Learning Outcome Statements

1. The Classification of Business Activities

a. describe how business activities are classified for financial reporting purposes;

2. Financial Statement Elements and Accounts

b. explain the relationship of financial statement elements and accounts, and classify accounts into the financial statement elements;

3. Accounting Equations

c. explain the accounting equation in its basic and expanded forms;

4. Effects of Transactions on the Accounting Equation

d. describe the process of recording business transactions using an accounting system based on the accounting equation;

5. Accruals and Valuation Adjustments

e. describe the need for accruals and valuation adjustments in preparing financial statements;

6. Financial Statements

f. describe the relationships among the income statement, balance sheet, statement of cash flows, and statement of owners' equity;

7. Flow of Information in an Accounting System

g. describe the flow of information in an accounting system;

8. Using Financial Statements in Security Analysis

h. describe the use of the results of the accounting process in security analysis.