Accounting I

 © John Petroff

Financial Accounting



This course is a review of the fundamental concepts of accounting. The focus is on financial statements that a firm prepares each year. How entries are recorded in accounts to capture all economic activity of the firm is explained. How accounts are organized and what transtactions are entered there, are studied. Year end entries and the accrual. method of accounting are described.


After completing this review course the student should have an adquate understanding of
- how the financial position of a firm is represented in its financial statement
- how most common transactions are handled
- why the accrual method of accounting is useful to reflect the financial position of the firm
- the importance of organizing an accounting system that meets the needs of the firm
- what the income statement and balance sheet represent

Organization of chapters:

Chapter 1: Introduction
Chapter 2: Accounting Cycle
Chapter 3: Accounting Cycle (Continued)
Chapter 4: Merchandising Firm Accounting
Chapter 5: Financial Statements
Chapter 6: Accrual and Deferrals
Chapter 7: Accounting Systems
Chapter 8: Cash
Chapter 9: Receivables
Chapter 10: Inventory
Chapter 11: Fixed Assets
Chapter 12: Current Liaiabilities

The list of chapters always appears on the left side of the screen so that one can quickly move from chapter to chapter when necessary.

Design of content:

The course is written for a rapid review of material that was previously studied. The text is short, but almost every word counts. The content is not designed for approaching the subject matter for the first time: it can be used only as a study guide for an introductory course in economics which must otherwise have a complete text.

Studying approach:

One would normally read the text starting from chapter 1 and move on to each subsequent chapter as the material builds on concepts presented in previous chapters. One is urged to take careful notes as explained in studying recommendations.

After reading the text, the student is urged to use the review quizzes present at the end of each chapter. The quizzes test the knowledge of each concept in the chapter with the ability to link back to the chapter if it is not clear why the correct answer is what it is.


Taking the comprehensive test available at the end of the course should give a good assessment of the overall knowledge of course content. Because this content is fundamental for business studies a grade of 70 correct answers out of 100 is the very minimum that any student should achieve. If one does not achieve close to that, it is strongly recommended that a full text introductory course be used to clarify concepts misunderstood from this review course. For a complete introductory course, the provided comprehensive test is not sufficient for student evaluation. Written assignments should be required.

One should note that the comprehensive test does not allow linking back to the underlying text. Although the questions and the answers in all tests are randomized to avoid memorizing correct answers (rather than underlying concepts), this comprehensive test is inferior to review quizzes for learning purposes. The comprehensive test is only designed for a quick overall evaluation. Moreover, because the test taking is not proctored and the student can use his/her notes, the reliability of the grade has some limitations.

The comprehensive test can be taken several times, and only the last result will count. Nevertheless, you are advised to take the comprehensive test seriously if you plan to use its results for further studies. The grade of the comprehensive test is entered into the public record if you register for the course.

See typical grade composition.

Registration and enrollment recommended:

We recommend that you register as a PEOI student, and enroll in fundamental courses as well as professional courses if you plan to study the content of these fundamental courses. By registering and enrolling you will have two major useful outcomes. First, once you sign in, the time and grade in each chapter will be recorded in a personal record seen only by you and your instructor (if you choose to have an instructor). This record will show your progress in the course and your instructor can offer suggestions for improvement (if necessary). Second, the combined result of your quizzes and comprehensive test will be entered in the public record and give you the ability to use this grade as proof of knowledge of the course content.

To register simply fill out the registration form which is accessible through the Registration menu. There is no fee. The information is kept strictly confidential.

To enroll for this course (if you did not select it when you first registered), choose Accounting I as the course in which you want to enroll in student enrollment.

Questions or comments:

Your comments, corrections and suggestions are most welcome: please email them to or you may contact us directly.


Go to Chapter 1: Introduction