Accounting 201: The Standard Course Outline (SCO)
I. General Information:
 Course number: Accounting 201
 Title: Elementary Financial Accounting
 Units: 3
 Prerequisites: None
 Course Coordinator/SCO Prepared by Steven A. Fisher, John Valenzuela, John
Lacey
 Date prepared: August 5, 2008
II. Catalog Description: Introduction to financial accounting, practice. For business
majors. Laboratory and/or class computer applications required.
III. Curriculum Justification(s): The objective of this course is to provide users of
financial statements the ability to understand and interpret accounting data and
financial statements. It will also provide a foundation to those students who choose to
major in accounting. Where possible, examples from financial reports of public
companies will be used to illustrate the application of the accounting principles in
practice.
The first part of the course focuses on the accounting process. The source of accounting
principles will be discussed along with the process accountants use in recording,
summarizing, and reporting "accounting events". Topics discussed will include what the
accountant records and does not record, how that recording is accomplished, and the
aggregation process that occurs prior to the issuance of financial statements. During this
portion of the course the double-entry bookkeeping process will be presented and the
concept of accrual accounting will be contrasted to cash flows. Accounting for accounts
receivable, accounts payable, and a basic introduction to inventory accounting and
manufacturing accounting are also included here.
In the second part of the course, specific issues in financial reporting will be addressed.
The first topic will be revenue recognition. This is the critical point at which accountants
recognize the accomplishments of a company through increased values on the financial
statements. The various times revenue is recognized in accounting will be compared and
contrasted with value concepts in economics and finance. Next, inventory accounting is
discussed in greater depth, including the effects of alternative inventory cost-flow
assumptions and the holding gains that result from changing prices in the factor and
product markets. Other topics will include plant asset accounting (including
depreciation), liabilities (including pensions, leases, and income taxes), and owners
equity (including earnings per share and contingent securities).
IV. Course Objective(s): The learning goals of Accounting 500 include:
1. Quantitative and Technological Skills: Students will possess quantitative and
technological skills enabling them to analyze, interpret, and communicate
business data effectively and to improve business performance. Students will be
able to construct financial statements from business transactions, apply basic
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accounting principles, and perform basic financial statement analysis.
2. Management-Specific Learning Goals: Students will be able to demonstrate
understanding of all business functions, practices, and related theories and be able
to integrate this functional knowledge in order to address business problems.
More specifically, students will gain competency and knowledge in solving
complex business problems.
V. Outline of Subject Matter:
Section 1: Accounting Environment and Transaction
Analysis
This section will introduce the process used by accountants in recording, summarizing
and reporting the operations of the enterprise. The basic accounting equation will be
discussed along with the criteria used by accountant for recording economic events in the
accounting records. The books of original entry will be presented in the context of
double-entry bookkeeping through a simple business example. The basic financial
statements will be illustrated and discussed.
Section 2: Accounting Recordkeeping and Accruals and Deferrals
The focus of this section will be on the important difference between accounting numbers
using the "accrual process" and those based on the flow of cash into and out of the
organization. Accountants' recording of sales and purchases on credit will be illustrated
along with the problems such reporting poses for the readers of financial statements.
Midterm Exam 1
Section 3: Merchandising Companies & Inventory Management
This section continues the discussion of differences between accrual accounting and cash
flows with an emphasis on inventories. Problems in accounting for both merchandising
and more complex manufacturing entities will be illustrated. The effects of alternative
inventory cost-flow assumptions (FIFO, LIFO, weighted average) on the financial
statements will be illustrated.
Section 4: Short-term Liquid Assets
Accounting concepts and classified financial statements will be discussed. Cash, accounts
receivable, and notes receivable will be discussed along with the control of cash.
Midterm Exam 2
Section 5: Plant Assets
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Historical cost valuation is the principal topic of interest in accounting for plant assets.
Acquisition, disposition, refurbishment, and value impairment of plant will all be
discussed. The topics of depreciation and depletion will be related to the valuation issue.
Intangible assets, including "goodwill", will also be discussed.
Section 6: Short and Long Term Borrowing
This section will be used to introduce the relationship between interest and value. These
topics should be familiar from your economics classes and will be extremely important
throughout the rest of your study in the business school. Also short and long-term
liabilities of the firm will be discussed along with the accounting treatment afforded to
bonds and leases.
Section 7: The Owner's Equity & Cash Flow Statement
Accounting for the stockholders' claim against the firm is the topic of this section. The
relationship between the income statement and the balance sheet will be reinforced here.
Also, the third basic financial statement, the cash flow statement, will be discussed here.
Final Exam
VI. Methods of Instruction: This course is taught primarily through lecture and class
discussion of concepts and applications. Active interaction between the instructor and
students is encouraged. The instructor may make use of homework assignments, group
work, and a capstone project to enhance the learning process. The required textbook for
the class is Kimmel, Weygandt, & Keiso, Financial Accounting, Tools for Decision
Making, Fourth Edition, 2007. The Study Guide to accompany the text is strongly
recommended. Anthony, Robert N., Essentials of Accounting. Addison Wesley, is also
recommended.
VII. Instructional Policies and Other Requirements: Each session includes a reading and
problem or case assignment. It is expected that the reading assignment will be completed
prior to the first class session listed for that assignment. The problems or cases should be
attempted by the second session for which they are listed. If you get behind (which I
strongly encourage you not to do) or if you find that you are struggling with the material
please come to see me. The supplementary text by Anthony is also an excellent source of
help. It is a self-study text that covers most of the material in the course with a different
approach. Evaluation will be based upon homework assignments, two midterm
examinations and a final exam. Late homework will not be accepted, but you may miss
one homework assignment without penalty. Homework will be graded based upon effort,
not correctness. Complete homework receives a grade of 2, incomplete but significant
effort receives a grade of 1, little or no effort receives a grade of 0.
Examination day procedures will be distributed and must be followed by all students.
You must bring a university photo identification card to the exam and you must sit in
your assigned seat during the exam. You will not be allowed to leave the examination
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room until your exam has been checked in to the exam monitor. Any failure to follow the
examination procedures or any dishonesty in the conduct of any student in the class will
be pursued through the University disciplinary process. There will be no make-up
exams. Grades will be assigned based upon the following weighting:
Midterm 1
Midterm 2
Final Exam
Homework
Total
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30%
30%
30%
10%
100%