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These objectives comply with the California Core Competency Model
developed by the Calif. Society of Certified Public Accountants' Committee
on Accounting Education.
This course will prepare the transfer degree and certificate students
for business or accounting programs. Upon completion of the course the
student will be able to:
1. explain how accounting meets the information needs of investors,
creditors, managers, regulatory agencies, and taxing authorities.
2. explain the principles, procedures, and concepts underlying the
primary financial statements.
3. explain the uses and limitations of financial statements and related
information disclosed in the annual report of Securities and Exchange
Commission's reports in making decisions.
4. explain how an accounting system is designed to meet the needs of
specific businesses; and how to input transactions, process this input
and prepare and interpret the financial statements.
5. process the economic transactions for both a service and merchandising
concern from the source document through the closing process.
6. analyze the difference in accounting methods allowed under generally
accepted accounting principles in the accounting for various assets,
liabilities and equity transactions.
7. classify the types of business transactions as being operating,
investing or financing activities.
8. compare the difference between accrual based measurements and cash
flows from activities.
9. demonstrate analytical, interpersonal, and communication skills in
solving problems.
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WEEK TOPIC
1. I. Introduction to Accounting
A. Users of accounting information and their needs
B. Financial statements as a means of communications
C. The objectives of financial reporting
D. Types of organizations and forms of business ownership
E. The nature of business activity: operating, investing, and
financing activities
F. The accounting profession and ethical issues
2-3 II.Financial statements and the annual report
A. The accounting equation
B. Presentation of the Income Statement, Statements of Retained
Earnings or Stockholders' Equity, classified Balance Sheet and
Statement of Cash Flows
C. Financial Statement interpretation and analysis
D. Understanding elements of the annual report
E. The Securities and Exchange Commission's reports
F. Objective of Financial Reporting
G. Qualitative characteristics of accounting information
4-5 III. Processing accounting information for service entities
A. External and internal transactions
B. The accounting equation and transactional analysis
C. The double-entry system and use of "T" accounts
D. Use of general journal & general ledger to process information
E. Cash versus accrual accounting and the adjustment process
F. The adjusting process -- why and how
G. The closing process -- why and how
H. The accounting cycle
6-7 IV. Processing accounting information for merchandising entities
A. Additional accounts and recording merchandising concerns
B. Periodic vs perpetual inventory systems
C. Internal control for a merchandising concern
D. Inventory valuation and its impact on the financial statements
E. Lower of Cost or Market and its effect on inventory valuation
F. Estimating inventory value: The gross profit method and retail
inventory method
G. Effect of inventories on cash flows
8-9 V. Accounting for Assets
A. Monetary assets: cash, marketable securities and receivables
1. Valuation issues and their impact on income measurement
cash flows
2. Liquidity issues
B. Operating Assets: property, plant & Equipment, natural
resources, and intangibles
1. Acquisition, depreciation and disposal of plant and equip.
2. Subsequent costs: Revenue or capital expenditure
3. The matching principle and cost allocation
4. Allocation vs valuation of assets
5. Tax implications of asset dispositions
6. Acquisition and depletion of natural resources
7. Acquisition and amortization of intangible assests
10-11 VI. Accounting for Liabilities
A. Current liabilites, contingent liabilities, and the time
value of money
1. Recording and disclosing accounts payable, notes payable,
currently maturing protions of long-term debt and accrued
deferred liabilities
2. Balance sheet and footnote disclosures
3. Liquidity and cash flow issues
B. Long-term liabilities
1. Accounting for bonds
2. Other long-term liabilities; leases, deferred taxes,
pensions and other postretirement benefits
3. Balance sheet and footnote disclosures
4. Impact on the Statement of Cash flows
12-13 VII. Stockholders' Equity and Financing Operations
A. Components of stockholders' equity; contributed capital and
retained earnings
B. Types of stock and their characteristics
C. Issuance of stock for cash, noncash consideration and by
subscription
D. Treasury stock transactions and retirement of shares
E. Retained earnings and dividends: Types of dividends and
apportionment
F. Stock splits
G. Valuation issues; book value versus market value
H. Effect of stockholders' equity changes on cash flows
14 VIII. The Statement of Cash Flows
A. Cash versus accrual accounting reviewed
B. Purpose and reporting requirements for the Statement of Cash
Flows
C. Direct and indirect methods of computing cash flows from
operations
D. Noncash investing and financing activities
E. Preparing the Statement of Cash Flows
F. Use of cash flow information
15-16 IX. Financial Statement Analysis
A. Horizontal and trend analysis
B. Vertical analysis
C. Common-size statements
D. Ratio analysis:
1. Liquidity analysis
2. Solvency analysis
3. Projectability Analysis
E. Limitations of Financial Statements & Analysis
