New York University
Leonard N. Stern School of Business
PRINCIPLES OF FINANCIAL ACCOUNTING C10.0001
Spring 2007
Professor Christine Petrovits
Email: cpetrovi@stern.nyu.edu
Office: KMC 10-82
Phone: 212-998-0988
Office Hours: 2 – 3 pm Tue/Thu or by appointment
Teaching Assistants:
Juan Gaviria
juan.gaviria@stern.nyu.edu
Office hours TBA
Noa Gershony
noa.gershony@stern.nyu.edu
Office hours TBA
Course Description and Objectives
This course develops the student’s ability to measure, communicate, and evaluate financial
information. Rather than solely focusing on technical competencies, this course also emphasizes
the underlying rationale for accounting practices and the effectiveness of these practices. An
understanding of financial accounting is essential to anyone who will use financial information
as in input to economic decision making, including managers, investors, regulators, creditors and
analysts, as well as professional accountants. Specific objectives include:
1. Recognizing accounting’s role in business and government;
2. Understanding basic vocabulary, definitions and double-entry procedures associated
with accounting and financial management, especially the accounting equation
(Assets = Liabilities + Owner’s Equity);
3. Identifying the basic financial statements, the interrelationships between them and the
information they provide to decision makers;
4. Understanding the difference between cash flow and accrual accounting;
5. Becoming familiar with common analytical methods to measure business financial
performance; and
6. Gaining an appreciation of ethical issues in accounting
Course Materials
1. Horngren, Sundem, Elliott & Philbrick (2006), Introduction to Financial Accounting (9th
Edition) customized for NYU
2. Limited Brands, Inc. 2005 Annual Report
A copy of the course text book is available on reserve at Bobst Library. The lecture notes,
solutions manual and other course documents are available on Blackboard at
http://sternclasses.nyu.edu.
Class Format and Grading
This course consists of a combination of lecture and class discussion of assigned homework
problems. I will attach homework practice problems to the lecture notes. You should read the
material and attempt the homework practice problems before class. I will ask for volunteers
during class to review certain homework problems. While I do not currently plan to collect
homework, I reserve the right to ask the class to turn in a written assignment with prior notice if
class participation is unsatisfactory. The importance of doing homework on a regular basis
cannot be overemphasized. Historically students who do poorly in this course are the ones who
do not keep up with the material.
Your course grade will be computed as follows:
Class Participation / Homework
Cases
Exam 1
Exam 2
Final Exam
5%
10%
25%
25%
35%
100%
Cases: The accounting department has implemented a case requirement that all introductory
accounting students are required to complete. The cases are meant to serve as additional ‘real
world” experience that will help you master the basics of financial accounting. I will provide
more information about the cases in class.
Exam Policy: You are expected to take all exams at the scheduled times. There will be no
makeup exams for the two midterms. If you must miss a midterm, you must notify the
professor before the exam is given. Failure to do so or lack of a valid reason for your absence
will result in a score of zero for the missed exam. If you do have a valid reason for missing a
midterm, your final exam grade will be used in place of the midterm grade.
Exam 2 and the Final Exam will be cumulative, with an emphasis on material covered since the
previous exam. Students who believe that an exam has been incorrectly scored should submit a
written request for re-grading within two class days from the time the exam is returned.
Honor Code
Upon enrollment in this course, you agree to adhere to the NYU Stern Undergraduate College
Student Code of Conduct, and accept the consequences of your actions should you violate that
code. Any instances of academic misconduct will be immediately reported to the appropriate
University authorities.
Schedule
Date
Topic
Chapter
Suggested Additional Exercises from Horngren
Tue, Jan 16
Introduction
1
1-4, 1-5, 1-15
Thu, Jan 18
Balance Sheet
1
1-7, 1-8, 1-25, 1-28, 1-36, 4-9
Tue, Jan 23
Income Statement
2
2-2, 2-9, 2-11, 2-23, 2-34, 2-35, 2-55, 3-6
Thu, Jan 25
Tue, Jan 30
Recording
Transactions
3
3-17, 3-20, 3-23, 3-34, 3-40
Thu, Feb 1
Recording
Transactions
Tue, Feb 6
Thu, Feb 8
Accrual
Accounting
Thu, Feb 8
CASE 1 DUE
Tue, Feb 13
Review
Thu, Feb 15
EXAM 1 (Extended Office Hours Wednesday 3-5)
Tue, Feb 20
Thu, Feb 22
Sales & AR
6
6-1, 6-2, 6-14, 6-17, 6-34, 6-48, 6-56, 6-59
Tue, Feb 27
Thu, Mar 1
COGS & Inventory
7
7-1, 7-8, 7-14, 7-16, 7-34, 7-41, 7-47, 7-74, 7-78
Tue, Mar 6
Thu, Mar 8
Tue, Mar 13
Thu, Mar 15
Tue, Mar 20
Depreciation &
Fixed Assets
8
8-9, 8-12, 8-29, 8-31, 8-34, 8-35, 8-47
Thu, Mar 22
Review
Tue, Mar 27
Thu, Mar 29
Tue, Apr 3
Thu, Apr 5
Tue, Apr 10
Thu, Apr 12
Tue, Apr 17
Thu, Apr 19
EXAM 2 (Extended Office Hours Monday 3-5)
Case 1
4
3-45, 4-21, 4-22, 4-25, 4-27, 4-38
SPRING BREAK
Intangible Assets
8
8-15, 8-53
Current & LT
Liabilities
9
Current: 9-4, 9-31, 9-33, 9-34
LT: 9-10, 9-27, 9-41, 9-44, 9-50, 9-52, 9-56
Stockholder’s
Equity
10
10-11, 10-26, 10-33, 10-36, 10-45, 10-57
Cash Flow
Statement
5
5-2, 5-4, 5-11, 5-15, 5-30, 5-35, 5-41, 5-53, 5-58
Tue, Apr 24
Cash Flow
Statement
Case 2
Thu, Apr 26
Review
Thu, Apr 26
Thu, May 3
CASE 2 DUE
FINAL EXAM