MASTER COURSE OUTLINE
A. ACCT 2011 Principles of Financial Accounting
B. COURSE DESCRIPTION:
This course is an introduction to financial accounting concepts and principles through a study
of business transactions and their effect on financial statements. Topics/concepts included
are: accounting as an information system; transactions and the accounting cycle; financial
statements (including the Income Statement, Statement of Owner’s Equity, Balance Sheet,
and the Cash Flow Statement); analysis of profitability, liquidity, and risk; merchandising
operations (including receivables and inventory); long-term assets (including acquisition,
depreciation, and disposal); current and long-term liabilities; and equity financing. The
course focus will be on corporate accounting.
(4 Cr – 4 lect, 0 lab)
C. **Core Theme: Critical Thinking
D. MAJOR CONTENT AREAS:
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Users and uses of accounting information
Overview of financial statements
Recording transactions and the accounting cycle
Account adjustments, statement preparation and closing accounts
Internal control and integrity of financial information
Accounting for merchandisers and inventory
Accounting for cash and receivables
Financial data interpretation
Investments in property, plant and equipment
Investments in intangible assets and natural resources
Long-term debt financing
Equity financing
E. GOAL TYPES, OBJECTIVES, AND OUTCOMES:
GOAL TYPE
**Critical
Thinking
CS
OBJECTIVES
Students will be able to
gather factual information and apply it to a
given problem in a manner that is relevant,
clear, comprehensive, and conscious of
possible bias in the information selected.
demonstrate an understanding of the
purpose of accounting and how it is used.
OUTCOMES
The student will successfully
1. complete an accounting cycle
project for a service business
and a merchandising business.
1.
2.
explain the role of accounting
in society.
identify the different accounting
1
CS
demonstrate an understanding of
accounting for accruals.
CS
demonstrate an understanding of the
accounting for deferrals.
entities involved in business
events.
3. name and define the major
elements of financial
statements.
4. describe the relationships
expressed in the accounting
equation.
5. record business events in
general ledger accounts
organized under an accounting
equation.
6. explain how the historical cost
and reliability concepts affect
amounts reported in financial
statements.
7. classify business events as asset
source, use, or exchange
transactions.
8. use general ledger account
information to prepare four
financial statements.
1. record basic accrual events in a
horizontal financial statements
model.
2. organize general ledger
accounts under an accounting
equation.
3. prepare financial statements
based on accrual accounting.
4. describe the matching concept,
the accounting cycle, and the
closing process.
5. record business events
involving interest-bearing
receivables and payables in a
horizontal financial statements
model.
6. prepare a vertical financial
statements model.
7. explain how business events
affect financial statements over
multiple accounting cycles.
8. discuss the primary components
of corporate governance.
9. classify accounting events into
one of four categories.
10. describe the auditor’s role in
financial reporting.
1. distinguish among accruals,
deferrals, and allocations.
2. record accruals, deferrals, and
allocations in a financial
statements model.
3. explain how unearned revenue
affects financial statements.
4. explain how straight-line
depreciation affects financial
statements.
5. prepare financial statements
2
6.
7.
8.
9.
CS
demonstrate an understanding of the
double-entry accounting system.
1.
2.
3.
4.
5.
6.
7.
8.
9.
CS
demonstrate an understanding of
accounting for merchandising businesses.
1.
2.
3.
4.
5.
6.
7.
8.
that include accruals, deferrals,
and allocations.
explain the matching concept.
explain how supplies affect
financial statements.
explain how prepaid items
affect financial statements.
analyze financial statements
and make meaningful
comparison between companies
by using a debt-to-assets ratio, a
return-on-assets ratio, and a
return-on-equity ratio.
explain the fundamental
concepts associated with
double-entry accounting
systems.
describe business events using
debit/credit terminology.
record transactions in Taccounts.
identify the events that need
adjusting entries and record
them.
state the need for and record
closing entries.
prepare and interpret a trial
balance.
record transactions using the
general journal format.
describe the components of an
annual report.
describe the role of the
Securities and Exchange
Commission in financial
reporting.
identify and explain the primary
features of the perpetual
inventory system.
record and report inventory
transactions in the double-entry
accounting system.
explain the meaning of terms
used to describe transportation
costs, cash discounts, returns,or
allowances, and financing costs.
explain how gains and losses
differ from revenues and
expenses.
compare and contrast single and
multi-step income statements.
show the effect of lost,
damaged, or stolen inventory on
financial statements.
use common size financial
statements and ratio analysis to
evaluate managerial
performance.
identify the primary features of
the periodic inventory system.
3
CS
demonstrate an understanding of
accounting for inventories.
1.
2.
3.
4.
5.
6.
CS
demonstrate an understanding of the
internal control and accounting for cash.
1.
2.
3.
4.
5.
6.
CS
demonstrate an understanding of the
accounting receivables and payables.
1.
2.
3.
4.
5.
CS
demonstrate an understanding of
accounting for long-term operational
assets.
1.
2.
3.
4.
5.
explain how different inventory
cost-flow methods affect
financial statements.
demonstrate the computational
procedures for first in, first out
(FIFO), last in, last out (LIFO),
and weighted average.
apply the lower-of-cost-or
market rule to inventory
valuation.
explain how fraud can be
avoided through inventory
control.
use the gross margin method to
estimate ending inventory.
explain the importance of
inventory turnover to a
company’s profitability.
identify the key elements of a
strong system of internal
control.
identify special internal controls
for cash.
prepare a bank reconciliation.
explain the use of a petty cash
fund.
prepare a classified balanced
sheet.
use the current ratio to assess
the level of liquidity.
explain how the allowance
method of accounting for bad
debts affects financial
statements.
show how the direct write-off
method of accounting for bad
debts affects financial
statements.
explain how accounting for
credit card sales affects
financial statements.
explain how accounting for
warranty obligations affects
financial statements.
explain the effects of the cost of
financing credit sales.
identify different types of longterm operational assets.
determine the cost of long-term
operational assets.
explain how different
depreciation methods affect
financial statements.
determine how gains and losses
on disposals of long-term
operational assets affect
financial statements.
identify some of the tax issues
which affect long-term
operational assets.
4
6.
CS
demonstrate an understanding of the
accounting for long-term debt.
CS
demonstrate an understanding of the
accounting for equity transactions.
show how revising estimates
affects financial statements.
7. explain how continuing
expenditures for operational
assets affect financial
statements.
8. explain how expense
recognition for natural
resources (depletion) affects
financial statements.
9. explain how expense
recognition for intangible assets
(amortization) affects financial
statements.
10. understand how expense
recognition choices and
industry characteristics affect
financial performance
measures.
1. demonstrate how the
amortization of long-term notes
affects financial statements.
2. demonstrate how a line of credit
affects financial statements.
3. explain how bond liabilities and
their related interest costs affect
financial statements.
4. use the straight-line method to
amortize bond discounts and
premiums.
5. explain the advantages and
disadvantages of debt financing.
1. identify the primary
characteristics of sole
proprietorships, partnerships,
and corporations.
2. analyze financial statements to
identify the different types of
business organizations.
3. explain the characteristics of
major types of stock issued by
corporations.
4. explain how to account for
different types of stock issued
by corporations.
5. demonstrate how treasury stock
transactions affect a company’s
financial statements.
6. explain the effects of declaring
and paying cash dividends on a
company’s financial statements.
7. explain the effects of stock
dividends and stock splits on a
company’s financial statements.
8. demonstrate how the
appropriation of retained
earnings affects financial
statements.
9. explain some uses of
accounting information in
5
CS
demonstrate an understanding of the
statement of cash flows.
1.
2.
3.
4.
5.
6.
7.
making stock investment
decisions.
name and define the four
primary sections of a statement
of cash flows.
distinguish between the direct
and indirect methods of
presenting the operating
activities section of a statement
of cash flows.
prepare the operating activities
section of a statement of cash
flows under the indirect
method.
prepare the investing activities
section of a statement of cash
flows.
prepare the financing activities
section of a statement of cash
flows.
explain how the statement of
cash flows could mislead
decision makers.
prepare the operating activities
of a statement of cash flows
under the direct method.
F. SPECIAL INFORMATION:
This course may require use of the Internet, the submission of electronically prepared
documents and the use of a course management software program. Students who have a
disability and need accommodations should contact the instructor or the Student Success
Center at the beginning of the semester. This information will be made available in
alternative format, such as Braille, large print, or current media, upon request.
G. COURSE CODING INFORMATION:
Course Code D/Class Maximum 30; Letter Grade
Revision date: 11/10/10
AASC Approval date: 11/30/10
*Riverland Community College
Disciplines
MnTC Goal
Number
Communication (CM)
Natural Sciences (NS)
Mathematics/Logical Reasoning (MA)
History and the Social & Behavioral
Sciences (SS)
Humanities and Fine Arts (HU)
1
3
4
5
6
6
**Riverland Community College Core
Themes
Critical Thinking (CT)
Human Diversity (HD)
Global Perspective (GP)
Ethical and Civic Responsibility (EC)
People and the Environment (PE)
MnTC Goal
Number
2
7
8
9
10
*These five MnTC Goals have been identified as Riverland Community College Disciplines.
** These five MnTC Goals have been identified as Riverland Community College Core Themes.
NOTE: The Minnesota Transfer Curriculum “10 Goal Areas of Emphasis” are reflected in the
five required discipline areas and five core themes noted in the Riverland Community College
program of study guide and/or college catalog.
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