Upon completion of the course students 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 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.
4. Determine the economic transactions for both a service and merchandising concern from the source document through the closing process.
5. Analyze the difference in accounting methods allowed under generally accepted accounting principles (GAAP) in the accounting for various assets, liabilities and equity transactions.
6. Categorize the types of business transactions as being operating, investing or financing activities.
7. Compare the difference between accrual based measurements and cash flows from activities.
8. List the various ratio and percentage analysis tests along with different financial statements used by people to make better economic decisions.
9. Make ethical choices displaying honesty and integrity to avoid any legal action protecting your reputation as well as the company's reputation.
10.Demonstrate analytical, interpersonal, and communication skills in solving problems.
I. Introduction to Accounting
A. Users of accounting information and their needs
B. Financial statements as a means of communications for internal and external decision makers
C. The objectives of financial reporting using GAAP accounting principles, International Financial Reporting Standards (IFRS), and the role of Financial Accounting Standards Board (FASB)
D. The accounting profession including Certified Public Accountant (CPA) license as well as the field of auditing
E. Importance of ethics, reputation, and legal liability in the accounting field.
F. Develop critical thinking skills, analytical ability, interpersonal and collaborative skills, and the ability to write business reports.
II. Financial Statements Providing Information for Investing and Financing Decisions
A. The accounting equation
B. Preparation of financial statements
C. Financial statement interpretation and analysis
D. Objective of financial reporting
E. Qualitative characteristics of accounting information
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 and 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
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
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 and equipment, natural resources, and intangibles
1. Acquisition, depreciation and disposal of plant and equipment
2. Subsequent costs: revenue or capital expenditure
3. The matching principle and cost allocation
4. Allocation versus valuation of assets
5. Tax implications of asset dispositions
6. Acquisition and depletion of natural resources
7. Acquisition and amortization of intangible assets
VI. Accounting for Liabilities
A. Current liabilities
1. Current ratio
2. Accounts payable turnover ratio
3. Notes payable
4. Time value of money
B. Contingent liabilities
C. Working capital
D. Present value concepts
VII. Accounting for Long-term Liabilities
1. Reporting payables and interest expense for sale at par, discount, and premium
2. Debt-to-equity ratio analysis
3. Early retirement
B. Other long-term liabilities: leases, deferred taxes, pensions, and other post retirement benefits
C. Balance sheet and footnote disclosures
D. Impact on the statement of cash flows
VIII. 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
IX. The Statement of Cash Flows
A. Cash vs. accrual accounting
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
X. Financial Statement Analysis
A. Horizontal and trend analysis
B. Vertical analysis
C. Common-size statements
D. Ratio analysis:
1. Profitability analysis
2. Liquidity analysis
3. Solvency analysis
4. Market tests analysis
E. Limitations of financial statements and analysis
F. Upholding personal ethical standards and integrity to prevent harm to firms or self when preparing confidential financial statements and reports