Week 2 · Readings & resources

Week 2 — Readings & Resources

Financial Accounting Free sample edition

Your primary reading is Chapter 2 (in this module). Everything below is the optional, go-deeper layer — pick what helps, skip the rest.

How to use this page

This page has 10 items (4 readings and 6 videos). Allow 61–76 minutes for everything. Each group points back to the matching chapter section and class-session segment, so use the full menu when you want more depth, or take the quick path below.

Every video here has captions: turn them on with the CC button in the player. The chapter covers the same ideas in text.

Pick-one quick path (20–25 min total)

① What a business has, what it owes, and what is left for the owners

Chapter 2, Section “Assets and liabilities: list what the shop has and what it owes” · Session 1, Segment 1, “Assets, liabilities, and stockholders' equity” · Remember: an asset is something the business controls that will help it later, and a liability is something it must hand over to someone else.

Accounting equation explained — The Finance Storyteller — a four-minute tour of the equation through one startup: the founders' cash, inventory bought on credit, a sale on credit whose profit lands in retained earnings, and a delivery van bought for cash, with the totals checked after each step. It describes equity as what the company owes its shareholders; the course reads equity as the owners' residual claim, not a debt. Its dollar amounts are the video's own example, not the course's. (video, 4 min) (captions: creator)
Assets vs Liabilities — The Finance Storyteller — a six-minute sort of everyday items onto the two sides of a balance sheet: a machine, accounts receivable, cash, and inventory as assets, and accounts payable and a bank loan as liabilities, with equity worked out as total assets minus total liabilities. Watch through the business examples; the second half turns to return on assets, the cost of borrowing, and personal finances, which this course does not cover. It describes assets as what a company owns; the chapter's test is wider, something the business controls that will help it later. It calls equity shareholder capital, the same idea as the chapter's stockholders' equity. (video, 6 min) (captions: creator)
Beginners' Guide to Financial Statements — U.S. Securities and Exchange Commission — the regulator's plain-language guide; read the balance sheet part, which states assets = liabilities + shareholders' equity and describes equity as what is left for the owners after the liabilities. Shareholders' equity is the same idea as the chapter's stockholders' equity. Skip the later parts on the other statements and ratios for now. (reading, 15–20 min)
Manage your finances — U.S. Small Business Administration — the agency's small-business guide; read the opening parts on bookkeeping and the balance sheet, which it calls a snapshot that tracks assets, liabilities, and equity. Use it while working through the Week-2 module overview, to picture who keeps these lists in a real small business. (reading, 5–8 min)

② Revenues, expenses, and dividends move the owners' claim

Chapter 2, Section “Retained earnings: see what raises it and what lowers it” · Session 1, Segment 2, “The equation and retained earnings” · Remember: revenues raise retained earnings, while expenses and dividends lower it, and a dividend is a payment to owners, never an expense.

How does profit impact The Accounting Equation? (Explained with examples) — The Accounting Student — a five-minute sequel to the delivery-business example in group ③: goods bought on credit, a cash sale at a profit that raises the owner's claim, the week's expenses that lower it, and cash the owner takes out for personal use, with both sides totaled at the end. It uses British terms, pounds, capital, and drawings, where the chapter says dollars, stockholders' equity, and dividends; selling goods at a profit is the kind of business Week 6 takes up, so watch here only how profit and payouts move the owners' claim. (video, 5 min) (captions: creator)

③ Walking transactions one at a time

Chapter 2, Section “Walk the twelve transactions of Month 1” · Session 2, Segment 3, “Transaction analysis on Dataset A” · Remember: ask what happened, which accounts change, in which direction, and whether the equation still balances.

Business Transactions Explained (What Gets Recorded in Accounting?) — Simplified Sphere — a five-minute animated lesson on the first of the four questions, what happened: it defines a business transaction as an event that changes the business's financial position, sets aside plans, intentions, and ideas that have changed nothing yet, and gives a three-part test (did an event occur, does it change what the business owns or owes, can it be measured in money) before sorting three short examples. It ends by pointing to the chart of accounts, which Week 3 takes up. (video, 5 min) (captions: automatic)
Understanding the Accounting Equation — Accounting with Audra — a five-minute walk through three transactions: a car bought for cash, where one asset rises and another falls; the same car bought with a loan, where an asset and a liability both rise; and a pair of shoes sold for cash, where an asset and equity both rise. It then notes that paying a cost either uses up an asset or adds a liability, and solves for equity when assets and liabilities are known. Match each example to one of the chapter's five patterns. Her mentions of debits and credits look ahead to Week 3; here, follow only which parts of the equation change. (video, 5 min) (captions: creator)
How transactions affect The Accounting Equation? (With examples) — The Accounting Student — a three-minute example of a new delivery business: the owner's money in, a van bought for cash, and a bank loan, with both sides compared after each step. It uses British terms, pounds and capital, where the chapter says dollars and stockholders' equity. (video, 3 min) (captions: creator)
What kind of records should I keep — Internal Revenue Service — the IRS's list of the supporting documents behind each transaction, such as sales slips, paid bills, invoices, and deposit slips, grouped into gross receipts, purchases, expenses, and assets. Read it as the paper trail for the first of the four questions, what happened. This builds on Week 1's work on the corporation as an entity separate from its owners: these are the business's records, kept apart from anyone's personal ones. (reading, 5–8 min)

Optional one-stop reference (free online reference)

Publication 583, Recording Business Transactions — Internal Revenue Service — the IRS guide for new businesses, deep-linked to the part on recording transactions; read the paragraphs on the business checkbook and on keeping the business account separate from a personal one, and skim the rest. (reading, 8–12 min)

Heads-up (links rot): these point to outside sites that occasionally move or rename pages. If a link ever fails, tell your instructor and use the reference above in the meantime.

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