Intermediate Accounting I Overview

Study Notes

Intermediate Accounting I

Intermediate Accounting I is the next step after introductory accounting courses and covers more complex accounting concepts and transactions. This course builds upon foundational knowledge of financial reporting, cost accounting, and taxation. Here's what you can expect from this intermediate level accounting course:

Learning Objective: Understanding Transactions

Transactions are exchanges between two parties that involve one or both receiving goods or services. They also may involve money being transferred between them. A transaction will have either a debit and a credit or both. The concept of T-accounts is introduced. This is an accounting tool that allows you to analyze a transaction to determine its financial impact. It is essentially a two-column table that helps you to understand how a transaction affects the balance sheet and the income statement.

Balance Sheet

The balance sheet is a financial statement that shows a company's financial position at a specific point in time. It lists the company's assets, liabilities, and equity. Assets are what a company owns that can be expected to deliver future economic benefits. Liabilities are what a company owes to others. Equity represents the residual interest in the assets of the company after deducting liabilities.

Income Statement

The income statement is a financial statement that shows a company's revenues and expenses over a certain period of time. The primary goal of the income statement is to provide information about the company's profitability, or its ability to generate revenue and control expenses. The income statement breaks down a company's revenues and expenses into line items.

Depreciation and Amortization

Depreciation and amortization are accounting methods used to allocate the cost of a long-term asset over its useful life. Depreciation is used for physical assets like property, plant, and equipment. Amortization is used for intangible assets like patents and trademarks. This is because intangible assets have a finite life, unlike physical assets.

Accounting for Fixed Assets and Depreciation

Fixed assets are long-term assets that do not change in form or function. They are not intended for sale and are used in the production of goods or services. Fixed assets are recorded on the balance sheet, under the line item "Property, Plant, and Equipment." They are classified into three major classes: land, buildings, and equipment.

Financial Statements and Reports

The financial statements provide important information about a company's performance and its ability to meet its obligations. The balance sheet, income statement, and cash flow statement are the core components of a standard annual report. The annual report provides comprehensive information about the company's activities during the previous fiscal year.

Accounting Cycle

The accounting cycle is a series of steps that organizations use to prepare their financial statements. It includes identifying transactions, recording them, classifying and summarizing them, posting them to accounts, preparing reports, analyzing results, and keeping records. This process provides a clear picture of your organization's operations, liquidity, and profitability over time.

Ethical Issues and Problems in Accounting

Accountants must always maintain professional ethics while performing their duties. Some potential ethical issues include conflicts of interest, fraudulent financial reporting, and confidentiality violations. The accounting profession has strict codes of conduct in place to address these issues.

Intermediate Accounting I is a critical step towards understanding advanced accounting concepts in depth. It further enhances your knowledge of financial reporting, cost accounting, and taxation principles required in various business contexts. By successfully completing this course, students will have gained valuable skills needed for careers in accounting, finance, management, and other related fields.

Description

Explore the key concepts of Intermediate Accounting I, including understanding transactions, balance sheet, income statement, depreciation, fixed assets, financial statements, accounting cycle, and ethical issues in accounting.