COURSE NUMBER AND TITLE: Accounting 231, Principles of Financial
Accounting (2301).
COURSE DESCRIPTION: Introduction to concepts, principles, processes,
and uses of accounting information for financial reporting. Prerequisite: 3 hours college
level math (may be taken concurrently).
GENERAL OBJECTIVE: To introduce the student to the basic concepts of
accounting. This includes the collection, presentation, and analysis of data for all forms
of business enterprises.
LEARNING OBJECTIVES: Upon successful completion of this course, the
student should be able to:
1. Understand the objectives of financial reporting established by the Financial Accounting Standards Board (FASB).
2. Use current financial accounting terminology.
3. Identify, analyze, and process relevant business transactions, including the preparation of an income statement, balance sheet and statement of cash flows.
4. Describe alternative methods of recognizing and valuing economic resources and claims on these resources (liabilities).
5. Apply the various methods of valuation and compare the financial statement impact of each.
TOPICAL COMPONENTS: The following topics will be covered in this
course:
1. Introduction: Financial statements and the objectives of financial
reporting including legal and ethical issues.
2. Processing accounting information.
A. Transaction analysis.
B. Recording in the general journal.
C. Ledger accounts and posting.
D. End-of-period processes.
a. use of worksheets.
b. adjusting and closing entries.
c. preparation of financial statements.
*Practice set required.
3. Analysis of cash flows.
A. Cash vs accrual basis of accounting.
B. Identifying sources/uses of cash.
C. Converting accrual based information to an analysis of cash flows.
4. Financial statement analysis
A. Objective of financial statement analysis.
B. Usefulness of ratios and relationships.
C. Application of techniques to analyze short-term/ long-term solvency,
profitibility,.
and trends.
5. Cash, marketable securities, and receivables.
A. Control of cash.
B. Valuing marketable securities.
a. Mark-to-market valuation techniques.
b. Reporting gains/losses.
C. Accounts receivables and bad debts.
a. Determining bad debt expense.
b. Reporting net realizable value.
D. Accounting for notes receivable.
a. calculation of simple interest.
b. recording interest income.
6. Inventories and cost of goods sold.
A. Initial valuation of inventory items.
B. Periodic vs perpetual systems.
C. Valuation of inventories using various acceptable methods.
D. Impact of various methods on income.
7. Property, plant, equipment, intangible assets and natural resources..
A. Initial valuation of capital assets.
B. Computation/revisions of depreciation, various methods.
C. Capital vs normal expenditures.
D. Computation of gains(losses) on disposal of assets..
E. Accounting for intangible assets and natural resources.
8. Liabilities
A. Present value concepts.
B. Accounting for Bonds.
a. computing issue price.
b. accounting for debt amortization.
c. determining book/current market value.
d. accounting for bond retirement.
C. Classification of liabilities.
D. Accounting for payroll and fringe benefits.
9. Shareholder's equity.
A. Classes and rights of shareholders.
B. Accounting for stock issues.
C. Accounting for treasury stock.
D. Accounting for dividends.
E. Impact of dividends on equity accounts.
10. Long-term investments.
A. Reasons for investments.
B. Application of market value method.
a. determination of mark-up/mark-down.
b. financial statement disclosure.
C. Application of the equity method.
a. accounting for dividends/income.
b. determining equity per share values.
D. Accounting for realized gains/losses.
EVALUATION: *Sufficient examinations should be given during the
semester to provide a sound basis for the evaluation of student performance. Exams should
contain a mixture of objective questions, problems from text/lecture materials and
discussion types requiring short answers. Completion of a practice set is required. A
comprehensive final exam is required. At least one individual or group assignment should be
administered. Other types of evaluation such as homework, participation in classroom
discussions or exercises, library assignments, and term papers may be used at the
discretion of the instructor. Specific factors used in determination of semester grades
should be throughly explained on the individual instructor=s syllabus.
* A minimum average of 60% on exams must be attained to satisfactorily
complete the course.
