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Transcript

Well, congratulations in finishing this course, on a refresher course on accounting, I really hope you've enjoyed the journey. And you've learnt a lot from listening to all these lectures and participating. Let's have a bit of a recap on what we've actually been talking about all these lectures. So first of all, in section one, if you remember, we talked about all of the key accounting concepts. So things like the accounting entity principle, and the period concept, reliability, relevance, compare ability, and the accrual versus cash basis of accounting. And as you've gone through all of the different sections, you've probably seen themes of how these underlying principles have popped up.

And so what's important to understand is that these key concepts actually form the fundamental basis of accounting and you should always have these in the back of your mind. Whenever thinking of any transactions, or you picking up any kind of financial information, any financial statements, these concepts are always going to be present. In section two was a big section, we talked about the double entry accounting process, we looked at things like the accounting equation, understanding transactions. And if you recall the four step process of actually how to work out what the actual debit side credit side of the transaction is, we then put things into T accounts. And then we looked into all of the typical kind of transactions that would occur across any kind of business. And we broke these down into the assets, the contract assets, which are like the negative assets, liabilities, owner's equity, and then we did a more of a deep dive into retained earnings.

And also understanding what the general journal format is and how that works in practice. In Section three, we put a lot of this into practice. And we actually looked at the short Phil automotive case study, and we actually started taking a range of transactions and using those number of different methods in order to understand the final positions, we looked at the worksheet method. We looked at putting this into general journals, as well as translating this into takeouts. And then in Section four, we introduced the trial balance to you, which is the overall position before you start creating financial statements. It's the actual position of summary of all of your financial closing balances for assets, liabilities and owner's equity accounts.

And then in Section five, we looked at making adjustments through the adjusting and closing process. So we first looked at the adjusting entries, which if you recall, is all about to do with whether an item has been earned, whether a cost has actually been incurred, or whether an asset has been consumed, which will result in an adjusting entry. And after we went through, again, another practical example through the shortfall automotive case study. We then looked at actually how do we create an adjusted trial balance and then we also looked into more of a deep dive around closing entries and how you get your Profit added up Now, onto your balance sheet. So you've got a balance sheet. Then in Section six, we actually looked at all of the different key financial statements that are used in practice.

So we looked at the balance sheet or statement of financial position, which is really a snapshot in time of the company's position. We then looked at the profit loss statement or statement, or income statement is another name for it. And this actually looks at the performance of its financial performance of revenues and expenses over a period of time. We then looked at the statement of cash flows, which actually looks at purely the cash movement from one period to another and actually tells the story breaking into the operating, investing and financing activities. And finally, in Section seven, we looked at some ratios that you can calculate, to actually look at the health of a business. And these are broken into five key categories of liquidity, which is looking at the company's ability to meet its short term debts, profitability, which is about understanding For every dollar of sold, how much profit is actually made the solvency which is actually looking at the debt versus equity and understanding how much leverage is actually used within the business efficiency ratios looking at things like inventory turnover, accounts receivable, turnover, and creditor turnover.

So actually understanding how effectively we are collecting debts, managing a stock. And finally shareholder ratios in which you can actually analyze the actual returns from a shareholders perspective as well. And so that's the end of the course everyone, I really hope you've enjoyed the journey along with me the whole way about understanding accounting. This is stuff that you can immediately apply it into the real world. So go out download balance sheets, and p&l from companies that you like and start to make sense of them. Use it within your own businesses, or use it with your own career to actually understand what people are talking about.

Because really, accounting is the language of business. So it's been a pleasure to teach you a lot The way I hope to see you in future courses and I wish you all the best in your accounting journey.

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