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University of Bridgeport
School of Business
Accounting 400
Prof. Dr. David Kohn
Fall 2014
STUDENT SYLLABUS
My office is located in Mandeville Hall, Room 202
Telephone Number: 203-576-4380 (Office)
Email: dkohn@bridgeport.edu
Office Hours:
Main Campus
Monday:
2:00 PM – 7:00 PM
Tuesday: 11:00 AM – 12:45 PM
3:00 PM – 6:00 PM
Wednesday & Thursday: By Appointment
Mailing Address:
School Of Business
230 Park Ave
University of Bridgeport
Bridgeport, CT 06604
Required Text:
Financial and Managerial Accounting, 12e, published by Warren, Reeve , Duchac, Canada ISBN
# 978-1-133-95242-8, South-Western Cengage Learning
Course Description
An introduction to the basic principles of accounting, and how to account for business
transactions. Emphasis on the understanding of how financial statements are prepared, and how
they are used as a basis for decision making by business owners, investors, creditors, government
and others interested in the financial condition of an economic entity and the results of its
operation.
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Course Objective:
To gain an understanding of financial accounting, and the role of accounting information in the
overall management and evaluation of an economic entity.
To introduce students how to the use of the accounting methods and procedures.
To present the students the various forms of solving the accounting problems using different
approaches
To provide students with skills and ability to do the basic accounting cycle.
Course Topics:
The course will cover the following topics:
1. Introduction to Accounting and Business
2. Analyzing Transactions
3. The Adjusting Process
4. Completing the Accounting Cycle
5. Accounting for Merchandising Business
6. Inventories
7. Sarbanes-Oxley, Internal Control and Cash
8. Receivables
9. Fixed Assets and Intangible Assets
10. Current Liabilities and Payroll
11. Corporations: Organization, Stock Transactions, and Dividends
12. Long-Term Liabilities: Bonds and Notes
13. Investments and Fair Value Accounting
14. Statement of Cash Flows
15. Financial Statement Analysis
Intended Audience:
Graduate students at the University of Bridgeport
Approach of teaching the students:
It is requirement to study 1.5 hours per week prior to class.
Attend each class on time.
All homework and assignments are due on time.
Homework that is late for more than a week will not be accepted.
All the papers should be written according to the general accepted accounting principles.
Students will be called upon to answer every problem in class in a professional business manner.
Students are required to have a high level participation in the discussions in the class.
Quizzes will be given at the end of each class on the material covered in that class.
There will be NO make-up for Midterm and Final exams.
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Components of Course Grade:
Homework
Class Participation
Quizzes
Midterm
Final Exam
10 %
10 %
20 %
30 %
30 %
Grading Scale:
A
AB+
B
BC+
C
CHome work:
Home work is due at the beginning of each class. All home work will be reviewed. Students
must write their names and student number on the top of the page.
Assignments have to be written according to the general accepted accounting principles.
Solutions to each homework assignment will be posted on canvas under the course material.
Quizzes will be given in every class
Final Exams:
The final exam will cover all the chapters covered in class. The quizzed and Final Exam will be
similar to the home work and problems given in class. The questions could be multiple choices,
exercises or solving problems. All quizzes and the Final Exam will follow the CPA guidelines
and exams.
Classroom Rules:
Behavior to be professional in attitude and dress.
Students must speak loudly and distinctly when called on in class.
No gum chewing, wearing hats or eating food is permitted.
No radios, cell-phones or pagers are allowed.
Integrity:
No plagiarism or cheating on the exams and home works will be tolerated. Students are required
to prepare individually.
It is the student’s responsibility to familiarize himself or herself with and adhere to the standards
set forth in the policies on cheating and plagiarism as defined in Chapter 2 and 5 of the key to
UB at www.bridgeport.edu/pages/2623.asp or in the appropriate graduate program handbook.
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CURRICULUM:
August 26, 2014
CHAPTER1:
INTRODUCTION TO ACCOUNTING AND BUSINESS
Nature of Business and Accounting
 Types of Business
 The role of Accounting in Business
 Role of Ethics in Accounting and Business
 Opportunities for Accountants
Generally Accepted Accounting Principles
 International Connection: International Financial Reporting Standards (IFRS)
 Business Entity Concept
 The Cost Concept
The Accounting Equation Business Transactions and the Accounting Equation
 Business Transactions and the Accounting Equation
 Business Connection: The Accounting Equation
Financial Statements
 Income statement
 Retained earnings Statement
 Balance Sheet
 Statement of Cash Flows
 Interrelationships Among financial Statements
Financial Analysis and interpretation: Ratio of liabilities to Stockholders’ equity
September 2, 2014
CHAPTER 2:
ANALYZING TRANSACTIONS
Using Accounts to Record Transactions Chart of Accounts
 Business Connection: The Hijacking Receivable
Double-Entry Accounting System
 Balance Sheet Accounts
 Income Statement Accounts
 Dividends
 Normal Balance
 Journalizing
Posting Journal Entries to Accounts
 Business Connection: Computerized Accounting Systems
Trial Balance
 Errors Affecting the Trial Balance
 Errors Not Affecting the Trial Balance
 Financial Analysis and Interpretation: Horizontal Analysis
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September 9, 2014
CHAPTER: 3
THE ADJUSTING PROCESS
Nature of the Adjusting Process
 The Adjusting Process
 Types of Accounts Requiring Adjustment
Adjusting Entries
 Prepaid Expenses
 Unearned Revenues
 Accrued revenues
 Accrued Expenses
 Depreciation Expense
 Business Connection: Ford Motor Company Warranties
Summary of Adjustment Process
 Business Connection: Microsoft Corporation
Adjusted Trial Balance
 Financial Analysis and Interpretation: Vertical Analysis
September 16, 2014
CHAPTER 4:
COMPLETING THE ACCOUNTING CYCLE
Flow of Accounting Information
 Financial Statements
 Income Statements
 Retained Earnings Statement
 Balance Sheet
 International Connection: International Differences
Closing Entries
 Journalizing and Posting Closing Entries
 Post-Closing Trial Balance
Accounting Cycle
Illustration of the Accounting Cycle
 Step 1 Analyzing and recording Transactions in the Journal
 Step 2 Posting Transactions to the Ledger
 Step 3 Preparing and Unadjusted Trial balance
 Step 4 Assembling and Analyzing Adjustment Data
 Step 5 Preparing and Optional End-of- Period Spreadsheet
 Step 6 Journalizing and Posting
 Step 7 Preparing and Adjusted trial Balance
 Step 8 Preparing the Financial Statements
 Step 9 Journalizing and Posting Closing Entries
 Step 10 Preparing a Post-Closing Trial Balance
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Fiscal Year
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Business Connection: Choosing a Fiscal Year
Financial Analysis and Interpretation: Working Capital and Current Ratio
Appendix: End-of-Period Spreadsheet
Step 1 Enter the Title
Step 2 Enter the Unadjusted Trial Balance
Step 3 Enter the Adjustments
Step 4 Enter the Adjusted Trial Balance
Step 5 Extend the Accounts to the Income Statement and Balance Sheet Columns
Step 6 Total the Income Statement and Balance Sheet Columns, Compare the Net
Income or Net loss, and Complete the Spreadsheet
Comprehensive Problem
September 23, 2014
CHAPTER 5:
ACCOUNTIG FOR MERCHANDISING BUSINESS
Nature of Merchandising Businesses
Financial Statements for a Merchandising Business
 Multiple-Step Income Statement
 Single- Step Income Statement
 Retained Earnings Statement
 Balance Sheet
Merchandising Transactions
 Chart of Accounts for a Merchandising Business
 Sales Transactions
 Purchase Transactions
 Freight
 Summary: Recording Merchandise Inventory
 Sales Taxes and Trade Discounts
 Business Connection: Sales Taxes
 Dual Nature of Merchandise Transactions
The Adjusting and Closing Process
 Adjusting Entry for Inventory Shrinkage
 Closing Entries
 Financial Analysis and Interpretation: Ratio of Net Sales to Assets
Appendix: The Periodic Inventory System
 Cost of Merchandise Sold Using the Periodic Inventory System
 Chart of Accounts Under the Periodic Inventory System
 Financial Statements Under the Periodic Inventory System
 Recording Merchandise transactions under the Periodic Inventory System
 Adjusting Process Under the Periodic Inventory System
 Financial Statements Under the Periodic Inventory System
 Closing Entries Under the Periodic Inventory System
Comprehensive Problem
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September 30, 2014
CHAPTER 6:
INVENTORIES
Control of Inventory
 Safeguarding Inventory
 Reporting Inventory
Inventory Cost flow Assumptions
Inventory Costing Methods Under a Perpetual Inventory System
 First-in, First-out Method
 Last-in, First-out Method
 International Connection: International Reporting Standards (IFRS)
 Average Cost Method
 Computerized Perpetual Inventory Systems
Inventory Costing Methods Under a Periodic Inventory System
 First-in, First-out Method
 Last-in, First-out Method
 Average Cost Method
Comparing Inventory Costing Methods
Reporting Merchandise Inventory in the Financial Statements
 Valuation at Lower of Cost or Market
 Valuation at Net Realizable Value
 Merchandise Inventory on the Balance Sheet
 Effect of Inventory Errors on the Financial Statements
 Summary of Effects of Inventory Errors
 Business Connection: Rapid Inventory at Costco
 Financial Analysis and Interpretation: Inventory Turnover and Number of Day’s
Sales in Inventory
Appendix: Estimating Inventory Cost
 Retail Method of Inventory Costing
 Gross Profit Method of Inventory Costing
October 7, 2014
CHAPTER 7:
SARBANES – OXLEY ACT OF 2002
Internal Control
 Objectives of Internal Control
 Business Connection: Employee Fraud
 Elements of Internal Control
 Control Environment
 Risk Assessment
 Control Procedure
 Monitoring
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 Information and Communication
 Limitation of Internal Control
Cash Controls Over Receipts and Payments
 Control of Cash Receipts
 Controls of Cash Payments
Bank Accounts
 Bank Statement
 Using the Bank Statement as a Control over Cash
Bank reconciliation
Special-Purpose Cash Funds
Financial Statement Reporting of Cash
 Financial Analysis and Interpretation: Ratio of Cash to Monthly Cash Expenses
 Business Connection: Microsoft Corporation
October 14, 2014 (MIDTERM EXAMS)
October 21, 2014
CHAPTER 8:
RECEIVABLES
Classification of Receivables
 Accounts Receivable
 Notes Receivable
 Other Receivable
Uncollectable Receivables
Direct Write-off Method for Uncollectible Accounts
Allowance Methods for Uncollectible Accounts
 Write-offs to the Allowance Account
 Estimating Uncollectible
 Business Connection: Allowance Percentages across Companies
Comparing Direct Write-off and Allowance Methods
Notes Receivable
 Characteristics of Notes Receivable
 Accounting for Notes Receivable
Reporting Receivables on the Balance Sheet
 Financial Analysis and Interpretation: Accounts Receivable Turnover and
Number of Days’ Sales in receivables
 Business-Connection: Delta Air Lines
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October 28, 2014
CHAPTER 9:
FIXED ASSETS AND INTANGIBLE ASSETS
Nature of Fixed Assets
 Classifying Costs
 The Cost of Fixed Assets
 Capital and Revenue Expenditures
 Leasing Fixed Assets
Accounting for Depreciation
 Factors in Computing Depreciation Expense
 Straight-Line Method
 Units-of-Production Method
 Double-Declining – Balance Method
 Comparing Depreciation Methods
 Depreciation for Federal Income Tax
 Business Connection: Depreciation Animals
 Revising Depreciation Estimates
Disposal of Fixed Assets
 Discarding Fixed Assets
 Selling Fixed Assets
Natural Resources
Intangible Assets
 Patents
 International Connections: International Financial Reporting Standards (IFRS)
 Copyrights and Trademarks
 Goodwill
Financial Reporting for Fixed Assets and Intangible Assets
 Financial Analysis and Interpretation: Fixed Asset Turnover Ratio
 Business Connection: Hub-and-Spoke or Point-to Point
Appendix: Exchanging Similar Fixed Assets
 Gain on Exchange
 Loss on Exchange
November 4, 2014
CHAPTER 10:
CURRENT LIABILITIES AND PAYROLL
Current Liabilities
 Accounts Payable
 Current Portion of Long-Term Debt
 Short-Term Notes Payable
Payroll and Payroll Taxes
 Liability for Employee Earnings
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 Deduction from Employee Earnings
 Computing Employee Net Pay Liability for Employer’s Payroll Taxes
 Business Connection: The Most You Will Ever Pay
Accounting Systems for Payroll and Payroll Taxes
 Payroll Register
 Employer’s Earnings Record
 Payroll Checks
 Payroll System Diagram
 Internal Controls for Payroll Systems
Employees’ Fringe Benefits
 Vacation Pay
 Pensions
 Postretirement Benefits Other than Pensions
 Current Liabilities on the Balance Sheet
 Business Connection: General Motors Pension Problems
Contingent Liabilities
 Probable and Estimable
 Probable and Not Estimable
 Reasonably Possible
 Remote
 Financial Analysis and Interpretation: Quick Ratio
Comprehensive Problem
November 11, 2014
CHAPTER 11:
CORPORATION: OORGANIZATION, STOCK TRANSACTION, AND DIVIDENDS
Nature of Corporation
 Characteristics of a Corporation
 Forming a Corporation
Pain-In Capital from Issuing Stock
 Characteristics of Stock
 Classes of Stock
 Issuing Stock Premium on Stock
 No-Par Stock
 Business Connection: Cisco Systems, Inc.
 International Connection: IFRS for SMEs
Accounting for Dividends
 Cash Dividends
 Stock Dividends
Treasure Stock Transactions
Reporting Stockholders’ Equity
 Stockholders’ Equity on the Balance Sheet
 Reporting Retained Earnings
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Stock Splits
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Statement of Stockholders’ Equity
Reporting Stockholders’ Equity for Mornin’Joe
Business Connection: Buffet on Stock Splits
Financial Analysis and Interpretation: Earnings per Share
November 18, 2014
CHAPTER 12:
LONG – TERM LIABILITIES: BONDS AND NOTES
Financing Corporations
Nature of Bonds Payable
 Bonds Characteristics and Terminology
 Proceeds from Issuing Bonds
 Business Connection: U.S. Government Debt
Accounting for Bonds Payable
 Bonds Issued at Face Amount
 Bonds Issued at a Discount
 Amortizing a Bond Discount
 Bonds Issued at a Premium
 Amortizing a Bond Premium
 Business Connection: General Motors Bonds
 Bonds Redemption
Installment Notes
 Issuing an Installment Note
 Annual Payments
Reporting Long-Term Liabilities
 Financial Analysis and Interpretation: Number of Times Interest Charges are
Earned
Appendix 1: Present Value Concepts and Pricing Bonds Payable
 Present Value Concepts
 Pricing Bonds
Appendix 2: Effective Interest Rate Method of Amortization
 Amortization of Discount by the interest Method
 Amortization of Premium by the interest Method
November 25, 2014
CHAPTER 13:
INVESTMENTS AND FAIR VALUE ACCOUNTING
Why Companies Invest
 Investing Cash in Current Operations
 Investing Cash in Temporary Investments
 Investing Cash in Long-Term Investments
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Accounting for Debt Investments
 Purchase of Bonds
 Interest Revenue
 Sale of Bonds
Accounting for Equity Investments
 Less Than 20% Ownership
 Between 20% - 50% Ownership
 More Than 50% Ownership
 Business Connection: Apple’s Entrance to Steaming music
Valuing and Reporting Investments
 Trading Securities
 Available – for Sale Securities
 Held-to-Maturity Securities
 Summary
 Business Connection: Warren Buffet: The Sage of Omaha
Fair Value Accounting
 Trend to Fair Value Accounting
 Effect of Fair Value Accounting on the Financial Statements
 Financial Analysis and Interpretation: Dividend Yield
Appendix: Comprehensive Income
Comprehensive Problem
 Financial Statements for Mornin’Joe
November 25, 2014 (Continued)
CHAPTER 14:
STATEMENT OF CASH FLOWS
Reporting Cash Flows
 Cash Flows from Operating Activities
 Cash Flows from Investing Activities
 Cash Flows from Financing Activities
 Noncash Investing and Financing Activities
 No Cash Flow per Share
Statement of Cash Flows-The Indirect Method
 Retained Earnings
 Adjustments to Net Income
 Business Connection: Cash Crunch
 Dividends
 Common Stock
 Bonds Payable
 Building
 Land
 Preparing the Statement of Cash Flows
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Statement of Cash Flows- The Direct Method
 Cash Received from Customers
 Cash Payments for Merchandise
 Cash Payments for Operating expenses
 Gain on Sale of Land
 Interest Expense
 Cash Payments for Income Taxes
 Reporting Cash Flows from operating Activities-Direct Method
 International Connection: IFRS for Statement of Cash Flows
 Financial Analysis and Interpretation: Free Cash Flow
Appendix: Spreadsheet for Statement of Cash Flows-The Indirect Method
 Analyzing Accounts
 Retained Earnings
 Other Accounts
 Preparing the Statement of Cash Flows
December 5, 2013 – FINAL EXAM
Syllabus subject to change