Using Excel for Accounting: Basic Accounting Functions

Name: Using Excel for Accounting: Basic Accounting Functions
Author: Bob Akbar

Understand how to create and evaluate basic accounting reports in Excel

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Course: On-Demand

Hello, my name is Bob Akbar, and in these lessons you will learn basic accounting functions. In this lesson, we will discuss income statements, both the normal and profit and loss, for budgeted income statements. As you will notice, we have this example from Microsoft's and this is Microsoft's actual income statement that we are using. And as you can see, they have the years listed. They have their categories listed, and some of the things to look for is we are looking for totals. So what we're going to do is highlight those. So what we're looking for is just like the statement says, it's an income statement, we're looking for total revenue and total income. Those are the two things we are concerned with, and they break it down further into our products, services, research and development, sales and marketing, and things like that. Where is the cost going that's being deducted from the total revenue, and how do we end up with a net income? The purpose of us having multiple worksheets in our workbooks is so that we can summarize these in the standard, internationally-acceptable method so that people can compare our company to other companies. Now let's take a look at the profit and the loss. Here is a look at the profit and loss, and you can see it describes it right here, "This worksheet calculates total sales for each month and year, total annual sales," and you can put in the different numbers in here, and you can see the profit and loss projection. Some people use this in the place of the income statements. It depends on what is acceptable in your industry and what you need for your reporting purposes. This is pretty straightforward. Here's how much sales we've had, here's how much it costs us, and here is the expenses broken down. And you see, it's very, very similar to the income statements. That's why they're interchangeable, and it all depends on which regulatory source you have or what is the acceptable way of doing things in your industry. Same categories, same things, same expenses, you can see everything's in there in the same way. It's just laid out differently for the purposes of the people viewing it. And here we are, for example, we're talking about administration. There's general and administrative right here. Expenses are deducted just the same way. They have three spreadsheets to show this. We have one spreadsheet that shows it in a more summarized manner. Now, some of the things that we are going to look for is the earnings per share. If you are a larger publicly-traded company or even a smaller company that has shares outstanding, one of the key values that shows up here, it is your earnings per share, and all these calculations, they're pretty straightforward until we get to that point. As you can see, all they've done is they've added these numbers up to get the total revenue. They've deducted these numbers from the total revenue to get the net income, and then what they've done is they've taken that and divided it by the number of outstanding shares to give us the basic or the diluted values. I won't get too deep into those and what those mean. It's basically a voting, at first preference, was the company to be liquidated. That's all that means, basically, diluted for our purposes. Thank you for watching. Stay tuned for the next lesson where I will show you balance sheets.

Intermediate Provider : Bob Akbar 3 Lessons · 20m in Arabic, German, English, Spanish, French, Portuguese, Chinese

Course Description

One of the main aims of accounting is to create accurate Financial Statements. By compiling financial data into these summaries, companies can provide compliance and reporting to regulatory agencies and creditors. These statements also give stakeholders essential information for judging the success and direction of the company. In these lessons we will explore how you can use Excel formulas and functions to break down Financial Statements into smaller areas of focus. This can help the user to understand areas that may require a closer review. By having this kind of detail available in other worksheets, management and other stakeholders can review, seek goals, and make recommendations to improve the functioning of the company.

In this course, we will explore how Excel can help you to prepare and evaluate the Basic Accounting Functions of Income Statements, Balance Sheets, and Statements of Cash Flow. We’ll look at how these can help break down financial data and allow you to draw more accurate conclusions about your company’s finances.

What You'll Learn

Define the three basic financial statements: Income Statements, Balance Sheets, and Statements of Cash Flow
Use Excel formulas and functions to perform basic accounting functions
Analyze data within accounting statements to draw more accurate conclusions about company finances
Break down financial statements into smaller areas of focus for closer review
Prepare and evaluate income statements, balance sheets, and statements of cash flow in Excel

Key Takeaways

One of the main aims of accounting is to create accurate financial statements that support compliance and reporting to regulatory agencies and creditors.
Financial statements give stakeholders essential information for judging the success and direction of a company.
Excel formulas and functions can break financial statements into smaller areas of focus, helping users identify areas that may require closer review.
Making detailed financial data available in separate worksheets lets management and stakeholders review results, set goals, and recommend improvements.
The course covers three basic accounting functions: income statements, balance sheets, and statements of cash flow.

Frequently Asked Questions

What does this course cover?

It explores how to use Excel to prepare and evaluate the basic accounting functions of income statements, balance sheets, and statements of cash flow, breaking financial data into smaller areas of focus to draw more accurate conclusions about a company's finances.

What skills will I gain from this course?

You will build skills in accounting, accounting analysis, balance sheet analysis, basic accounting functions, basic accounting principles, and Microsoft Office accounting.

What topics are taught in the lessons?

The course lessons cover Income Statements, Balance Sheet, and Statement of Cash Flows.

What are the learning objectives of this course?

By the end, you will be able to define the three basic financial statements, understand basic accounting functions in Excel, and analyze data in accounting statements.

How can Excel help with financial statements in this course?

Excel formulas and functions help break down financial statements into smaller areas of focus, making it easier to spot areas that may require a closer review and to make recommendations to improve the functioning of the company.