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Accounting Allah shmoop no accounting for taste Well welcome to

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the wonderful woolly world of accounting Hope everyone brought their

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beans just so there's no you know Gap in your

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understanding we're going to start by slinging a dozen or

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so industry jargon in terms that you don't worry about

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comprehending him fully just yet For now let him just

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soak into your skull and begin moisturizing your frontal lobe

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You'll encounter them many more times between now and then

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at the end of this course So if they don't

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fully sit with you No problemo All right first up

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gap And no it's not where you shop Gaffe is

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arguably the most important concept in accounting so you should

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at least be able to spell it Why so important

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Well because easy accountants being oh so clever could easily

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fudge are fake numbers so that profits aren't really profits

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Along comes gap Yeah the overall gist of it Or

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generally accepted accounting principles Gap That's what gap stands for

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is that you should be conservative in your accounting estimates

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Better toe under promise and over deliver next up accounts

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payable It's what you owe You bought four thousand clay

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mugs with swear words on them that you hope to

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resell it Your carnival for five bucks each you agreed

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to pay the swear cup vendor quote net thirty unquote

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or thirty days later The four grand you owe her

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Yeah That now is an account payable on her books

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That four grand shows up as an account receivable because

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it's owed or received Hubble from you do to her

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thirty days after you signed on the stupid dotted line

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Okay assets here's an ass And if you own it

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it's an asset Another asset Well the forty three computers

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you've bought over time the patents Dow Chemical offered to

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pay you forty three point seven million dollars to buy

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from you last week The six point eight million dollars

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of cash you have in your Wells Fargo account The

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four hundred twelve shares of Amazon your company got in

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return for sharing drone intelligence with them Yeah all those

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assets Okay What about liabilities All right well you borrowed

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thirty two million dollars from the mob to begin your

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Internet gambling business With sports betting still being illegal the

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thirty two million dollars is a liability that well you

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know you'd better pay The part of that debt that

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you owe within the next year is a current liability

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Dough you owe more than a year away is called

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a long term liability All right moving on equity equity

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is the ownership of your company It's the assets It's

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the value of it It's the milk your cow has

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produced over time and which sits in the vault as

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cheese representing some form of the balance sheet equation lovingly

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referred to as drunks around the world calling yes ale

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or assets minus liabilities equals equity All right now let's

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talk financial statements here moving on the day to day

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tracking of a company's profitability as driven by revenues Less

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expenses Yeah that's called an income statement otherwise lovingly known

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as a profit and loss statements Then there's the balance

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sheet That ale thing lives at the bottom right of

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the balance sheet refrigerator there and the balance sheet is

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a representation of the balance of assets you have against

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well bills you owe like the liabilities and that net

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number being the equity your company has produced right Ale

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All right the big true ING mechanism in accounting is

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fash flow because it's so hard to hide or lie

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or cheat or deceive cash in one form or another

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anyway Often gap accounting rules require noncash charges to be

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categorized as expenses such that the accounting earnings of a

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company often differ greatly from the actual cash production or

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cash earnings of the company Well capital expenses and contractual

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obligations that might have been paid for in cash in

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advance have to then be depreciated or amor ties in

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the years subsequent to their signing when the cash flowed

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out in the years subsequent to their signing after the

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cash has already flowed out So those items show up

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as charges on the income statement But in fact they

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are non cash So the cash flow statement is the

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third leg of the stool of the three primary accounting

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documents along with the income statement and balance sheets And

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it's a necessary evil to track the production of cash

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from those three primary sources AII cash generated or consumed

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from operations That's one part of cash flow The second

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is cash raised from financing activities And or then there's

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a third one here Cash raised or lost from investing

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activities in all three year tracked copiously like Big Brother

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lives If you really dig all this stuff look hard

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at doing away with the free throw practice after school

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And instead well why not dive into accounting Top professional

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accountants lovingly designated certified public accountants or CPS make very

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nice money way more than high school basketball coaches and

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have endless freedom with the way in which they use

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their time except around tax season At which point do

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out there pretty much chained to a desk with empty

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Snapple bottles nearby waiting to be filled So as we

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mentioned this is just a super cursory sampling of a

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few of the key terms You're going to learn toe

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love by the end of this course and well it's

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a long course So chain yourself to your desk Allah

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that c p a And have your own assortment of

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Snapple bottles at the ready and I will help you 00:05:15.02 --> [endTime] account for them

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