Week 1
Environmental Course code: GST211
Sustainability Topic: Environmental Studies
Course Name
Introduction to Financial
Accounting
Topic: Introduction to Financial Accounting
Week 1
© Copyright 2021 MIVA Open University All Rights Reserved
Week 1
Introduction to Topic: Introduction to Financial Accounting
Financial Accounting
In Summary
This week, you learned that accounting is the “language
of business,” providing a standardised framework for
communicating financial information. You also learned that
financial reporting’s objective is to inform stakeholders about
a company’s financial performance, aiding their economic
decisions. Throughout the lectures, you gained an appreciation
for the power of financial accounting, sparking an interest
in pursuing a career in financial analysis. You learned
about different branches of accounting, such as financial
accounting, management accounting, and tax accounting,
which offer diverse career opportunities. Additionally, you
learned that the accounting process involves recording,
classifying, summarising, interpreting, and communicating
financial information to stakeholders, which enables informed
decision-making. During this lecture, you have gained a
broad understanding of the purpose of accounting and
the importance of financial reporting for stakeholders like
yourself.
Bullet point summary
• Financial accounting is the branch of accounting
that focuses on preparing financial statements
for external users.
• The purpose of accounting is to provide information
about the financial performance and position of
a business.
• The nature, principles, and scope of financial
accounting encompass recording, classifying,
summarising, and reporting financial transactions.
• Users of financial statements include investors,
creditors, management, and other stakeholders
who rely on this information for decision-making.
• The accounting process involves capturing, organising,
summarising, interpreting, and communicating
financial information.
Key references:
© Copyright 2021 MIVA Open University All Rights Reserved
“Thomas, A., & Ward, A. M. (2019). Introduction to Financial Accounting (9th ed.). Mcgraw-Hill
Education. Copyright.
“Warren, C. S., Reeve, J. M., & Duchac, J. E. (2016). Accounting. Cengage Learning.
Week 1
Introduction to Topic: Introduction to Financial Accounting
Financial Accounting
Case study
Title: Assessing XYZ Company’s Financial Objective: The objective of this case study is to
Performance: A Case Study assess how XYZ Company evaluates profitability
through key financial ratios, assesses liquidity
Introduction: This case study aims to evaluate and short-term obligations, analyses financial
XYZ Company’s financial performance in the stability and solvency, and determines efficiency in
electronics manufacturing industry. By analysing managing assets.
its financial statements, this study will provide
Methods: This study involves collecting financial
insights into profitability, liquidity, and overall
statements for the past three years of XYZ
financial health.
company, calculating its relevant financial ratios,
conducting a comparative analysis with industry
benchmarks, interpreting the results, and providing
a comprehensive report enabling stakeholders to
Questions to ponder on make informed decisions.
• Why is financial reporting
important for stakeholders in a
business, and how does it impact
their decision-making?
• How does the accounting process Skills and competencies you have
ensure the accuracy and reliability acquired after this lesson
of financial statements?
Financial literacy, Analytical skills, Communication
• What are the potential skills, Ethical awareness, Attention to detail,
consequences of inadequate Problem-solving abilities, Critical thinking skills,
financial reporting, and why is Knowledge of accounting principles and practises,
ethical behaviour important in the Ability to interpret financial statements, Time
field of accounting? management skills and organisational skills
Personal reflection
Financial accounting provides essential information
for stakeholders to assess a company’s financial
performance and make informed decisions.
Developing skills in financial accounting enables
individuals to analyse financial information and
make sound judgements and decision-making.
© Copyright 2021 MIVA Open University All Rights Reserved Key references:
“Thomas, A., & Ward, A. M. (2019). Introduction to Financial Accounting (9th ed.). Mcgraw-Hill
Education. Copyright.
“Warren, C. S., Reeve, J. M., & Duchac, J. E. (2016). Accounting. Cengage Learning.
