Foundations of Financial Accounting and Record-Keeping

This week’s topics

Foundations of Financial Accounting and Record-Keeping

1. Purpose of financial records
2. Primary stakeholders and user needs
3. Distinction between liquidity and solvency
4. The fundamental accounting equation
5. The Basic Accounting Equation
6. Bailout 1: Liquidity vs. Solvency
7. Key Concepts on Financial and Management Accounting

What you will be able to do

• 1.1 Explain the need for financial record-keeping.
• 1.2 Explain the importance of liquidity and solvency in business.
• 1.3 Explain the accounting equation.

Activity

Start with this week’s 3 videos, then: Seminar, guided reading and a short written task: explain the need for financial record-keeping.

Study materials

Videos

• The Basic Accounting Equation · YouTube · Edspira · 7 min · for registered students
• Key Concepts on Financial and Management Accounting · YouTube · Galton College · 10 min · for registered students
• The KEY to Understanding Financial Statements · YouTube · Accounting Stuff · 6 min · for registered students
• Long-term Solvency Ratios | Financial Statement Analysis · YouTube · Edspira · 12 min · for registered students

Further resources

• Introduction to Financial Accounting, Lyryx 2023-A, ch. 1: Introduction to Financial Accounting · PDF · Other, textbook chapter; pp. 1–44 · for registered students
• Principles of Accounting Vol. 1, ch. 3.2–3.4: The accounting equation and transactions · PDF · OpenStax, textbook chapter; pp. 109–122 · for registered students