The Principles of Accounting
“You have to understand accounting and you have to understand the nuances of accounting. It's the language of business and it's an imperfect language, but unless you are willing to put in the effort to learn accounting - how to read and interpret financial statements - you really shouldn't select stocks yourself." - Warren Buffett”
The stock value of an entity is measured in assets, liabilities, and equity. The flow of money is measured in revenues, expenses, gains, and losses.
Transactions between stock accounts and flow events is referred to as debits and credits. This is how value and money are exchanged and accounted for.
Continuing the explanation of how debits and credits are applied to accounting transactions, this video is demonstrates the process of recording transactions in the accounting journal.
This module continues the practice of accountancy with more complex accounts. Accruals, such as interest payable, and accumulations, such as accumulated depreciation are discussed.
1-8: Reconciliation & Financial Statements
This module spans Factsheet 1-7 & 1-8, and explains how accounting data is reconciled at the end of a reporting period into T-accounts, a trial balance, and financial statements.
Videos are linked in module title.