilities
4. Owner's Equity
  • Owner's equity: Paid-in capital and retained earnings
  • Definition of equity
  • Book value vs. net worth
  • Other components of owner's equity
5. Financial Statements: Balance Sheet
  • Financial statements: Balance sheet for Walmart
  • Where financial statements come from
  • The Microsoft balance sheet
  • Notes from Microsoft on the balance sheet
  • Limitations of the balance sheet
6. Financial Statements: Income Statement
  • Differences between the balance sheet and the income statement
  • Income statement
  • Components of the income statement
  • Revenues, expenses, gains, and losses
  • Earnings per share
  • The Walmart income statement
7. Financial Statements: Statement of Cash Flows
  • Cash cows
  • Statement of cash flows
  • Statement of cash flows: Examples
8. How Financial Statements Are Made
  • The importance of routine bookkeeping
  • Impact of events on assets and liabilities, part 1
  • Impact of events on assets and liabilities, part 2
  • Impact of events on assets and liabilities, part 3
  • Impact of events on revenues and expenses, part 1
  • Impact of events on revenues and expenses, part 2
  • Impact of events on revenues and expenses, part 3
  • Impact of events on revenues and expenses, part 4
9. Debits and Credits
  • The accuracy of debits and credits in the days of real books
  • Debits and credits
  • Journal entries, part 1
  • Journal entries, part 2
  • Journal entries, part 3
  • T-accounts and posting
  • Trial balance: The raw material for financial statements
10. Accrual Accounting
  • The market value of accounting adjustments
  • Net income vs. cash flow
  • Four general types of adjustments
  • Adjusting journal entries, part 1
  • Adjusting journal entries, part 2
  • Adjusting journal entries, part 3
  • Adjusting journal entries, part 4
  • Closing revenue, expense, and dividend accounts
  • Making the financial statements
  • Next steps

Taught by

Jim Stice and Kay Stice


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