Finance and Accounting

The field, part by part

Each topic says why it exists and what it rests on; the order is the order a newcomer would take.

1. Accounting and bookkeepingDouble-entry, ledgers, the three statements and the reporting frameworks (IFRS, US GAAP): the base of ACCA Financial Accounting, AAT Levels 2 to 4 and CPA FAR; bookkeeping software (QuickBooks, Xero) is where most people meet it.Includes Audit
2. Management accounting, budgeting and FP&ABudgets, forecasts, costing and variance analysis: what the CMA examines and ACCA Management Accounting and Performance Management teach; financial planning and analysis is the same work inside a corporate finance team.
3. Financial statement analysis and modellingReading the three statements and rebuilding them in a spreadsheet: the CFA topic Financial Statement Analysis and the core of CFI's FMVA, whose curriculum weights modelling at 35 % and accounting at 20 %.
4. Corporate finance and valuationTime value of money, cost of capital, capital structure, DCF and comparables: the CFA topics Corporate Finance and Equities, ACCA Financial Management and Advanced Financial Management, FMVA's valuation modules; where the field's fundamentals courses start.
5. Personal finance and financial planningBudgeting, saving, credit, insurance, pensions and estates for a household: the CFP Board's eight Principal Knowledge Domains give the professional map; CISI's Level 2 Fundamentals the entry point for people who will work in the sector.
6. Investing and portfolio managementAsset classes, risk and return, diversification and portfolio construction: the CFA topics Equities, Fixed Income, Alternative Investments and Portfolio Construction; CFP's Investment Planning domain.Includes Trading
7. Crypto-assets and blockchainDistributed ledgers, keys and wallets, smart contracts, tokens and DeFi: the technical side rests on the Bitcoin and Ethereum documentation, the consumer side on the FCA's warning that a crypto investor should be prepared to lose everything.
8. Financial risk, regulation and complianceMarket, credit, operational and liquidity risk, Basel, AML and KYC and conduct rules: FRM Parts I and II, the CFA's Ethical and Professional Standards, CFP's Professional Conduct and Regulation; where finance meets the law.Includes Insurance
9. Banking, fintech and paymentsDeposits, lending and credit analysis, payment systems, cards and open banking: the UK Payment Systems Regulator's eight designated systems name the rails, CFI's CBCA the credit analyst's job; the field's newest titles live here.
10. TaxIncome, corporate, VAT and sales tax, capital gains and returns: CPA REG and the TCP discipline, ACCA Taxation and Advanced Taxation, CFP's Tax Planning domain; the one finance topic every adult meets.
11. EconomicsSupply and demand, national accounts, inflation, interest rates, monetary and fiscal policy: the CFA topic Economics; the macro context every other finance topic assumes.

Concepts to know

Glossary entries of this field.

• Accruals

  Under the accruals basis, income and expenses belong to the period in which they are earned or incurred rather than the one in which cash moves; an accrual is the adjusting entry for a cost incurred or income earned that has not yet been paid or invoiced.

• AML

  The laws, controls and supervision that keep criminal proceeds from being passed through the financial system to look legitimate: identifying customers, understanding their activity, monitoring transactions and reporting suspicion, to the international standard set by the Financial Action Task Force's Recommendations.

• Asset allocation

  How an investment portfolio is divided between asset classes such as shares, bonds, property and cash, chosen to fit the investor's time horizon and capacity to bear losses; it sets the portfolio's broad risk and return profile before any individual holding is picked.

• Cash flow

  Movement of cash and cash equivalents into and out of an entity over a period; IAS 7 reports it in three groups, operating, investing and financing, so readers can see whether the business funds itself from trading or from selling assets and raising money.

• Compound interest

  Interest worked out on the original sum and also on the interest already added to it, so the balance grows by a larger amount each period; the more often interest is credited and the longer the term, the stronger the effect.

• Derivative

  A contract whose value tracks a named underlying variable, such as an interest rate, share price, commodity price or currency, which needs little or no money up front compared with buying the underlying outright, and whose settlement falls due later.

• DCF

  A valuation method that estimates what an asset or company is worth today by forecasting the free cash it will generate, adding a terminal value for the years beyond the forecast, and discounting both at a rate that reflects their risk.

• Diversification

  Spreading money across holdings whose prices do not all move together, within an asset class and between classes, so that a loss in one position is partly offset elsewhere and no single failure decides the outcome for the whole portfolio.

• Double-entry bookkeeping

  A recording method in which every transaction is entered at least twice, as a debit to one account and an equal credit to another, so that total debits always equal total credits and the ledger checks its own arithmetic.

• EBITDA

  Earnings before interest, taxes, depreciation and amortisation: net profit with financing costs, tax and the non-cash charges for using up tangible and intangible assets added back, used as a rough gauge of operating earnings across companies financed in different ways.

• Financial statements

  Financial statements are the structured report of an entity's financial position, performance and cash movements over a period; under IFRS the complete set is a statement of financial position, a profit or loss and comprehensive income statement, a statement of changes in equity, a cash flow statement and notes.

• Index fund

  A pooled fund, whether a mutual fund, an ETF or a unit investment trust, that aims to match the return of a chosen market index, before fees, by holding the securities in that index rather than selecting investments on a manager's judgement.

• Leverage

  Using borrowed money, or instruments that need only a small deposit, to control a larger position, so that gains and losses are measured against a smaller base of one's own capital; also the ratios, such as debt to equity or a bank's capital to exposures, that measure it.

• NPV

  The sum of a project's expected cash flows, each discounted to today at the required rate of return, minus the initial outlay; a positive result estimates the value the project adds to the firm, and a negative one the value it would destroy.

• Open banking

  An arrangement, grounded in law and shared technical standards, under which customers can let an authorised third party read their bank account data or start payments from their account through secure interfaces, without ever handing over their banking login details.

• Time value of money

  The principle that a sum available now outweighs an equal amount received later, because money in hand can be invested to earn a return; present and future values are linked through an interest or discount rate and the number of periods between them.

• WACC

  WACC blends the returns a company's lenders and shareholders require, each weighted by its share of the capital structure, with debt counted after tax; it is the rate for discounting firm-level cash flows and the usual benchmark for new investment.

• Working capital

  The difference between current assets and current liabilities: the short-term resources, such as cash, receivables and inventory, that remain once obligations falling due within the operating cycle or the next twelve months are set against them.

Certifications that test it

Vendor exams and free certificates; facts, cost and the preparation path are on each page, and the certifications hub has them all.

• ACCA (Association of Chartered Certified Accountants) · Proctored examACCA Qualification
• IMA (Institute of Management Accountants) · Proctored examCertified Management Accountant (CMA®)
• CFA Institute · Proctored examCFA® Program Level I
• CFP Board · Proctored examCFP® certification (CERTIFIED FINANCIAL PLANNER®)
• Corporate Finance Institute · Online exam, not proctoredFinancial Modeling & Valuation Analyst (FMVA®)
• Global Association of Risk Professionals · Proctored examFinancial Risk Manager (FRM®) Certification
• Intuit · Course completionIntuit Academy Bookkeeping Professional Certificate
• Intuit · Online exam, not proctored · freeQuickBooks Online Certification (ProAdvisor), Level 1
• Xero · Online exam, not proctored · freeXero Certified Associate (Level 1 Xero certification)

Neighbouring fields

• Business, Projects and Management

  Budgets, pricing and unit economics are where the two fields meet; the business hub owns strategy and running the firm, this hub owns the numbers.

• Data, Analytics and AI

  Financial analysis starts in a spreadsheet and ends in a data pipeline; the data field owns the methods, this hub owns what the numbers mean.

• Workplace Productivity and Office Skills

  Spreadsheets are the shared tool; bookkeeping, modelling and tax are the finance field's own topics.

Courses in the directory

2,531 courses are filed here; the top 6 by our ranking, details and the provider link on each course page.

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