UNIVERSITY OF NORTH CAROLINA
KENAN-FLAGLER BUSINESS SCHOOL
Analytical Skills Workshop, Accounting: Summer 2007
Outline and Administrative Details
Professor:
E-Mail:
Office:
Tel:
Office Hours:
Webpage:
Q&A Page:
Mark Lang
Mark_Lang@UNC.EDU
4012, McColl Building
(919) 962-1644
M-F after 3:30, by request
http://public.kenan-flagler.unc.edu/faculty/langm/asw
https://clubs.kenan-flagler.unc.edu/sites/cab/Lists/ASW%20Accounting/Group%20By%20Subject.aspx
COURSE OBJECTIVES:
ASW is designed to prepare you for the fall MBA730 financial accounting course as efficiently and
thoroughly as possible. The course assumes little or no prior background and includes all the material
you need to be well prepared for the fall. Based on prior experience, ASW students consistently
perform well in MBA730. Please do not hesitate to ask questions as we proceed; questions you have
are probably shared by others and asking it once is far more efficient than struggling with it on your
own. Remember that the focus of the course is on ensuring that you develop a strong background in
the core material so no question is too basic.
COURSE MATERIALS
For efficiency, we use the same text in ASW and MBA730, Financial Accounting: An Introduction to
Concepts, Methods and Uses, by Stickney and Weil (Dryden Press, 2007, 12th edition). Handouts and
solutions to selected problems will be supplied in class. NOTE: The 12th edition is new this year,
after a disastrous and short-lived 11th edition. It appears that all the errors in the 11th edition
have been addressed, but let me know if you see something that looks weird. We will use WalMart’s annual report as an illustration of major topics throughout the class.
CLASS PATTERN
Class will often have three parts—a problem based on material covered in the previous class, a brief
lecture and problems covering the new material. The goal is to review the prior day’s material
through the initial problem, cover new material and reinforce the new material with the problem.
Stickney and Weil chapters will generally be spread over three classes. The topic will be introduced
in the second half of the first day on the topic, primarily through lecture. The entire class on the
second day will be devoted to lecture and problems on the topic. During the first half of the third day
we will generally cover a longer problem that reviews the material covered over the previous two
days. To get the most out of class, I recommend skimming the chapter (especially the material
highlighted in the attached reading list) prior to the first day on which we cover it, and then reading it
more carefully before the second day so that you can identify any remaining parts which are not clear.
Also, try to work the assigned problems so you are at least familiar with them and know where you
have questions. The time you spend, especially at the beginning of ASW, will be a good investment
since the material is cumulative and a strong background will make your fall much more pleasant.
EVALUATION
We will have three evaluative exercises to assess progress through the class. If you are comfortable
with the evaluative exercises, you should be well prepared on the topic for MBA730. The first and
third exercises will take the entire class period, while the second will be about 40 minutes covering
the material for that week. Results from the evaluative exercises are only to help you (and me) assess
your understanding.
OFFICE HOURS AND REVIEW SESSIONS
The office hours listed above are times when I am generally in my office. However, inevitably
meetings and other conflicts arise so, if you know you will be stopping by, tell me and I will make
sure to be there. Otherwise, feel free to stop by any time. There will be review sessions and
opportunities for individual tutoring (details to be determined) if you feel you need more exposure to
the material. We will work out details on review sessions during the first few class meetings.
RELATION TO MBA730
We will cover many of the same topics as in the first half of the fall course. The major difference
will be in the focus and pace of the two courses. The presumption in the fall course is that you
understand the mechanics so the focus is on application and interpretation of financial statement
information. In ASW we will move at a more relaxed pace and work numerous problems in class.
This is my eighth time teaching ASW, and I have taught MBA730 or its equivalent for fifteen years
here and at Stanford. I also teach all four sections of MBA730 in the fall. While I know what we
need to cover for MBA730, I will rely on you for feedback on course pacing and assessing the right
mix of lecture and class problems. I have made some changes based on the comments from last year
and would appreciate your feedback on how things are going (either positively or negatively). There
will also be an opportunity for formal in-class feedback around the middle of the class. The
following is a tentative calendar. For the most part we will follow it, but it may change slightly as we
go through the course.
Tentative Calendar
Day
Topic
Date
SW Ch.
SW Problems
1
M
Overview
7/9
Ch.1
1.19
2
Tu
Overview
7/10
Ch. 1
1.22, 1.29
3
W
Balance Sheet
7/11
Ch. 2
1.34, 2.17
4
Th
Balance Sheet
7/12
Ch. 2
2.18, 2.27
5
F
Income Statement
7/13
Ch. 3
2.29, 3.18, 3.20
6
M
Income Statement
7/16
Ch. 3
3.31, 3.33
7
Tu
Income Statement
7/17
8
W
Evaluative Exercise #1
7/18
9
Th
Statement of Cash Flows
7/19
Ch. 4
4.26
10
F
Statement of Cash Flows
7/20
Ch. 4
4.37, 4.34
11
M
Evaluative Exercise #2 & TBA
7/23
12
Tu
Receivables & Revenue
7/24
Ch. 6
6.21
13
W
Receivables & Revenue
7/25
Ch. 6
6.33
14
Th
Inventories
7/26
Ch. 7
7.36
15
F
Evaluative Exercise #3
7/27
2.30, 3.34
ANALYTICAL SKILLS WORKSHOP, SUMMER 2007
Readings in Stickney and Weil
The Stickney and Weil book (SW) is a fairly typical text for teaching the mechanics of accounting.
To fill almost 700 pages, it covers some topics in exhausting detail and addresses technical issues that
we will not focus on in class. The purpose of this summary is to provide guidance as to the goals of
the chapters and to prioritize the material in the chapters. Try to read the pages identified as most
important (noted in italics below) before class.
SW covers the same basic material three times—once in chapter 1 which provides an overview of all
of the financial statements simultaneously, a second time in chapters 2-5 which cover each financial
statement individually and discuss financial statement analysis, and a third time in chapters 6- which
discuss specific topics in detail.
The primary goal of chapter 1 is to provide a broad overview of the financial statements. Focus on
pages 7-18 which introduce the primary financial statements and other information provided in the
annual report. We will discuss the financial statements in much more detail later in the course, so
focus on the big picture—the role of each statement and their basic structure. Skim the other sections
for an overview of other aspects of the reporting environment; we will discuss the most important
aspects of the reporting environment in class.
Chapter 2 provides a more in-depth perspective on the balance sheet. Focus on pages 39-61. In
particular, make sure that you are familiar with pages 50-58 which discuss the basics of accounts and
debits and credits. Skim the other sections which present an overview of the recording process,
balance sheet account titles and analysis of the balance sheet.
Chapter 3 provides an overview of the income statement. Focus on pages 106-119. This chapter is
one of the more important and difficult in the book, especially if this is your first time through the
material. There is a lot of material in this chapter, but it is worth investing some time here since the
concepts are central to the rest of the course.
Chapter 4 discusses the statement of cash flows. The statement of cash flows, especially the indirect
format, is particularly difficult to understand because it runs counter to the accrual basis of
accounting discussed to this point. Focus on pages 156-178 which provide the introductions to the
statement. Skim the remainder of the chapter which discusses preparation of the statement of cash
flows and other issues in more detail; we will discuss those topics in class.
Chapter 5 introduces ratios. Skim the material in the chapter, which presents some commonly-used
ratios, especially pages 229-235. Do not worry about the details. Focus on the intuition for the ratios.
Chapter 6 begins the section covering specific accounting topics in more detail. The format of the
remainder of the book follows the balance sheet, beginning with current assets and moving through
owners’ equity. Focus on pages 282-286 on accounts receivable and pages 296-297 on the
percentage completion method. Skim the other material.
Chapter 7 discusses accounting for inventories. Focus on pages 326-331 on manufacturing and 333338 on cost flow assumptions. Skim the other sections on acquisition cost, valuation basis and
periodic vs. perpetual systems; we will discuss the main points in class.