Financial Accounting from edX

Accounting is the language of business. It is difficult to understand business without knowing some accounting. Knowing accounting will help learners better understand and contribute to their own companies and better understand business around them. This course also helps students use the financial statements to gather inputs to valuation models and for corporate finance decisions.

Financial Accounting is part of the MicroMasters® Program in Finance. It provides a rigorous introduction to the principles of financial accounting. We focus on the preparation and analysis of financial statements, and on why financial statements take the form they do. We cover the basic structure of financial reports and the process of recording transactions. We will also learn how investors, creditors, and other users analyze financial statements to assess corporate performance. The course focuses on using the financial statements to gather inputs to valuation models and for corporate finance decisions.

This course offers general managers, financial analysts, financial advisors, quantitative researchers, asset managers, risk managers, quantitative developers working in financial services, professionals servicing the financial industry the tools to succeed. Undergraduate and graduate students looking to enter business in general or finance in particular would also benefit greatly from this valuable course.

What's inside

Learning objectives

Understand accounting terms
Understand how financial statements are constructed

Ability to read financial statements
Gather inputs to valuation models and for corporate finance decisions

Understand accounting terms
Understand how financial statements are constructed
Ability to read financial statements
Gather inputs to valuation models and for corporate finance decisions

Syllabus

The course is organized as four parts:

A. Introduction; Assets

Week 1: Accrual Accounting,

Week 2: Revenue Recognition; Receivables

Week 3: Inventory; Property, Plant, and Equipment

Week 4: Intangible Assets; Income vs. Cash Flows

Module 5: Acquisitions; Finance Investments

B. Financial Statement Analysis (FSA)

Week 6.1: Introductory FSA

C. Liabilities and Stockholders' Equity

Week 6.2: Income Taxes

Week 7: Long-Term Debt; Leases

Week 8: Stockholders’ Equity and Earnings per Share

Week 9: Accounting for Banks

E. Review; Accounting for Valuation

Week 10: Tesla case

We base this course on many years of courses we and our MIT colleagues have taught in previous years to MIT graduate students.

Good to know

Know what's good

, what to watch for

, and possible dealbreakers

Suitable for students and professionals in finance and business who need a deeper understanding of financial accounting

Covers the basics of financial accounting, financial statement preparation and analysis, and the use of financial statements in valuation and corporate finance decisions

Taught by instructors with extensive experience in teaching financial accounting at the graduate level

Provides a strong foundation for those seeking to enter business or finance, or for those looking to enhance their financial literacy

May require some prior knowledge of accounting concepts for optimal understanding

Does not cover advanced financial accounting topics, such as consolidation or international financial reporting

Activities

Be better prepared before your course. Deepen your understanding during and after it. Supplement your coursework and achieve mastery of the topics covered in Financial Accounting with these activities:

Review Accounting Standards

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Stay up-to-date with the latest accounting standards to ensure your knowledge is current and comprehensive.

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Identify the relevant accounting standards applicable to your industry and location
Read and comprehend the key provisions of the standards
Review examples and illustrations provided in the standards to enhance understanding

Review Financial Terms

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Refresh your memory of the terminology of accounting practices and principles to prepare for success in this course.

Browse courses on Financial Accounting

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Create a list of accounting terms you should know
Create flashcards for each term and key concept
Review your flashcards regularly, try the spaced repetition technique

Attend Industry Events

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To enhance understanding of accounting and connect with professionals, attend industry events or conferences focused on accounting or finance.

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Identify industry events or conferences that align with your interests
Register for the event and plan your attendance
Engage with speakers, attendees, and exhibitors
Follow up with new connections

Four other activities

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Analyze Financial Statements

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To master financial accounting, regular practice in analyzing various financial statements is essential.

Browse courses on Financial Statement Analysis

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Start by gathering financial statements of publicly traded firms that you are interested in
Analyze and interpret the income statements, balance sheets, and cash flow statements
Use accounting ratios to evaluate the financial health

Tutor Fellow Students

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Help reinforce your knowledge by assisting fellow students who may be struggling with concepts in financial accounting.

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Identify classmates who may benefit from tutoring
Offer your assistance and set up regular tutoring sessions
Review financial accounting concepts and explain them in clear and simple terms
Provide practice problems and guidance

Build a Stock Valuation Model

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To connect accounting with practical applications in corporate finance, you can build a valuation model based on a real business' financial statements.

Browse courses on Valuation Models

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Choose a company that you are interested in
Gather the financial data of the company
Select an appropriate valuation method
Build the valuation model using a spreadsheet
Present and explain your model and valuation to others

Contribute to Accounting Open Source Projects

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Engage with the broader accounting community by contributing to open-source projects related to financial accounting.

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Identify open-source projects in the field of accounting that align with your interests
Review the project's documentation and codebase
Identify areas where you can contribute your skills and knowledge
Submit your proposed contributions to the project maintainers for review
Collaborate with other contributors to refine and merge your contributions

Career center

Learners who complete Financial Accounting will develop knowledge and skills that may be useful to these careers:

Corporate Controller

Corporate Controllers are responsible for overseeing the accounting and financial reporting for a company. They need to have a deep understanding of accounting principles and financial statement analysis to ensure that a company's financial statements are accurate and fairly presented. This course can help build a foundation in accounting and financial statement analysis for Corporate Controllers.

See salaries and explore the career path for Corporate Controller

Auditor

Auditors evaluate the financial records of companies to ensure that they are accurate and fairly presented. They need to have a deep understanding of accounting principles and financial statement analysis to conduct an effective audit. This course can help build a foundation in accounting and financial statement analysis for Auditors.

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Certified Public Accountant (CPA)

CPAs are responsible for auditing financial statements for companies. They need to have a deep understanding of accounting principles and financial statement analysis to ensure that a company's financial statements are accurate and fairly presented. This course can help build a foundation in accounting and financial statement analysis for CPAs.

See salaries and explore the career path for Certified Public Accountant (CPA)

Forensic Accountant

Forensic Accountants investigate financial crimes and fraud. They need to have a deep understanding of accounting principles and financial statement analysis to uncover financial wrongdoing. This course can help build a foundation in accounting and financial statement analysis for Forensic Accountants.

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Financial Planner

Financial Planners help individuals and families plan for their financial future. They need to understand accounting principles and financial statement analysis to make recommendations on investments and financial plans. This course can help build a foundation in accounting and financial statement analysis for Financial Planners.

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Quantitative Analyst

Quantitative Analysts use mathematical and statistical techniques to analyze financial data. They need to have a strong understanding of accounting principles and financial statement analysis to extract insights from financial data for investment and trading decisions.

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Tax Accountant

Tax Accountants are responsible for preparing tax returns for individuals and businesses. They need to have a deep understanding of accounting principles and financial statement analysis to ensure that tax returns are accurate and compliant with tax laws. This course can help build a foundation in accounting and financial statement analysis for Tax Accountants.

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Financial Analyst

Financial Analysts spend their days researching and evaluating financial data. They use this to make recommendations on investments and make financial plans. They need to be able to read and understand financial statements to make these recommendations. This course can help build a foundation in accounting and financial statement analysis for Financial Analysts.

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Financial Advisor

Financial Advisors help individuals and families plan for their financial future. They need to understand accounting principles and financial statement analysis to make recommendations on investments and financial plans.

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Portfolio Manager

Portfolio Managers manage investments for individuals and institutions. They need to be able to read and understand financial statements to assess the financial health of a company and to make investment decisions. This course can help build a foundation in accounting and financial statement analysis for Portfolio Managers.

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Investment Banker

Investment Bankers help companies raise money by issuing debt or selling stock. They need to be able to read and understand financial statements to assess the financial health of a company and value it for a potential deal. This course can help build a foundation in accounting and financial statement analysis for Investment Bankers.

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Credit Analyst

Credit Analysts evaluate the creditworthiness of borrowers. They need to have a strong understanding of accounting principles and financial statement analysis to assess a borrower's financial risk.

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Risk Manager

Risk Managers assess and manage financial risks for companies. They need to have a strong understanding of accounting principles and financial statement analysis to identify and mitigate financial risks.

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Data Analyst

Data Analysts analyze large datasets to identify trends and patterns. They need to have a strong understanding of data analysis techniques and accounting principles to extract meaningful insights from financial data. This course can help build a foundation in accounting and financial statement analysis for Data Analysts.

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Business Consultant

Business Consultants advise companies on how to improve their operations and performance. They need to have a strong understanding of accounting principles and financial statement analysis to assess a company's financial health and make recommendations.

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