Introduces basic financial accounting principles including the accounting cycle; merchandise accounting; income, asset, and liability measurements; and preparation and evaluation of financial statements.
Goals, Topics, and Objectives
- The Accounting Cycle
- Journalize events in the general journal.
- Post amounts to the general ledger.
- Journalize and post adjusting entries.
- Journalize and post closing entries.
- Prepare a post-closing trial balance.
- The Accrual Basis of Accounting
- Compare and contrast accrual and cash basis of accounting.
- Financial Statement Presentation and Interpretation
- Prepare a classified balance sheet in conformance with generally accepted accounting principles (GAAP).
- Prepare a multi-step income statement in conformance with GAAP.
- Prepare a retained earnings statement in conformance with GAAP.
- Prepare and analyze a comprehensive stockholder's equity section of a balance sheet.
- Calculate the book-value-per-share and earnings-per-share of a corporation that has preferred and common shares of stock outstanding and that holds shares in the treasury.
- Employ horizontal, vertical, and ratio analysis tools to draw conclusions regarding the liquidity, profitability, and solvency of a given business entity.
- Assumptions, Principles, and Constraints of GAAP Accounting
- Discuss Monetary Unit, Economic Entity, Time Period, and Going Concern Assumptions.
- Discuss Revenue Recognition, Matching, Full Disclosure, and Cost Principles.
- Discuss Materiality Constraint.
- Asset and Current Liability Recognition, Recording, and Analysis
- Apply internal control principles by preparing a bank reconciliation.
- Calculate the value of inventory and cost of goods sold using the first in first out (FIFO), last in first out (LIFO), and average cost methods.
- Analyze the impact of these methods (FIFO, LIFO, and average cost) on financial statements.
- Calculate the value of depreciation expense and book value of plant assets using straight-line, units of activity, and accelerated depreciation methods.
- Analyze the impact of these methods on financial statements.
- Cash Flow Statement
- Prepare a cash flow statement using the indirect method in conformance with GAAP.
Assessment and Requirements
Students will be assessed through tests, quizzes, in-class activities, outside assignments using an online homework management system, and/or class participation.