Accounting
Master professional accounting from double-entry bookkeeping to cost accounting and strategic management with Horngren's Cost Accounting as core textbook.
67
Lessons
9
Modules
4
Levels
1
Accounting Foundations
8 lessonsAccounting equation, double-entry bookkeeping, chart of accounts, the accounting cycle, and IFRS vs. GAAP.
- 1 What Is Accounting and Why It Matters The purpose of accounting, who uses financial information, career paths in the discipline, and the distinction between financial and managerial accounting.
- 2 The Accounting Equation Assets = Liabilities + Equity — the foundational equation that governs all of accounting, transaction effects, and the expanded equation.
- 3 Double-Entry Bookkeeping Debits and credits, T-accounts, and the dual nature of every transaction — the system that has kept the books balanced since 1494.
- 4 The Chart of Accounts Account types, numbering systems, and how to organize the master list of every account a business uses.
- 5 The Accounting Cycle Overview The step-by-step journey from raw transactions to polished financial statements — the complete accounting cycle.
- 6 Accrual vs. Cash Basis Accounting Revenue recognition, the matching principle, and the fundamental choice between accrual and cash basis accounting.
- 7 Internal Controls & Ethics Segregation of duties, the fraud triangle, Sarbanes-Oxley, and why ethical standards are the bedrock of the accounting profession.
- 8 Accounting Standards & Frameworks IFRS vs. GAAP, the roles of FASB and IASB, and why global accounting convergence remains an elusive goal.
2
Activity-Based Costing & Allocation
7 lessonsABC systems, customer profitability, sales-variance analysis, support-department allocation, joint costs. Horngren Ch.5,14-16.
- 1 Activity-Based Costing Systems Traditional costing vs. ABC, activity hierarchy (unit/batch/product/facility-level), cost pools, cost drivers, and computing activity rates for accurate product costing.
- 2 ABC Implementation & Management Step-by-step ABC implementation, activity-based management (ABM), cost driver analysis, time-driven ABC, and determining when ABC adds value to the organization.
- 3 Cost Allocation: Customer Profitability Customer profitability analysis using ABC, the whale curve, customer cost hierarchy, managing unprofitable customers, and customer lifetime value considerations.
- 4 Sales-Variance & Revenue Analysis Sales-volume variance, sales-mix variance, sales-quantity variance, market-share variance, market-size variance, and multi-product revenue analysis frameworks.
- 5 Support-Department Cost Allocation Direct method, step-down method, and reciprocal method for allocating support-department costs to operating departments, choosing allocation bases, and practical considerations.
- 6 Common Cost & Revenue Allocation Stand-alone and incremental cost allocation methods, Shapley value approach, common cost allocation principles, revenue allocation with bundled products, and fairness criteria.
- 7 Joint Costs & Byproducts Split-off point, joint cost allocation methods (physical measure, sales value at split-off, NRV, constant gross margin percentage), byproduct accounting, and sell-or-process-further decisions.
3
Budgeting & Variance Analysis
8 lessonsMaster budgets, flexible budgets, direct-cost variances, overhead variances, inventory costing. Horngren Ch.6-9.
- 1 The Master Budget The grand battle plan of the enterprise — how operating budgets, financial budgets, and capital expenditure budgets weave together into a single coherent war strategy.
- 2 Cash Budgets & Pro Forma Statements The treasury report that separates solvent empires from bankrupt ones — cash receipts, cash disbursements, and the pro forma statements that tell the future.
- 3 Responsibility Accounting Dividing the empire into provinces — cost centers, profit centers, and investment centers, each with a governor held accountable for controllable results.
- 4 Flexible Budgets The budget that bends without breaking — adjusting for actual volume to reveal true efficiency, not merely volume-driven noise.
- 5 Direct-Cost Variances Dispatches from the front lines — price variances and efficiency variances for direct materials and direct labor, the battle reports that reveal where resources were wasted or saved.
- 6 Overhead Variances: Variable The shifting sands of variable overhead — spending and efficiency variances for costs that move with volume but never quite as expected.
- 7 Overhead Variances: Fixed The immovable fortress of fixed overhead — spending variances that measure cost control and production-volume variances that measure capacity utilization.
- 8 Inventory Costing & Capacity Absorption costing vs. variable costing — two philosophies of inventory valuation that produce different profits, different incentives, and very different arguments at the board meeting.
4
Cost Terms & Cost Behavior
8 lessonsCost objects, cost drivers, variable/fixed/mixed costs, CVP analysis, cost estimation methods. Horngren Ch.1-3,10.
- 1 The Management Accountant's Role Management vs financial accounting, the value chain, IMA ethical standards, and the cost-benefit approach to decision-making.
- 2 Cost Objects, Cost Drivers & Cost Assignment Direct and indirect costs, cost pools, cost drivers, and the mechanics of cost assignment through tracing and allocation.
- 3 Variable, Fixed & Mixed Costs Cost behavior patterns: variable costs, fixed costs, mixed costs, relevant range, and how costs change with activity levels.
- 4 Cost-Volume-Profit Relationships Contribution margin, breakeven point, target profit analysis, profit-volume graphs, and the margin of safety.
- 5 CVP Analysis: Sensitivity & What-If Sensitivity analysis, what-if scenarios, operating leverage, multi-product CVP analysis, and the effect of sales mix on profitability.
- 6 Determining How Costs Behave Quantitative methods for cost estimation: account analysis, scatter plots, visual fit, and the construction of cost functions from historical data.
- 7 Cost Estimation Methods The high-low method, regression analysis, R-squared, choosing the right estimation method, and data requirements for reliable cost functions.
- 8 Choosing Cost Drivers & Nonlinear Costs Multiple regression, nonlinear cost functions, learning curves, cost driver selection criteria, and advanced topics in cost behavior analysis.
5
Decision Making & Pricing
7 lessonsRelevant costs, make-or-buy, product mix, balanced scorecard, cost-based and market-based pricing. Horngren Ch.11-13.
- 1 Relevant Information for Decisions The art of ignoring the irrelevant — sunk costs, opportunity costs, and the discipline of focusing only on costs and revenues that differ between alternatives.
- 2 Make-or-Buy & Outsourcing The strategist's dilemma — forge your own swords or buy them from the merchant? Insourcing, outsourcing, and the hidden costs of both.
- 3 Product Mix & Constrained Resources When the forge can only produce so many swords per day — maximizing profit under capacity constraints through contribution margin per unit of the scarce resource.
- 4 Strategy & the Balanced Scorecard Four perspectives on a single strategy — translating the emperor's grand vision into financial, customer, process, and learning metrics that cascade from boardroom to shop floor.
- 5 Strategic Profitability Analysis Not all customers are heroes and not all products are treasures — customer profitability analysis, product profitability, and the strategic decisions that follow from knowing who creates value and who destroys it.
- 6 Pricing: Cost-Based Approaches Building prices from the inside out — cost-plus pricing, target rates of return, time-and-materials pricing, and the art of ensuring every product pays for the fortress it shelters in.
- 7 Pricing: Market-Based & Value Engineering When the market names the price and the enterprise must engineer the cost — target costing, value engineering, kaizen costing, and the discipline of working backward from what the customer will pay.
6
Financial Statements
7 lessonsIncome statement, balance sheet, cash flow statement, statement of equity, ratio analysis, and financial interpretation.
- 1 The Income Statement Revenue, cost of goods sold, gross profit, operating expenses, and net income — the financial statement that tells whether the enterprise prospers or perishes.
- 2 The Balance Sheet Current and non-current classification, liquidity ordering, and the financial statement that captures the enterprise at a moment frozen in time.
- 3 The Cash Flow Statement Operating, investing, and financing activities — direct vs. indirect method — the statement that reveals where the cash actually went.
- 4 The Statement of Equity Contributed capital, retained earnings, dividends, and accumulated other comprehensive income — tracking how the owners' stake evolves.
- 5 Financial Statement Analysis: Ratios Current ratio, ROE, debt-to-equity, inventory turnover — the quantitative tools that transform raw financial data into actionable intelligence.
- 6 Horizontal & Vertical Analysis Trend analysis across periods and common-size statements within a single period — the techniques that reveal patterns hidden in raw numbers.
- 7 Interpreting Financial Statements Red flags, reading annual reports, and real-world case analysis — putting all the pieces together to tell the full financial story.
7
Job & Process Costing
8 lessonsJob costing systems, overhead application, process costing (weighted-average & FIFO), spoilage. Horngren Ch.4,17,18.
- 1 Job Costing Systems Job order costing overview, source documents including job cost sheets, materials requisitions, and labor time tickets, plus the complete flow of costs through the system.
- 2 Applying Overhead to Jobs Predetermined overhead rate calculation, applying overhead to individual jobs, selecting allocation bases, and understanding why actual overhead cannot be used in real time.
- 3 Over/Under-Applied Overhead Over-applied vs under-applied overhead, proration vs COGS adjustment, year-end disposition methods, and analyzing overhead variances.
- 4 Process Costing Fundamentals Process costing characteristics, when to use it versus job costing, the concept of equivalent units, and the structure of a production cost report.
- 5 Process Costing: Weighted-Average Method Weighted-average method step-by-step: physical unit flow, equivalent units computation, cost per equivalent unit, and cost assignment to completed units and ending WIP.
- 6 Process Costing: FIFO Method FIFO method step-by-step: separating beginning WIP from current period costs, computing current-period equivalent units, and when FIFO is preferred over weighted-average.
- 7 Spoilage, Rework & Scrap Normal vs abnormal spoilage, accounting for spoilage in job and process costing systems, rework costs and their treatment, and recognizing scrap revenue.
- 8 Hybrid & Operation Costing Operation costing for batches with different materials but similar conversion processes, hybrid costing systems, and guidelines for choosing the right costing approach.
8
Journal Entries & The Ledger
7 lessonsRecording transactions, posting to ledgers, adjusting entries, trial balance, closing entries, and error correction.
- 1 Recording Transactions: Journal Entries The general journal, debit and credit rules in practice, compound entries, and the art of transforming economic events into precise ledger records.
- 2 Posting to the General Ledger Transferring journal entries to ledger accounts, cross-referencing, running balances, and maintaining the organized backbone of accounting records.
- 3 Adjusting Entries Prepaid expenses, unearned revenue, accrued items, and depreciation — the end-of-period entries that ensure financial statements reflect economic reality.
- 4 The Trial Balance Preparing the trial balance, verifying debit-credit equality, and locating common errors before financial statements are produced.
- 5 Closing Entries & Temporary Accounts Revenue and expense closure, the income summary account, retained earnings, and resetting the books for a new period.
- 6 Subsidiary Ledgers & Special Journals Accounts receivable and payable subledgers, sales journals, purchases journals, cash receipts and cash payments journals — managing high-volume transactions.
- 7 Correcting Entries & Error Analysis Common bookkeeping errors, the difference between correcting entries and reversing entries, and the art of bank reconciliation.
9
Performance & Strategic Management
7 lessonsQuality costs, inventory management, capital budgeting, transfer pricing, performance measurement. Horngren Ch.19-23.
- 1 Quality Costs & the Cost of Quality The four armies of quality — prevention, appraisal, internal failure, and external failure costs. Invest in the first two or be conquered by the last two.
- 2 Time as a Competitive Tool Speed kills — the competition. Customer-response time, manufacturing cycle time, throughput, and the financial calculus of being faster than the enemy.
- 3 Inventory Management & JIT The art of having exactly what you need, exactly when you need it — EOQ, safety stock, just-in-time production, and backflush costing for the lean enterprise.
- 4 Capital Budgeting Methods The emperor's long-term wager — NPV, IRR, payback, and the accounting rate of return for evaluating investments that shape the enterprise for decades.
- 5 Capital Budgeting: Advanced Topics When the simple models meet messy reality — inflation adjustments, income tax effects, real options, and sensitivity analysis for capital investment decisions.
- 6 Transfer Pricing When provinces of the same empire trade with each other — market-based, cost-based, and negotiated transfer prices, and why getting it wrong can tear a decentralized organization apart.
- 7 Performance Measurement & Compensation The final reckoning — ROI, residual income, EVA, and the design of compensation systems that align the general's ambitions with the emperor's strategy.