OpenStax Principles of Accounting, Volume 1: Financial Accounting

How to use this book

This book is optional. Use it when you want another explanation or more introductory examples. When OpenStax has a close match, the optional-reading list at the end of the course section links to it.

OpenStax is most useful for the accounting cycle, basic financial statements, receivables, long-lived assets, the statement of cash flows, and financial statement analysis. It does not cover every ACC 300 topic in the same depth.

What this book does not replace

OpenStax is a textbook, not accounting authority. Use the FASB Accounting Standards Codification for an authoritative answer under United States generally accepted accounting principles (US GAAP). FASB means Financial Accounting Standards Board. The course section will link to an authoritative source when the distinction matters.

The OpenStax book is an introductory text. For topics such as discontinued operations and the five-step revenue model, use the course reading and the assigned authoritative sources.

Refresh statement preparation and closing

Section 2.1 introduces the statements but starts with a cash-basis example, which records revenue and expenses when cash changes hands. Class 3 uses adjusted accrual-basis amounts instead: revenue when earned and expenses in the periods they belong to, regardless of cash timing. Use Section 4.5 for the closer match to that statement-preparation task.

Sections 4.5 and 5.2 explain statement preparation and the post-closing trial balance. Section 5.1 works closing entries through Income Summary, an intermediate temporary account. The site's basic closing lessons use direct entries to Retained Earnings. Both methods must produce the same ending retained earnings and zero temporary balances.

Choose the section matching the step you want to revisit. You do not need to work through the entire book before using a standalone lesson on this site.