COURSE SYLLABUS

 

COURSE IDENTIFICATION

 

Course/Prefix Number:           ACCT 201

Course Title:                Financial Accounting              

Division:                                  Applied Science Division      

Program:                                  Accounting

Credit Hours:                                      3                                             

Initiation/Revision Date:         Spring 2008

 

 

CLASSIFICATION OF INSTRUCTION

 

    x      Vocational

 

 

COURSE DESCRIPTION

 

This course provides an introduction to financial accounting concepts and theory, with emphasis on the use of external financial statements.  Accounting for corporations and financial statement analysis are introduced.  Prerequisite:  ACCT 108 or high school accounting is recommended, but may be waived by the instructor. This course is recommended for transfer students, as well as other students interested in accounting.  

 

 

PREREQUISITES AND/OR COREQUISITES

 

Some background in accounting or permission of the instructor.

 

TEXT

 

Financial Accounting, 9th edition, Needles and Powers, Houghton Mifflin, 2007.

 

Working papers that correlate with the basic text.

 

 

OTHER REFERENCES

 

Corporate annual reports

 

 

COURSE OUTCOMES/COMPETENCIES (as Required)

 

 

At the end of this course, a student should be able to do the following:

 

 

Outcome 1:   Describe the nature and environment of accounting.

                       Competencies:

a.             Define accounting.  (Ch. 1)

b.            Identify the users of accounting information. (Ch. 1)

c.             State the objectives of financial reporting. (Ch. 1)

d.            Describe the characteristics of a corporation. (Ch. 1)

e.             State the accounting equation and show how it is affected by simple transactions. (Ch. 1, 2)

 

Outcome 2:   Recognize the information conveyed in the four basic financial statements.

                       Competencies:

a.             Identify the four financial statements.  (Ch. 1)

b.            Prepare an income statement.  (Ch. 1, 3) 

c.             Prepare a statement of retained earnings.   (Ch. 1, 3)

d.            Prepare a balance sheet.  (Ch. 1, 3)

e.             Describe the features of multistep and single-step classified income statements.  (Ch. 4)

f.             Identify and describe the basic components of a classified balance sheet.  (Ch. 4)

g.            State the principal purposes and uses of the statement of cash flows and identify its components.  (Ch. 13)

h.            Analyze the statement of cash flows.  (Ch. 13)

i.              Use the indirect method to determine cash flows from operating activities.  (Ch. 13)

j.              Determine cash flows from investing and financing activities.  (Ch. 13)

 

Outcome 3:   List and define important generally accepted accounting principles (GAAP).

                       Competencies:

a.             Explain how generally accepted accounting principles (GAAP) relate to financial statements and the independent CPA’s report. (Ch. 1)

b.            Identify the organizations that influence GAAP.  (Ch. 1)

c.             Explain the separate entity concept. (Ch. 1)

d.            Explain how the concepts of recognition, valuation, and classification apply to business transactions and why they are important factors in ethical financial reporting.  (Ch. 2)

e.             Describe the measurement issues of accounting period and continuity.

f.             Explain and employ the matching principle.  (Ch. 3, 5)

g.            Define and describe the conventions of comparability, consistency, materiality, conservatism, full disclosure, and cost-benefit.  (Ch. 4)

 

Outcome 4:   List and perform the steps in the accounting cycle.

                       Competencies:

a.             Describe the chart of accounts.  (Ch. 2)

b.            Explain the double-entry system and the usefulness of T accounts in analyzing business transactions.  (Ch. 2)

c.             Demonstrate how the double-entry system is applied to common business transactions.  (Ch. 2)

d.            Analyze and record business transactions  (Ch. 2)

e.             Prepare a trial balance.  (Ch. 2)

f.             Prepare typical adjusting entries.  (Ch. 3)

g.            Prepare basic financial statements.  (Ch. 3)

h.            Describe the accounting cycle and explain the purposes of closing entries.  (Ch. 3) 

 

Outcome 5:   Report on and apply generally accepted accounting principles to the measurement of business income.

                       Competencies:

a.             Define net income and explain the assumptions underlying income measurement and their ethical application.  (Ch. 3)

b.            Define accrual accounting and explain how it is accomplished.  (Ch. 3)

c.             Identify four situations that require adjusting entries.  (Ch. 3)

d.            Prepare typical adjusting entries.  (Ch. 3)

e.             Use accrual-based information to analyze cash flows.  (Ch. 3)

 

Outcome 6:   Report on and account for cash and accounts receivable.

                       Competencies:

a.             Define cash and cash equivalents.  (Ch. 7)

b.            Explain methods of internal control over cash. (Ch. 7)

c.             Define accounts receivable and apply the allowance method of accounting for uncollectible accounts.  (Ch. 7)           

 

Outcome 7:     Report on and account for inventory and cost of goods sold

                        Competencies:

a.          Record merchandising transactions under the perpetual and/or periodic inventory systems.  (Ch. 5)

b.         Explain the lower-of-cost-or-market (LCM) rule.  (Ch. 6)

c.          Calculate inventory cost under the periodic inventory system using various costing methods.  (Ch. 6)

d.         Explain the effects of inventory costing methods and misstatements of inventory on income determination, income taxes, and cash flows.  (Ch. 6)

 

Outcome 8:     Report on and apply generally accepted accounting principles to noncurrent productive assets.

                        Competencies:

a.       Identify types of long-term assets and explain the management issues related to accounting for them.  (Ch. 9)

b.      Distinguish between capital and revenue expenditures.  (Ch. 9)

c.       Define depreciation and compute depreciation under the straight-line method.  (Ch. 9) 

 

 

 

Outcome 9:     Define and report on liabilities.

                        Competencies:

a.       Classify liabilities as current or long-term.  (Ch. 8)

b.      Identify, compute, and record definitely determinable and estimated current liabilities.  (Ch. 8)

c.       Define contingent liabilities.  (Ch. 8)

d.      Describe the features of a bond issue and the major characteristics of bonds.  (Ch. 9) 

e.       Record the issuance of bonds.  (Ch. 9) 

 

Outcome 10:   Define and report on stockholders’ equity.

                        Competencies:

a.       Identify the components of stockholders’ equity.  (Ch. 11)

b.      Identify the characteristics of preferred stock.  (Ch. 11)

c.       Account for the issuance of stock.  (Ch. 11)

d.      Account for cash dividends.  (Ch. 11)

e.       Define treasury stock.  (Ch. 11)

f.       Identify the components of a corporate income statement.  (Ch. 12)

 

Outcome 11:   Use financial statement analysis to evaluate a company’s performance.

a.       Apply horizontal analysis, trend analysis, vertical analysis, and ratio analysis to financial statements.  (Ch. 14)

b.      Use classified financial statements to evaluate liquidity and profitability.  (Ch. 4)

c.       Apply ratio analysis to financial statement in a comprehensive evaluation of a company’s financial performance.  (Ch. 4, 14)

 

Outcome 12:   Define ethics and describe the ethical responsibilities of accountants.

                        Competencies:

                        a.     Explain the responsibility for ethical financial reporting.  (Ch. 1-14)

           

 

COURSE OUTLINE

 

   I.       Uses of Accounting Information and the Financial Statements

            A.        Accounting as an Information System

            B.        Decision Makers:  The Users of Accounting Information

            C.        Accounting Measurement

            D.        The Corporate Form of Business

            E.         Financial Position and the Accounting Equation

            F.         Financial Statements

            G.        Generally Accepted Accounting Principles and the Ethical Responsibilities of Accountants

 

  II.       Analyzing Business Transactions

            A.        Measurement Issues

            B.        The Double Entry System

             C.        Business Transaction Analysis

            D.        The Trial Balance

            E.         Cash Flows and the Timing of Transactions

            F.         Recording and Posting Transactions

           

III.       Measuring Business Income

A.                Profitability Measurement:  Issues and Ethics

B.                 Accrual Accounting

C.                 The Adjustment Process

D.                Preparation of Financial Statements

E.                 The Accounting Cycle

F.                  Cash Flows from Accrual-Based Information

 

IV.       Financial Reporting and Analysis

            A.        Foundations of Financial Reporting

            B.        Accounting Conventions

            C.        Classified Balance Sheet

            D.        Forms of the Income Statement

            E.         Using Classified Financial Statements

           

  V.       The Operating Cycle and Merchandising Operations

             A.        Managing Merchandising Businesses

            B.        Terms of Sale

            C.        Perpetual Inventory System

            D.        Periodic Inventory System

            E.         Internal Control

 

VI.            Inventories

A.               Managing Inventories

B.                Inventory Cost and Valuation

C.                Inventory Cost Under the Periodic Inventory System

D.               Impact of Inventory Decisions

 

VII.         Cash and Receivables

A.               Cash Equivalents and Cash Control

B.                Uncollectible Accounts

 

VIII.      Current Liabilities and the Time Value of Money

A.               Common Types of Current Liabilities

B.                Contingent Liabilities

C.                The Time Value of Money

 

IX.            Long-Term Assets

A.               Capital vs. Revenue Expenditures

B.                Depreciation

C.                Natural Resources

D.               Intangible Assets

 

X.        Long-Term Liabilities

 

 

XI.            Contributed Capital

A.               Components of Stockholders’ Equity

B.                Preferred Stock

C.                Issuance of Common Stock

 

XII.         The Corporate Income Statement and the Statement of Stockholders’ Equity

 

XIII.    The Statement of Cash Flows

A.               Operating Activities

B.                Investing Activities

C.                Financing Activities

           

XIV.    Financial Performance Measurement

            A.        Computations

            B.        Analysis

 

XV.     Investments

 

 

INSTRUCTIONAL METHODS

 

   1.       Explanation and illustration of the basic concepts presented in each chapter.

 

   2.       Discussion of the chapters.

    

   3.       Use of slide shows, transparencies, and chalkboard illustrations.

 

   4.       Solving of problems and cases from the text.