About this Course

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Whenever the word “accounting” is pronounced, it is immediately associated with the need to memorize endless boring numbers. However, it is the common financial statements that contain important information that provides inputs for valuation of investment projects. The only challenge is how to properly extract them.

Accounting and finance are indeed intertwined. Sometimes people that are not experienced in the area even mix them up. But most often emphasis in accounting is on numbers. Still, the deep understanding of key accounting concepts helps reveal the interests and actions of people behind these numbers. And the human dimension of accounting adds invaluable insight in the potential of successful project implementation.

This Course discusses core ideas and concepts of both financial and managerial accounting. It by no means pretends to be comprehensive to any extent. But, being rather an accounting overview, it focuses on the issues that are most relevant and important for effective valuation of investment projects.

The learners will gain insight into the essence of accounting. They will be able to use the obtained knowledge and skills to successfully advance in their career at a financial institution, as well as in the area of financial management at non-financial businesses. To pursue a career in accounting, a more detailed study is strongly recommended.

Course 3 of 5 in the

Understanding Modern Finance Specialization

100% online

Start instantly and learn at your own schedule.

Flexible deadlines

Reset deadlines in accordance to your schedule.

Intermediate Level

Approx. 18 hours to complete

Suggested: 7 hours/week...

English

Subtitles: English

Learners taking this Course are

Accountants
Presidents
Financial Analysts
Consultants
Project Managers

Learners taking this Course are

Accountants
Presidents
Financial Analysts
Consultants
Project Managers

Course 3 of 5 in the

Understanding Modern Finance Specialization

100% online

Start instantly and learn at your own schedule.

Flexible deadlines

Reset deadlines in accordance to your schedule.

Intermediate Level

Approx. 18 hours to complete

Suggested: 7 hours/week...

English

Subtitles: English

Syllabus - What you will learn from this course

Week

1

5 hours to complete

Financial Accounting – Basic Principles. Transaction Analysis. Income Recognition. Accounting for Current Assets

In Week 1 we discuss the scope of accounting and its two major areas – financial and managerial accounting. In the first part of the Course – Weeks 1 through 3 – we talk about financial accounting (FA). First, the key financial statements – the Balance Sheet (BS), the Income Statement (IS), and the Statement of Cash Flows (SCF) – are introduced, and the accounting equation is analyzed. Then we move on to the basic accounting principles, standards, and approaches – from double-entry bookkeeping to GAAP. Equipped with the general understanding of the financial accounting approach, we apply accounting procedures to transaction analysis. Then we study revenue and expense recognition, and focus on accounts receivable and bad debts. Finally, you will learn how financial accounting deals with inventories.

12 videos (Total 145 min), 11 readings, 2 quizzes

12 videos

Introduction3m

1.1. Why study accounting?11m

1.2. What is accounting? Financial vs. managerial accounting11m

1.3. Key financial statements – BS, IS, SCF17m

1.4. Accounting principles. GAAP14m

1.5. Double-entry bookkeeping6m

1.6. Transaction analysis – an example15m

1.7. Revenue and expense recognition16m

1.8. Cash and accounts receivable14m

1.9. Accounting for inventories (1) – cost travel13m

1.10. Accounting for inventories (2) – cost of goods sold9m

1.11. Accounting for inventories (3) – FIFO, LIFO, LCM9m

11 readings

Konstantin Kontor2m

AIBEc. The American Institute of Business and Economics2m

Grading2m

Handouts – an important comment2m

1.1. Financial accounting basics5m

1.2. Accounting record-keeping5m

1.3. Transaction analysis – an example5m

1.4. Revenue and expense recognition – an overview10m

1.5. Accounting for uncollectibles10m

1.6. Accounting for inventories (1) – cost travel10m

1.7. Accounting for inventories (2) – basic concepts. FIFO, LIFO, LCM10m

2 practice exercises

1 (Practice)20m

1 - Basic accounting procedures for current assets1h

Week

2

4 hours to complete

Operational Assets. Depreciation. Short-Term Investments. Long-Term Liabilities. Shareholders’ Equity. Some Tax Issues

Week 2 is devoted to long-term assets and liabilities. We start with operational assets and see the role of depreciation and amortization in financial accounting and compare it to the way depreciation is used in valuation of investment projects. Then we discuss how financial investments in securities – stocks and bonds – are treated in accounting dependent upon goals and time horizon of holding and/or issuing of these securities. You will see how financial concepts (present values) are used in accounting for bond premium/discount amortization. Finally, an overview of the accounting approach to taxes is provided. On an example, you will study the core idea of deferred taxes.

12 videos (Total 129 min), 5 readings, 2 quizzes

12 videos

2.1. Operational assets – types and accounting approach13m

2.2. Depreciation11m

2.3. Depreciation tax shield8m

2.4. Intangible assets – accounting and amortization7m

2.5. Short-term investments in bonds10m

2.6. Short-term investments in stocks12m

2.7. Bonds (1) – parameters and accounting approach10m

2.8. Bonds (2) – amortization of premium/discount13m

2.9. Equity (1) – accounting for common and preferred stock11m

2.10. Equity (2) – treasury stock and stock dividends12m

2.11. Accounting for taxes – an overview9m

2.12. Deferred taxes – an example8m

5 readings

2.1. Operational assets1m

2.2. Depreciation tax shield1m

2.3. Accounting for long-term liabilities10m

2.4. Accounting for shareholders’ equity10m

2.5. Accounting for income taxes – an overview1m

2 practice exercises

2 (Practice)8m

2 - Depreciation, amortization, and deferred items1h

Week

3

4 hours to complete

The Statement of Cash Flows. Analysis and Use of Financial Statements. Financial Accounting and Project Valuation

In Week 3 of the Course we discuss the idea and format of the Statement of Cash Flows and use examples to delve deeper in its role and importance. Special attention is paid to the use of financial accounting inputs – cash flows, net income, and investments – in valuation. Then we briefly discuss the analysis and use of financial statements as a powerful tool in the overall assessment of performance, financial stability, and future development of a company or investment project. Finally, wrapping up the first part of the Course, we draw conclusions about the role of financial accounting in financial valuation in the world of uncertainty.

12 videos (Total 118 min), 3 readings, 2 quizzes

12 videos

3.1. The statement of cash flows (SCF) – idea and format10m

3.2. SCF – Example 114m

3.3. SCF – a more advanced Example 2 (1)12m

3.4. SCF – a more advanced Example 2 (2)8m

3.5. Valuation revisited – cash flows, net income, and FCF7m

3.6. Comparison of interest treatment in SCF and FCF9m

3.7. The big question – why use earnings?10m

3.8. Analysis and use of financial statements – an overview12m

3.9. Ratio analysis (1) – current position and performance6m

3.10. Ratio analysis (2) – capital structure5m

3.11. Ratio analysis (3) – operating performance11m

3.12. Financial accounting and valuation – conclusions8m

3 readings

3.1. The statement of cash flows (1) – the idea and format10m

3.2. The statement of cash flows (2) – an example10m

3.3. Analysis and use of financial statements – an overview10m

2 practice exercises

3 (Practice)8m

3 - SCF inputs and ROI ratios1h

Week

4

5 hours to complete

Managerial Accounting – Core Ideas. Cost Behavior. Direct and Indirect Costs. Indirect Cost Allocation

Weeks 4 through 6 of the Course are devoted to the issues of managerial accounting. First, we introduce the key ideas of managerial accounting, and compare it to the financial accounting. We focus on the much closer link of managerial accounting to people. Then the core idea of managerial accounting – cost – is introduced and discussed. You will learn why it is so important to identify the total cost of any product, project, or division. We will study cost behavior, fixed and variable costs, and break-even point. The last part of Week 3 discusses cost tracing and allocation as a major task of any in-depth cost analysis. We study an example and come up with the tracing and allocation roadmap.

12 videos (Total 145 min), 4 readings, 2 quizzes

12 videos

4.1. What is managerial accounting? Key ideas11m

4.2. Managerial vs. financial accounting – a comparison11m

4.3. Systems of managerial accounting13m

4.4. Introduction to costs – major terms12m

4.5. Cost behavior12m

4.6. Total cost – concept and information12m

4.7. Direct and indirect costs14m

4.8. Indirect cost allocation11m

4.9. Cost allocation example (1) – initial cost allocation13m

4.10. Cost allocation example (2) – cost re-allocation11m

4.11. Cost allocation example (3) – cost allocation rates10m

4.12. The tracing and allocation roadmap9m

4 readings

4.1. The nature of managerial accounting10m

4.2. Cost behavior10m

4.3. Total cost (1) – the concept. Direct and indirect costs10m

4.4. Total cost (2) – direct costs measurement and overhead allocation10m

2 practice exercises

4 (Practice)20m

4 - Cost behavior and cost allocation1h

Week

5

5 hours to complete

Activity-Based Costing (ABC). Relevant Costs

In Week 5 we will study the more advanced approaches to costing – activity-based costing (ABC) and relevant costs – that provide for the more accurate costing of products, projects, and divisions, and allow to reveal actual relationship between numbers and people. We start with the analysis of ABC on an example of a small retail firm. Then we move on to the more detailed example of the use of ABC in manufacturing. Both examples will help us gain insight in the role of ABC in identifying ways to improve performance. Finally, we analyze the idea of relevant costs and its application to managerial actions –make-or-buy decisions, product mix under capacity constraints, customer profit analysis. Of special attention will be the role of relevant and opportunity costs in valuation.

12 videos (Total 121 min), 8 readings, 2 quizzes

12 videos

5.1. Activity-based costing (ABC) – an overview8m

5.2. ABC for a retail firm (1)9m

5.3. ABC for a retail firm (2)13m

5.4. ABC in manufacturing (1)13m

5.5. ABC in manufacturing (2)13m

5.6. Insights provided by ABC8m

5.7. Relevant costs – an idea10m

5.8. Make-or-buy decisions (1)6m

5.9. Make-or-buy decisions (2)10m

5.10. Product mix under capacity constraints8m

5.11. Customer profit, ABC, and relevant costs7m

5.12. Irrelevance of past costs10m

8 readings

5.1. Activity-based costing (1) – ABC for a retail firm10m

5.2. Activity-based costing (2) – ABC in manufacturing10m

5.3. Insights provided by ABC10m

5.4. The concept of relevance10m

5.5. Outsourcing and make-or-buy decisions10m

5.6. Product mix under capacity constraints10m

5.7. Customer profit, ABC, and relevant costs10m

5.8. Irrelevance of past costs10m

2 practice exercises

5 (Practice)20m

5 - Costs, activities, and relevance1h

Week

6

5 hours to complete

Budgets and Responsibility Accounting. Accounting and Valuation – Final Conclusions

Week 6, the final week of the Course, is devoted to the discussion of budgets and responsibility accounting as powerful tools of improving efficiency and quality of managerial decision making. A comprehensive example of preparing the operational budget will help reveal the interdependence of different areas of management in the budgeting process. We will also discuss responsibility accounting in some more detail to follow relationships between decision makers, processes, and results – or, as we call it, numbers and people. We will comment on some major trends in approaching budgeting in the fast changing, uncertain, and complex world. Finally, we summarize the contribution of accounting to the valuation of investment projects. As a result, you will be able to successfully apply the obtained knowledge and skills well beyond accounting, but in any financial and managerial area.

12 videos (Total 106 min), 4 readings, 2 quizzes

12 videos

6.1. Budgets – an overview. The budgeting cycle11m

6.2. Budgets, planning and project management13m

6.3. The master budget – an idea6m

6.4. Operational budget – the data (1)13m

6.5. Operational budget – the data (2)5m

6.6. Preparing operational budget (1)3m

6.7. Preparing operational budget (2)6m

6.8. Preparing operational budget (3)6m

6.9. Preparing operational budget (final steps)7m

6.10. Budgeting and responsibility accounting16m

6.11. Changes in budgeting – major trends8m

6.12. Accounting and valuation – final conclusions7m

4 readings

6.1. Budgets – ideas, roles, and advantages10m

6.2. Preparing operating budget (1) – the data10m

6.3. Preparing operating budget (2) – the road map10m

6.4. Budgets and responsibility accounting10m

1 practice exercise

Final Test1h

Instructor

Konstantin Kontor

Director and Professor of Finance and Strategy

American Institute of Business and Economics (AIBEc)

Frequently Asked Questions

When will I have access to the lectures and assignments?
Once you enroll for a Certificate, you’ll have access to all videos, quizzes, and programming assignments (if applicable). Peer review assignments can only be submitted and reviewed once your session has begun. If you choose to explore the course without purchasing, you may not be able to access certain assignments.
What will I get if I subscribe to this Specialization?
When you enroll in the course, you get access to all of the courses in the Specialization, and you earn a certificate when you complete the work. Your electronic Certificate will be added to your Accomplishments page - from there, you can print your Certificate or add it to your LinkedIn profile. If you only want to read and view the course content, you can audit the course for free.
What is the refund policy?
Is financial aid available?

More questions? Visit the Learner Help Center.

Core Concepts of Accounting – Numbers and People

Course 3 of 5 in the

100% online

Flexible deadlines

Intermediate Level

Approx. 18 hours to complete

English

Course 3 of 5 in the

100% online

Flexible deadlines

Intermediate Level

Approx. 18 hours to complete

English

Syllabus - What you will learn from this course

Financial Accounting – Basic Principles. Transaction Analysis. Income Recognition. Accounting for Current Assets

Operational Assets. Depreciation. Short-Term Investments. Long-Term Liabilities. Shareholders’ Equity. Some Tax Issues

The Statement of Cash Flows. Analysis and Use of Financial Statements. Financial Accounting and Project Valuation

Managerial Accounting – Core Ideas. Cost Behavior. Direct and Indirect Costs. Indirect Cost Allocation

Activity-Based Costing (ABC). Relevant Costs

Budgets and Responsibility Accounting. Accounting and Valuation – Final Conclusions

Top reviews from Core Concepts of Accounting – Numbers and People

Instructor

Konstantin Kontor

About Moscow Institute of Physics and Technology

About American Institute of Business and Economics

About the Understanding Modern Finance Specialization

Frequently Asked Questions