Accounting backgrounds of MBA students in Fuqua's Executive MBA programs are varied. Some students have had little or no exposure to financial accounting principles and financial statements; others have had some, perhaps extensive, experience with financial accounting. To provide an introduction to the basic concepts and techniques of financial accounting to those who have little or no accounting background, and to provide a refresher course for students with some accounting experience, we have developed an accounting tutorial.

The Accounting Tutorial

The accounting tutorial consists of:

(a) A self-paced workbook, Essentials of Accounting, 10th edition (Prentice Hall) by Robert Anthony and Leslie Breitner (available through ).  The workbook consists of a series of "frames" which ask you to answer a question or make a calculation. You should read each frame and answer all the questions. After you complete each part of the workbook, there is a post test (contained in the Exhibits and Post tests). If you have difficulty with the post test, review the frames on the topic. You can get started on the workbook before you access the Online Pre-term Accounting Software, described next.

(b) Online Pre-Term Accounting Software (posted on the Incoming Student Website for incoming students ). This material covers basic concepts such as debits and credits, t-accounts, trial balances, and transaction analysis. Everyone should review it (at least once) prior to the introductory financial accounting course.

(c) Chapters 1-3 from the  textbook Financial Accounting:  An Introduction to Concepts, Methods and Uses, 13th edition, by Stickney, Weil, Schipper, and Francis.  The purpose of reading these chapters is to reinforce the concepts presented in the Essentials of Accounting workbook.  You may find some of the material in these three chapters to be similar to the material in the Essentials of Accounting workbook.  However, be sure to focus on those areas that still seem difficult or confusing. (This textbook will be sent to incoming students before the start of the financial accounting course.)


Note: Depending on your background and familiarity with financial statements, you may wish to approach the tutorial in one of two ways. If you have little or no experience with financial statements, you should go through the tutorial from beginning to end (including the post tests). If you have had formal training in financial accounting principles or significant experience analyzing financial statements in your work, you can probably skim through the tutorial and focus only on those sections least familiar to you, using the post tests to assess your understanding.

What You Should Know

When you have completed all parts of the tutorial, you should be able to perform basic analyses and discuss basic concepts related to financial accounting. You should be able to analyze transactions in terms of their effects on the balance sheet and income statement; you should know the difference between cash flows and net income; and you should be able to compute basic financial ratios. In addition, you should be able to discuss the following questions:

  1. What are the objectives of financial reporting? 
  2. Who are the main users of financial reports? 
  3. What kinds of decisions are based on financial reports? 
  4. Why are financial reports not viewed as sufficient for investor and creditor decision-making (what other kinds of information are also used)?

Using the tutorial materials, you should make yourself familiar with the three basic financial statements, and you should understand how the income statement and the balance sheet articulate (link, fit together). You should be able to distinguish among the balance sheet, the income statement, and the statement of cash flows (what is their purpose, what kinds of information do they contain).

You should be familiar, on a basic level, with the elements of financial reporting:

  1. What is an asset?
  2. What is a liability? 
  3. What is owners' equity (also called shareholders' equity)? What are the components of owners' equity? 
  4. Why does financial reporting distinguish between liabilities and owners' (or shareholders') equity? 
  5. What is revenue? What does it mean to "recognize revenue?" 
  6. How are revenue, expense, cash receipt, and cash expenditure related? 
  7. What is the relation between cash flows and income? 
  8. What are the components of income? Why is income reported in components (disaggregated) instead of just as the "bottom line" number?

In terms of procedures, conventions, and special terminology, you should be able to answer the following:

  1. What is double entry accounting and what is the accounting equation?
  2. What is a debit and what is a credit?
  3. What is a contra account? 
  4. What is accrual accounting? How is it accomplished? What are its advantages? 
  5. What is the difference between recognition and realization?