1.1 Importance of Accounting

J: Hi. I’m Jim Stice. I’m a professor of accounting at Brigham Young University. This is my brother Kay.

K: I’m ALSO a professor of accounting at Brigham Young University.

J: We have been teaching accounting for a combined total of 70 years.

K: In this course we will start by giving you an overview of the basics of accounting.

J:  We will look at the four basic types of accounting: bookkeeping, financial accounting, managerial accounting, and income tax accounting.

K: We will then go into more depth about financial accounting. We'll explore the financial statements – the balance sheet, the income statement, and the statement of cash flows.

J: We will look at some real examples. You're going to see the actual financial reports of Walmart.

K: Then we'll talk about managerial accounting which is the accounting used inside a company. We'll talk about the costing of products, budgeting, and breakeven analysis.

J: We will also illustrate some real-world applications of the important managerial accounting concept: “You get what you measure.”

K: I'll show you how I have used managerial accounting in my own household, motivating thrifty behavior by my then-teenage sons.

J: Finally, we'll look at income taxes, including the ideas of income tax brackets, deductions, credits, and more.

K: We have designed this accounting course to be self contained, and we carefully explain any terminology that we use.

J: In short, this is an introductory course, with no prior accounting knowledge necessary.

K: Welcome to Accounting Fundamentals!!