COURSE: ACC-142 Financial Accounting

Fall, 2011

TIME/PLACE:

MWF

9:20 - 10:20 am

Larson 74

MWF

10:30 - 11:30 am

Larson 74

Monday

6:00 - 9:15 pm

Larson 74

INSTRUCTOR: Kathy Metcalf

OFFICE: Larson 67

OFFICE HOURS:

Mon./Wed./Fri.

8:15 - 9:10 am

Tues./Thurs.

9:15 - 10:15 am

Or by appointment

E-MAIL: Kmetcalf@eicc.edu

WEB PAGE: faculty.eicc.edu/kmetcalf/

PHONE: 563-288-6028

COURSE DESCRIPTION: An introduction to the use of accounting in the decision making process. Information will be presented with a bias toward user orientation as opposed to preparer orientation. Course competencies will be developed in the areas of identifying the role of accounting in society, basic accounting and business terminology, concepts behind financial information, accepted accounting practices, analysis and interpretation of financial statements of sole proprietorships and corporations.

GENERAL COURSE GOALS: Students will:

1. Analyze business transactions.

2. Record fundamental business transactions.

3. Prepare balance sheets, income statements, and capital statements.

4. Interpret the information presented in the financial statements.

5. Develop recommendations and/or alternative courses of action based upon financial information.

TEXT AND MATERIALS:

Required:

Financial Accounting by Kimmel, Weygandt and Kieso, Wiley, Sixth Edition, 2011

Required:

Working Papers, Financial Accounting by Kimmel, Weygandt and Kieso, Sixth Edition

Recommended:

Calculator

METHODS OF INSTRUCTION: Students are to read the assigned materials before coming to class. The instructor will lecture on the materials emphasizing and clarifying that which she feels most important in the text and expanding on the text as needed. Exercises will be discussed and problems will be assigned for homework. Some homework (at the instructor's discretion) will be collected for grading. Late homework will receive half credit if received no later than one week after the date due. Homework more than one week late will not be accepted for grading. There will be five chapter exams given in class. Students are expected to take all exams as they are scheduled. However, if it is necessary to miss an exam due to illness or an emergency, students will be given the opportunity to make up one exam on the scheduled exam make-up day at the end of the semester.

SPECIAL NEEDS: Anyone who feels they may need an academic accommodation based on the impact of a documented disability should contact the learning specialist, Kathy Trosen, at 563-288-6013 to arrange an appointment as soon as possible. At the appointment, course format, individual needs, and potential accommodations will be discussed. This service is FREE and confidential.

GRADING CRITERIA:

Homework

100

Chapter Exams (5 exams)

500

Final Exam (Comprehensive)

200

Total Points

800

GRADING SCALE:
A = 90 - 100%
B = 80 - 89%
C = 65 - 79%
D = 55 - 64%
F = 0 - 54%

(Note: pluses and minuses are used at the top and bottom 1 % of each grade range. The only exception is that an A+ cannot be awarded.)

TOPICAL OUTLINE:

Week 1:

Unit One:

Concepts and Principles

Weeks 2-3

Unit Two:

The Accounting Cycle

Week 4:

Unit Three:

Completion of the Accounting Cycle

Weeks 5-6

Unit Four:

Accounting for a Merchandise Enterprise

Week 7:

Unit Five:

Cash Control, Receivables

Weeks 8-9

Unit Six:

Inventories and Investments

Weeks 10-11

Unit Seven:

Plant Assets

Week 12-13:

Unit Eight:

Bonds and Other Liabilities

Weeks 14-15:

Unit Nine:

Corporations and Statement of Cash Flows

Week 16:

Finals

 

COURSE COMPETENCIES/OUTCOMES:

On completion of this course, the student will meet the following competencies and outcomes:

Unit One: Concepts and Principles

1. Describe the accounting profession and its specialized fields.

2. Explain the role of accounting in making business decisions.

3. Describe the development of accounting concepts and principles.

4. Identify the major sources of generally accepted accounting principles.

5. Describe and explain the importance of each of the following accounting principles and concepts:

a. business entity

f. full disclosure

b. going concern

g. consistency

c. objective evidence

h. materiality

d. accounting period

i. conservatism

e. cost principle

6. Identify the elements of the accounting equation.

7. Explain how the accounting equation relates to the construction of financial statements.

8. In terms of the four fundamental financial statements:

a.

List the type of accounts used on each.

b.

Explain how each is used in the decision making process.

c.

Explain the connection between the statements.

9. Briefly differentiate between Sole Proprietors and Corporations.

10. Differentiate between Financial and Managerial Accounting.

11. Explain the role of ratios in the decision making process

Unit Two: The Accounting Cycle

1. Apply the debit and credit rules to Assets, Liabilities and Owner's Equity accounts.

2. Explain the meaning of the phrase "Double-entry Accounting."

3. Explain the connection between double-entry accounting and ledgers and journals.

4. Explain the differences between the financial statements of corporations and sole proprietors.

5. Distinguish between balance sheets and income statement accounts.

6. Prepare journal entries to record transactions affecting balance sheet accounts.

7. Post information from the journal to ledger accounts.

8. Prepare a trial balance and explain its purpose.

Unit Three: Completion of the Accounting Cycle

1. Explain the purpose of adjusting entries.

2. Journalize and post adjusting entries associated with : revenue, liabilities, assets, and expenses.

3. Prepare a worksheet/spreadsheet, explain its purpose, and relate it to financial statement preparation.

4. Prepare financial statements for a service organization.

5. Explain the purpose of closing entries.

6. Journalize and post closing entries.

7. Draw a flow diagram illustrating the accounting cycle, from receipt of objective evidence to closing entries.

Unit Four: Accounting for a Merchandise Enterprise

1. Differentiate between the income statements for service and for merchandising concerns.

2. Record purchases and sales of merchandise using perpetual merchandise inventory accounts.

3. Explain how the display of Cost of Goods sold might be influenced by the type of inventory method used (periodic or perpetual).

4. Journalize and post adjusting and closing entries for a merchandising concern.

5. Prepare an income statement for a merchandising concern.

6. Calculate: Net Sales, and Gross Margin.

Unit Five: Cash Control and Receivables

1. Using examples explain the difference between cash and cash equivalents.

2. Explain what steps could be established to facilitate internal control over cash transactions.

3. Prepare a bank reconciliation statement and make any necessary journal entries.

4. Explain use of the cash short and over account, including related journal entries.

5. Explain the difference between the Balance Sheet Approach, the Income Statement Approach, and the Direct Write-Off method of accounting for uncollectibles.

6. Calculate and explain the use of the following items.: Accounts Receivable Turnover and Average Number of Days to Collect Accounts Receivable.

7. Calculate and record the interest on full term and discounted notes receivable.

Unit Six: Inventories and Investments

1. Compare the effects of over- and under-stated inventory figures on the related balance sheet and income statements.

2. Calculate the cost of inventory using LIFO, FIFO, and Weighted Average assumptions.

3. Explain how the choice of inventory costing methods influences financial statements.

4. Explain the impact of Lower of Cost or Market valuation on the financial statements.

5. Calculate the Inventory Turn-Over Rate and explain its use.

6. Calculate the Number of Days' Purchases in Accounts Payable and explain its meaning.

Unit Seven: Plant Assets

1. Using examples, explain the difference between tangible and intangible assets.

2. Define depreciation.

3. For each of the following methods, compute depreciation amounts and explain the financial impact of selecting one method over another:

a.

Straight-line

b.

Production

c.

Declining balance

d.

Sum of the years' digits

4. Differentiate between capital and revenue expenditures.

5. Describe and record the acquisition (trade-in or purchases) and disposal of plant assets.

Unit Eight: Bonds and Other Liabilities

1. Explain the difference between a bond, a note, and an account payable.

2. Using present value tables, calculate the value of a bond.

3. Record the sale of a bond at a premium and a discount.

4. Calculate and record the amortization of a discount/premium of bonds.

5. Record the issuance of bonds between interest dates.

6. Calculate the due date and maturity value of a Note Payable.

Unit Nine: Corporations

1. Identify basic corporation characteristics.

2. Explain the advantages and disadvantages of the corporate form of business.

3. Identify the components of stockholders' equity.

4. Distinguish between common stock and preferred stock.

5. Illustrate the accounting for the issuance of common and preferred stock (with par value, state value, or without par or stated value) for cash and non-cash assets.

6. Illustrate the accounting for cash and stock dividends.

7. Calculate the book value per share for both common and preferred stock and distinguish between book value, market value, and par value.

8. Define retained earnings and prepare a statement of retained earnings.

9. Explain why a stock split might be used and how a split would be recorded.

10. Define Treasury Stock and explain how and why it can/would be bought and sold.

11. Describe the disclosure of restrictions on retained earnings.

12. Prepare a statement of stockholders' equity.

13. Describe and compute earnings per share.

Academic Integrity

Student-teacher relationships are built on trust. For example, students must trust that the teachers have made appropriate decisions about the structure and content of the courses they teach, and teachers must trust that the assignments which students turn in are their own. Acts which violate this trust, undermine the educational process.

The Student Handbook defines various forms of Academic Dishonesty and procedures for responding to them. All forms are violations of the trust between students and teachers. Students should familiarize themselves with this portion of the Student Handbook and should note that the penalties for plagiarism and other forms of cheating can be quite harsh.

You are cheating if you copy someone else's exam or homework or if you allow someone to copy your work. You are cheating if you pass test answers to another student during or before a test.

When group work is assigned, it should be a collaborative effort. Each student in each group should make every effort to contribute to the group's successful completion of the assignment. Many students also find it helpful to form study partnerships or study groups. This is encouraged and can contribute greatly to your understanding of the course materials.

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