Lesson 1: Introduction

© KayOne Education, 2015

Introduction

•  Do you know the difference between the Balance Sheet and Income Statement?

•  Have the words ‘Debit’ and ‘Credit’ often haunted you?

•  Do you know what you need to look for in a business before you invest money or buy their stock?

© KayOne Education, 2015

Introduction

•  Interestingly, the single biggest skill in life that could make or break your financial success is not taught in school.

•  Many entrepreneurs run businesses without having a clue on how to read a balance sheet.

•  Business owners are and continue to remain dangerously ignorant of their

numbers and the tax laws.

© KayOne Education, 2015

Did you know?

Small business owners do not review their monthly balance sheets

Small businesses which face a serious financial literacy gap

Single biggest reason why businesses didn’t succeed

© KayOne Education, 2015

Who should attend?

This course is meant for those people:

•  Who know very little on accounting and finance and would like to learn more;

•  Who are managers or entrepreneurs and they regularly receive financial information but are not able to make sense of the numbers; and

•  Who have invested money in businesses or stocks and are not sure how the business is performing financially.

This course is meant for beginners and not for professionals.

© KayOne Education, 2015

What is Accounting?

Account ExplainAccounting ExplanationsActions

Transactions

Language of Business

© KayOne Education, 2015

What is Business?

Joe’s Furniture Factory

$40$10 $75

Managerial AccountingFinancial

Accounting

Tax Accounting

Is my Business

doing well?

Is the Business paying taxes?

How much profits are

they making?

Accurate Profits

Lower Profits

Higher Profits

GAAP

Tax Laws

InternalExternal Govt.

Summary

Introduction

•  Accounting is the process of providing explanations.

•  These explanations are given by recording transactions.

•  It is thus called the “language of business”.

•  In any business there are three stakeholders.

•  For each stakeholder the type of information required is different and hence the accounting is different.

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