Financial

Accounting Basics
with Kim Fatten
Introduction
Name: Kim Fatten, CPA, ChFC & ABD
Occupation: CPA and College Professor

Im here to help you understand financial

accounting basics so that you can
Figure out accounting
Just learn more
Better run your business
Get some outside class help
_____ (your reason here!)
Overview
Forms of Business Ownership
Introduction to the four basic Financial
Statements
Financial Accounting Framework
Basic Financial Statement Analysis
Business
Definition:
Regular Occupation
Engaging in Commerce
An organization or system where goods &
services are exchanged, bartered or sold for
money
Types of Business
Sole Proprietorship: One person (or two people,
married to each other) in business with no formal
structure
Private Corporation: Small, exclusive group; not
just anyone can own the corporation
Non-profit Corporation: Operates with less
emphasis on profit; usually a social mission
Corporation: owned by many, publicly traded on a
stock exchange with fewer limits to ownership

(Partnerships, LLCs, S-Corps are for another day!)

Accounting

Defined:
the process of identifying, measuring
and communicating economic
information to permit informed
judgements and decisions by users of
the information
- American Accounting Association
Accounting

A process to organize, summarize and

communicate the financial well-being of a
business or organization to all interested
parties
Accounting Principles

GAAP: Generally Accepted Accounting

Principles
Rules for recording business transactions
Everyone plays by the same rules
Accounting Communication

Owners
Investors
Creditors
Employees
Regulators
Thank you