Date
Course Title
Financial Accounting
Management
Credits
Course Number
3
FI 50800
None
Pre-requisite (s)
None
Co-requisite (s)
Hours
45
Out of Class 90
Work Hours
Place and Time of Class Meeting
San Ignacio University
3905 NW 107th Avenue, Suite 301,
Miami, FL 33178
Name and Contact Information of Instructor
Book required
(San Ignacio University, recognizes the use of the textbook in the classroom as part of the educational
methodology and strategy applied in diverse materials. The textbook is part of the curriculum and is used
to reach the student in an effective manner in the classroom. Every student is expected to acquire and use
the textbook.)
Financial Accounting: The Impact on Decision Makers, 8th Edition
Gary A. Porter & Curtis L. Norton
©2013 | South Western Cengage Learning | Published: 2012
ISBN-10: 1-111-53486-1| ISBN-13: 978-1-111-53486-8
Classroom expectations for students
Attendance Policy
Students are expected to attend all scheduled University classes for the courses that they are
registered for and to achieve the goals set forth by each class instructor. Attendance is taken
daily. Enrolled students are permitted no more than 2 “free” absences in one semester. Students
missing 3-5 classes over the course of the semester will receive a one-letter grade deduction from
their final course grade; missing more than 6 classes will result in failure of the course regardless
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of grade average. It is the student's responsibility to arrange to make up work missed because of
an absence.
Student Tardiness Policy
A student is considered tardy/late if he/she comes to class 15 minutes late. With three tardies the
student accumulates one full absence. If the student misses half of the class period, it is a full
absence. When a student has more than 6 tardies, the instructor will contact the Universidad
Autonoma del Caribe Coordinator of Student Affairs and Academic Department and request an
intervention session with the student. The goal of the intervention session is to develop and
implement an intervention program to help students learn new ways to save and manage time.
NOTE: Plagiarism is defined as the use, without proper acknowledgment, of the ideas, phrases,
sentences, or larger units of discourse from another writer or speaker. Plagiarism includes the
unauthorized copying of software and the violation of copyright laws. Students who commit
plagiarism will obtain a grade of “Failure” on their exam or assignment.
Course Description (must correspond exactly to Catalog description)
This course will investigate the techniques and importance of effective data management in
schools. Discussions will range from key concepts to useful data resources. Among the topics
covered are: Targets, surveys, key performance indicators, and the assessment of learning and
student achievement.
Learning Objectives
At the end of this course the student will be able to:
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List and explain different forms of business organizations.
Describe the various types of business activities.
Explain how to use a classified balance sheet to analyze a company’s financial position.
Illustrate the benefit of using a cross referencing system between a ledger and a journal.
Identify and discuss the rules of debit and credit as they apply to contra asset account
Accumulated Depreciation.
List and explain the distinct types of costs that manufacturers incur.
Explain why companies use contra accounts to account for returned merchandise.
Analyze the effects of the different costing methods on inventory, net income, income
taxes, and cash flow.
Analyze the effects of an inventory error on various financial statement ítems.
Explain the Sarbanes-Oxley Act of 2002.
Explain various techniques that companies use to accelerate the inflow of cash from
sales.
Explain which expenditures should be capitalized as asset cost and which should be
treated as expenses.
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Describe how to determine when contingent liabilities should be presented on the balance
sheet or disclosed in notes and how to calculate their amounts.
Discuss whether a lease agreement must be reported as a liability on the balance sheet.
Describe how to determine the financial statement impact when stock is issued for cash
or for another consideration
Explain the convertible feature that allows preferred stock to be exchanged for common
stock.
Describe how to use a worksheet to prepare a statement of cash flows using the indirect
method to determine cash flow from operating activities.
Explain acid test or quick ratio as a stricter test of liquidity than the current ratio,
excludes inventory and prepayments from the numerator.
Topical Outline and Schedule
DATE
SPECIFIC
OBJECTIVES
TOPIC (S)
WEEK 1
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Describe the course.
Explain what business is.
List and explain different forms of business organizations.
Describe the various types of business activities.
Define accounting and identify the primary users of accounting
information and their needs.
Explain the purpose of each of the financial statements.
Illustrate how to prepare simple statements.
Describe the relationship among statements.
Explain assets and liabilities.
Compare and contrast financial accounting and managerial accounting.
Define the term cost principle.
Syllabus
Discuss Library Orientation Course, Instructor to verify completion
Identify and explain the primary assumptions made in preparing
financial statements.
Identify the various groups involved in setting accounting standards.
Explain the role of auditors in determining whether the appropriate
standards are followed.
Explain the critical role that ethics plays in providing useful financial
information.
Discuss why all decision makers must consider the moral and social
implications of their decisions.
Explain the role that the Securities and Exchange Commission plays in
setting accounting standards.
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Define the purpose of the income statement.
Discuss the most important provisions of the Sarbanes-Oxley Act.
Define and discuss generally accepted accounting principles.
Explain the relationship between the cost principle and the going
concern assumption.
LEARNING Discussion of Syllabus.
ACTIVITIES Discuss current issues in the accounting field.
Group discussion: key terms quiz on page 31.
Completion of exercises and problems.
HOMEWORK Review the Syllabus.
& ASSIGNED Complete the Library Orientation Course. Instructor to verify completion.
Read chapter 1 and complete EXERCISES on pages 36 to 40: 1-1 to 1-16,
READINGS
submit and be prepared to discuss in class.
Read chapter 2 and complete EXERCISES on pages 89 to 92: 2-1 to 2-14,
submit and be prepared to discuss in class.
DATE
WEEK 2
SPECIFIC
• Describe the objectives of financial reporting.
OBJECTIVES
• Explain the qualitative characteristics of accounting information.
• Explain the concept and purpose of a classified balance sheet.
• Illustrate how to prepare a balance sheet.
• Explain how to use a classified balance sheet to analyze a company’s
financial position.
• Discuss relevance with regard to the use of accounting information,
• Explain the qualitative characteristics of comparability.
• Define how the concept of materiality relates to the size of a company.
• Describe how the concept of the operating cycle relates to the
definition of a current asset.
• Compare and discuss capital stock and retained earnings.
TOPIC (S)
• Discuss Final Class Project & Presentation,
• List of Topics
• Illustrate how to use a multiple step income statement to analyze a
company’s operations.
• Identify the components of the statement of retained earnings and
prepare the statement.
• Identify the components of the statement of cash flows and prepare the
statement.
• Explain how to read and use the financial statements and other
elements in the annual report of a publicly held company.
• Compare the limitations of working capital as a measure of the
liquidity of a business as opposed to the current ratio.
• Define a company’s capital structure.
• Explain the major weakness of the single step form for the income
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statement.
Illustrate how the statement of retained earnings acts as a link between
an income statement and a balance sheet.
• Identify the elements of an annual report.
• Explain the multiple step format for the income statement.
LEARNING Group discussion: key terms quiz on page 127.
ACTIVITIES Completion of exercises and problems.
Participate in a forum: Warm-Up Exercises And Solutions on page 127 and
128, 3-1 to 3-3.
HOMEWORK Read chapter 3.
& ASSIGNED Complete EXERCISES on page 132 to 136, 3-1 to 3-17, submit and be
prepared to discuss in class.
READINGS
DATE
WEEK 3
SPECIFIC
• Explain the difference between external and internal events.
OBJECTIVES
• Explain the role of source documents in an accounting system.
• Analyze the effects of transactions on the accounting equation.
• Discuss how transactions affect the balance sheet and the income
statement.
• Describe the events that affect an entity.
• Define source documents and explain the significance to the recording
process.
• Define the four different types of cash.
• Compare an account receivable and a note receivable.
• Define and explain the double entry system of accounting.
• Compare and explain Capital Stock and Retained Earnings accounts,
TOPIC (S)
• Discussion of student topic selection, library research, tentative
bibliography
• Define the T accounts as a method for analyzing transactions.
• Explain the rules of debits and credits.
• Define the purposes of a journal and the posting process.
• Explain the purpose of a trial balance.
• Explain what transactions increase an asset and a liability.
• Discuss how a T account differs from the running balance form.
• Illustrate the benefit of using a cross referencing system between a
ledger and a journal.
• Define the purpose of a trial balance.
• Explain how often a company should post entries from the journal to
the ledger.
LEARNING Group discussion: key terms quiz on page 191.
ACTIVITIES Completion of exercises and problems.
Participate in a forum: discuss QUESTIONS on page 197, 1 to 5
HOMEWORK Library Research. Develop Tentative Bibliography.
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& ASSIGNED
READINGS
Due: Project Topic.
Due: Tentative Bibliography.
Read chapter 4.
Complete the EXERCISES on pages 199 to 202: 4-1 to 4-17, submit and be
prepared to discuss in class.
DATE
WEEK 4
SPECIFIC
• Explain the significance of recognition and measurement in the
OBJECTIVES
preparation and use of financial statements.
• Explain the differences between the cash and accrual bases of
accounting.
• Describe the revenue recognition principle and explain its application
in various situations.
• Describe the matching principle.
• Explain the various methods for recognizing expenses.
• Explain the cash basis of accounting.
• Describe depreciation in the accounting system.
• List and explain the four basic types of adjusting entries.
• Identify and discuss the rules of debit and credit as they apply to contra
asset account Accumulated Depreciation.
• Identify and explain the difference between a real account and a
nominal account.
TOPIC (S)
Due: Project Topic
Due: Tentative Bibliography
• Identify the four major types of adjusting entries and prepare them for
a variety of situations.
• Explain the steps in the accounting cycle and the significance of each
step.
• Explain why and how closing entries are made at the end of the
accounting period.
• Illustrate how to use a work sheet as a basis for preparing financial
statements.
• Discuss the accrual basis of accounting.
• Explain the relationship between the time period assumption and
accrual accounting.
• Explain the purpose of making closing entries.
• Identify and explain recognition and measurement in financial
statements.
• Explain what the income statement and the statement of cash flow
reveals.
• Describe the method to record cash received before the revenue is
earned.
LEARNING Group discussion: key terms quiz on page 273.
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Completion of exercises and problems.
Participate in a forum: questions on page 278, 1 to 4, 7, and 16.
HOMEWORK Continue research and work on final project.
& ASSIGNED Read chapter 5.
Complete EXERCISES on pages 280 to 286:5-1 to 5-22, submit and be
READINGS
prepared to discuss in class.
DATE
WEEK 5
SPECIFIC
• Identify the forms of inventory held by different types of businesses
OBJECTIVES
and the types of costs incurred.
• Illustrate how wholesalers and retailers account for sales of
merchandise.
• Demonstrate how wholesalers and retailers account for cost of goods
sold.
• List and explain the distinct types of costs that manufacturers incur.
• Explain why companies use contra accounts to account for returned
merchandise.
• Explain discount credit terms and discuss the benefits to the customer.
• Discuss how point of sale terminals improved the ability of mass
merchandisers to use a perpetual inventory system.
• Describe the term FOB and explain how ownership is determined at
the end of the year.
• Explain why transportation in and transportation out is recorded
differently.
• Discuss how a company’s gross profit is determined.
TOPIC (S)
• Illustrate how to use the gross profit ratio to analyze a company’s
ability to cover its operating expenses and earn a profit.
• Explain the relationship between the valuation of inventory and
measurement of income.
• Illustrate how to apply the inventory costing methods of specific
identification, weighted average, FIFO, and LIFO by using a periodic
system.
• Compare and explain periodic inventory and perpetual inventory.
• Explain what the gross profit ratio determines about a company’s
performance during the year.
• Discuss the relationship between the valuation of inventory as an asset
on the balance sheet and the measurement of income.
• Explain the justification for including freight costs incurred in
acquiring incoming goods in the cost of inventory.
• Identify the inventory characteristics that would allow a company to
use the specific identification method.
• Explain how specific identification method can allow management to
manipulate income.
ACTIVITIES
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• Discuss the three forms of inventory.
LEARNING Group discussion: decision cases on page 299 and 300, 5-1 and 5-2.
ACTIVITIES Completion of exercises and problems.
HOMEWORK Continue research and work on final project.
& ASSIGNED Read chapter 5.
Complete PROBLEMS on pages 288 to 294: 5-1 to 5-14, submit and be
READINGS
prepared to discuss in class.
DATE
WEEK 6
SPECIFIC
• EXAM I
OBJECTIVES
• Analyze the effects of the different costing methods on inventory, net
income, income taxes, and cash flow.
• Analyze the effects of an inventory error on various financial statement
ítems.
• Explain the lower of cost or market rule to the valuation of inventory.
• Discuss the significance of the weighted average cost method.
• Describe the physical inventory LIFO and FIFO.
• Explain the term LIFO liquidation.
• Discuss the rationale for valuing inventory at the lower cost or market.
• Explain what should be included in inventory costs.
• Discuss why if a company uses LIFO for tax purposes it must use it for
financial reporting purposes as well.
• List and explain of effects of inventory errors.
TOPIC (S)
• Explain the effects that inventory transactions have on the statement of
cash flows.
• Analyze the management of inventory.
• Explain the difference in the accounting for periodic and perpetual
inventory costing methods using a perpetual system.
• Illustrate why the weighted average cost method called a moving
average when a company uses a perpetual inventory system.
• Explain why replacement costs is used as a measure of market.
• List and explain the ratio decisión model.
• Explain the turnover ratio.
• Identify multiple account titles and where they appear.
• Explain moving average.
• Describe the measure of the number of times inventory is sold during a
period.
LEARNING Group discussion: DECISION CASES on page 342, 6-1 and 6-2.
ACTIVITIES Completion of exercises and problems.
HOMEWORK Read chapter 6.
& ASSIGNED Complete the EXERCISES on pages 336 to 338: 6-1 to 6-9.
Complete PROBLEMS on pages 330 to 340: 6-1 to 6-4, submit both and be
READINGS
prepared to discuss in class.
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DATE
SPECIFIC
OBJECTIVES
WEEK 7
• Identify and describe the various forms of cash reported on a balance
sheet.
• Illustrate various techniques that companies use to control cash.
• Explain the importance of internal controls to a business.
• Discuss what a cash equivalent is.
• Discuss the difference between a debit memoranda and a debit to an
asset.
• Identify and explain the typical composition of a board of directors of a
publicly held company.
• List and explain the limitations of a company’s effective system of
internal control.
• Explain the use of a purchase order for the purposes of recording.
• Discuss cash equivalents and the statement of cash flows.
• Describe the role of computerized business documents in controlling
cash disbursements.
TOPIC (S)
• Explain the Sarbanes-Oxley Act of 2002.
• Describe the basic internal control procedures.
• Describe the various documents used in recording purchases and their
role in controlling cash disbursements.
• Explain why cash equivalent is included on the balance sheet.
• Discuss the purpose of an invoice to record a purchase.
• Explain the blind receiving report.
• Describe the purpose of comparing a purchase invoice with a purchase
order.
• Explain how to read a typical bank statement.
• Discuss the need for adjustments to records.
• Describe how to establish a petty cash fund.
LEARNING Group discussion: DECISION CASES on page 389 and 390, 7-1 and 7-2.
ACTIVITIES Completion of exercises and problems.
HOMEWORK Continue research and work on final project.
& ASSIGNED Read chapter 7.
Complete the EXCERCISES on pages 379 to 383, 7-1 to 7-19, submit and be
READINGS
prepared to discuss in class.
DATE
WEEK 8
SPECIFIC
• Illustrate how to account for accounts receivable, including bad debts.
OBJECTIVES
• Explain how information about sales and receivables can be combined
to evaluate how efficient a company is in collecting its receivables.
• Demonstrate how to account for interest bearing notes receivable.
• Explain the theoretical justification for the allowance method of
accounting for bad debts.
• Discuss the Allowance for Doubtful Accounts.
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Explain the advantage of using an aging schedule when estimating bad
debts.
• Discuss how to treat any fees or commissions paid to purchase stock in
another company.
• Explain the purpose of the subsidiary ledger.
• Discuss the valuation of accounts receivable.
• Describe how to write off uncollectible accounts with the allowance
method.
TOPIC (S)
• Explain various techniques that companies use to accelerate the inflow
of cash from sales.
• Illustrate the accounting for and disclosure of various types of
investments that companies make.
• Explain the effects of transactions involving liquid assets on the
statement of cash flow.
• Describe the distinction between an account receivable and a note
receivable.
• Explain why discounting of a note receivable with recourse result in a
contingent liability.
• Discuss the difference between current and noncurrent assets.
• Describe the aging of accounts receivable.
• Illustrate how to analyze the accounts receivable rate of collection.
• List and explain important terms connected with promissory notes.
• Explain valuation and reporting for investments on the financial
statements.
LEARNING Group discussion: DECISION CASES on page 439, 8-1
ACTIVITIES Participate in a forum: DECISION CASES on page 440: 8-3
Completion of exercises and problems.
HOMEWORK Continue research and work on final project.
& ASSIGNED Read chapter 8.
Complete the EXERCISES on pages 429 to 432: 8-1 to 8-13, submit and be
READINGS
prepared to discuss in class.
DATE
WEEK 9
SPECIFIC
• Explain the balance sheet disclosures for operating assets.
OBJECTIVES
• Describe how to determine the acquisition cost of an operating asset.
• Explain how to calculate the acquisition cost of assets purchased for a
lump sum.
• Describe the impact of capitalizing interest as part of the acquisition
costs of an asset.
• Compare depreciation methods and understand the factors affecting the
choice of method.
• Discuss the impact of a change in the estimate of the asset life or
residual value.
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Explain the term acquisition cost of operating assets.
Discuss why it is important to account separately for the cost of land
and building even when the two assets are purchased together.
• Describe under which circumstances interest should be capitalized as
part of the cost of an asset.
• Discuss why companies use the straight-line depreciation method.
TOPIC (S)
• Explain which expenditures should be capitalized as asset cost and
which should be treated as expenses.
• Describe how to analyze the effect if the disposal of an asset at a gain
or loss.
• Discuss the balance sheet presentation of intangible assets.
• Illustrate the proper amortization of intangible assets.
• Explain the impact that long term assets have on the statement of cash
flows.
• Describe how investors can analyze a company’s operating assets.
• Define the terms capital expenditures and revenue expenditures.
• List and explain intangible assets and where they appear in the balance
sheet.
• Define the term goodwill.
• Describe disposal of property, plant, and equipment.
LEARNING Group discussion: DECISION CASES on page 440, 8-4.
ACTIVITIES Discuss current issues in the accounting field.
Completion of exercises and problems.
HOMEWORK Continue research and work on final project.
& ASSIGNED Read chapter 9.
Complete PROBLEMS on pages 432 to 439: 8-1 to 8-11A, submit and be
READINGS
prepared to discuss in class.
DATE
WEEK 10
SPECIFIC
• Identify the components of the Current Liability category of the
OBJECTIVES
balance sheet.
• Describe how accruals affect the Current Liability category.
• Explain how changes in current liabilities affect the statement of cash
flows.
• Define current liabilities and discuss why it is important to distinguish
current from long term liabilities.
• Explain contingent liabilities.
• Illustrate the difference between simple interest and compound interest.
• Explain when to determine whether to calculate present value and
future value of an amount.
• Explain the meaning of annuity.
• Illustrate how to determine the interest rate of a loan.
• Discuss current maturities and long-term debt.
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TOPIC (S)
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Describe how to determine when contingent liabilities should be
presented on the balance sheet or disclosed in notes and how to
calculate their amounts.
• Explain the difference between simple and compound interest.
• Illustrate how to calculate amounts using the future value and present
value concept.
• Describe how to apply compound interest concepts to some common
accounting situations.
• Discuss why contingent liabilities are accounted for differently than
contingent assets.
• Explain how a pending law suit should be disclosed on the financial
statement.
• Illustrate the effect when interest is compounded quarterly versus
annually.
• Define the meaning of the term present value and future value.
• Identify contingent liabilities that are recorded.
• Explain the impact of transactions involving contingent liabilities on
the statement of cash flows.
LEARNING Group discussion: DECISION CASES on page 550, 10-1 and 10-2.
ACTIVITIES Completion of exercises and problems.
HOMEWORK Continue research and work on final project.
& ASSIGNED Read chapter 10.
Complete the exercises on page 541 to 545: 10-1 to 10-17, submit and be
READINGS
prepared to discuss in class.
DATE
WEEK 11
SPECIFIC
• Identify the components of the long-term liability category of the
OBJECTIVES
balance sheet.
• Define the important characteristics of bonds payable.
• Illustrate how to determine the issue price of a bond using compound
interest techniques.
• Explain the effect on the balance sheet of the issuance of bonds.
• Describe how to find the amortization of premium or discount using
the effective interest method.
• Explain the tax advantage that companies experience when bonds are
issued instead of stock.
• Describe how the effective interest methods of amortization result in a
constant rate of interest.
• Define the term off balance sheet financing.
• Illustrate the effects on the financial statements when a lease is
considered an operating lease rather than a capital lease.
• Discuss deferred tax.
TOPIC (S)
• Illustrate how to find gain or loss on retirement of bonds.
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Discuss whether a lease agreement must be reported as a liability on
the balance sheet.
• Explain how investors use ratios to evaluate long term liabilities.
• Explain the effects that transactions involving long term liabilities have
on the statement of cash flows.
• Discuss deferred taxes and calculate the deferred tax liability.
• Explain how to determine whether an item should reflect a permanent
or a temporary difference when calculating the deferred tax amount.
• Illustrate the balance sheet presentation of long term liabilities.
• List and explain factors affecting bond prices.
• Discuss the financial statement presentation of gain or loss.
• Describe how to analyze debt to assess a firm’s ability to pay its
liabilities.
LEARNING Group discussion: DECISION CASES on page 612, 11-1.
ACTIVITIES Completion of exercises and problems.
HOMEWORK Read chapter 11.
& ASSIGNED Complete the EXERCISES on pages 597 to 603:11-1 to 11-22, submit and be
prepared to discuss in class.
READINGS
Due: First Draft of Final Project
DATE
WEEK 12
MIDTERM EXAM II
SPECIFIC
OBJECTIVES
• Illustrate the characteristics of common and preferred stock.
• Describe how to determine the financial statement impact when stock
is issued for cash or for another consideration.
• Illustrate the statement of stockholders equity and comprehensive
income.
• Discuss how investors use ratios to evaluate stockholders equity.
• Explain the effects that transactions involving stockholders equity have
on the statement of cash flows.
• Illustrate how to record the purchase of treasury stock.
• Discuss retirement of stock.
• Explain that a dividend is not an expense on the income statement.
• Illustrate computing dividends payments for noncumulative preferred
stock.
• Discuss the issuance of additional shares of stock to existing
stockholders.
TOPIC (S)
• Describe the important differences between the sole proprietorship and
partnership forms of organizations versus the corporate form.
• Explain what preferred stock is.
• Discuss what treasury stock is.
• List and explain dividends.
• Explain what comprehensive income is.
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Illustrate how to record the declaration of a large stock dividend.
Explain the creation of additional shares of stock with a reduction of
the par value of the stock.
• Illustrate the relationship between the income statement and the
statement of comprehensive income.
• Discuss total stockholders equity dividend by the number of share of
common stock outstanding,
• Explain how to analyze book value per share.
LEARNING Group discussion: DECISION CASES on page 613, 11-3.
ACTIVITIES Completion of exercises and problems.
HOMEWORK Read chapter 11.
& ASSIGNED Complete the PROBLEMS on pages 603 to 607, 11-1 to 11-14, submit and be
prepared to discuss in class.
READINGS
DATE
WEEK 13
SPECIFIC
• Describe the financial statement impact of stock treated as treasury
OBJECTIVES
stock.
• Illustrate how to compute the amount of cash dividends when a firm
has issued both preferred and common stock.
• Explain the difference between cash and stock dividends.
• Explain the concept of stockholders equity.
• Identify the components of the stockholders equity.
• Explain dividend payout ratio.
• Describe authorized shares.
• Explain that treasury stock is included in the number of shares issued.
• Discuss additional paid in capital.
• Explain par value.
TOPIC (S)
• List the stockholders equity accounts listed on the balance sheet.
• Identify the accounts found in each component.
• Discuss the differences between the classes of stock.
• Explain the effect of stock dividends on cash.
• Explain the difference between stock dividends and stock splits.
• Describe retained earnings.
• Explain the convertible feature that allows preferred stock to be
exchanged for common stock.
• Discuss the participating feature of a preferred stock.
• Identify how to record stock issued for cash.
• List and explain the requirements of treasury stock.
Group
discussion: DECISION CASES on page 691, 12-1.
LEARNING
ACTIVITIES Completion of exercises and problems.
HOMEWORK Editing & Revision of Final Project.
& ASSIGNED Read chapter 12.
Complete the EXERCISES on pages 669 to 674: 12-1 to 12-19, submit and be
READINGS
14 | P a g e
prepared to discuss in class.
DATE
SPECIFIC
OBJECTIVES
WEEK 14
• Explain the concept of cash flows and accrual accounting.
• Explain what cash equivalents are and how they are treated on the
statement of cash flow.
• Describe operating, investing, and financing activities.
• Describe the difference between the direct and indirect methods of
computing cash flow from operating activities.
• Illustrate how to use the direct method to determine cash flow from
operating activities.
• Illustrate how to use T accounts to prepare a statement of cash flows
using the indirect method.
• Describe how to use cash flow information to help analyze a company.
• Explain why it is necessary to analyze both inventory and accounts
payable on trying to determine cash payments to suppliers.
• Explain where to find the information needed to determine a
company’s cash flow adequacy.
• Identify and explain two methods of reporting cash flow from
operating activities.
TOPIC (S)
• Explain the purpose of a statement of cash flows.
• Illustrate how to use T accounts to prepare statements of cash flows
using the direct method.
• Describe how to use a worksheet to prepare a statement of cash flows
using the indirect method to determine cash flow from operating
activities.
• List and explain the cash classification for accounting,
• Identify the reporting requirements for a statement of cash flow.
• Discuss cash equivalents as an item readily convertible to a know
amount of cash with a maturity to the investor of three months or less.
• List and explain the classification of items on the statement of cash
flows.
• Discuss the accounting equation and the statement of cash flows.
• Identify how to enter salaries and wages expense and salaries and
wages payable.
• Describe how to account for insurance expense and prepaid insurance.
LEARNING Group discussion: QUESTIONS on page 734, 1 and 2.
ACTIVITIES Completion of exercises and problems.
HOMEWORK Editing & Revision of Final Project.
& ASSIGNED Read chapter 13.
Complete the EXERCISES on pages 737 to 745: 13-1 to 13-19, submit and be
READINGS
prepared to discuss in class.
DATE
WEEK 15
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Final Project.
SPECIFIC
OBJECTIVES Final Presentation.
Final Exam..
• Explain the various limitations and considerations in financial
statement analysis.
• Illustrate how to analyze comparative financial statements of a
company over a specific period of time.
• Describe how to complete vertical analysis using common size
financial statements.
• Explain how to compute and use various ratios to assess liquidity.
• Discuss the use of alternative accounting principles and the effects of
inflation as two factors that must be considered when analyzing
financial statements.
• Explain acid test or quick ratio as a stricter test of liquidity than the
current ratio, excludes inventory and prepayments from the numerator.
• Define cash flow from operations to current liabilities ratio as a
measure of the ability to pay current debts form operating flows.
• Define accounts receivable turnover ratio as a measure of the number
of times accounts receivable are collected in a period.
• Explain the number of days’ sales in receivables as a measure of the
average age of accounts receivable.
• Discuss what types of problems does inflation cause when financial
statements are analyzed.
TOPIC (S)
• Describe how to compute and use various ratios to assess solvency.
• Illustrate how to compute and use various ratios to assess profitability.
• Explain how to report on and analyze other income statement items.
• Define liquidity as the nearness of cash of the assets and liabilities.
• Explain working capital as current assets minus current liabilities.
• Describe the operating cycle for a manufacturing company.
• List and explain the order in which current assets are presented in the
balance sheet.
• Compare and contrast how the operating cycle for a manufacturer
differs from the operating cycle for a service company.
• Discuss the difference between liquidity analysis and solvency
analysis.
• Explain why is the debt service coverage ratio a better measure of
solvency rather than the times interest earned ratio.
LEARNING Group discussion: QUESTIONS on page A-13 1, 1 and 2
ACTIVITIES Completion of exercises and problems.
Student presentations.
HOMEWORK Read appendix A
& ASSIGNED Complete EXERCISES on page A-14 to A-15: answer A-1 TO A-5.
Prepare a 500-word analysis on a topic that you feel has helped you make an
READINGS
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impact on decision-making from this course.
Instructional Methods
In developing methodological strategies, it is best to discuss them between teachers and students
in an environment of freedom and mutual agreement in order to ensure that the students make
them their own and take responsibility for their execution and for attaining the goals of this
course.
The following strategies may be used in this class:
1. A review of the literature.
2. Check of the reading.
3. Analysis of assigned readings.
4. Group discussions.
5. Individual and group discussions.
6. Preparation of reports.
7. Preparation of a didactic plan.
8. Carrying out a micro-class.
Instructional Materials and References
Financial Accounting
Authors: Robert Libby, Patricia Libby, and Daniel Short
Publisher: McGraw-Hill; 7th edition (September 3, 2010)
ISBN-13: 978-0078111020 | ISBN-10: 0078111021
Managerial Accounting
Authors: Ray Garrison, Eric Noreen, and Peter Brewer
Publisher: McGraw-Hill/Irwin; 14th edition (January 5, 2011)
ISBN-13: 978-0078111006 | ISBN-10: 0078111005
Financial Accounting
Authors: Walter T. Harrison Jr., Charles T. Horngren, and C. William Thomas
Publisher: Pearson Education; 10th Edition (January 16, 2014)
ISBN-13: 978-0133427530 | sweetie ISBN-10: 0133427536
Assessment Criteria and Methods of Evaluating Students
96 – 100%
90 – 95%
87 – 89%
83 – 86%
80 – 82%
77 – 79%
A
 A B+
B
 B C+
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73 – 76%
70 – 72%
67 – 69%
63 – 66%
60 – 62 %
< 59%
C
 C D+
D
 DF
Do not count on a curve!
Generally, the grades “A” and “B” are considered passing grades. Grades "W" and "I" indicate that no
grades were earned for the course. A "W" grade indicates that the student withdrew from the course. An
"I" grade indicates that the student was passing the course, but failed to complete all the required course
work. The instructor, in his/her discretion may grant an "I" grade instead of an "F", pending completion of
the course work by the student within a specified time arranged by the instructor and told to the student. It
is the student's responsibility to follow-up with the instructor to complete the course work. If the course
work is not completed by the arranged time, the “I” grade becomes an “F".
Distribution of Grade Elements
Homework:
Exams I, II, III:
Final Presentation:
Final Research Project:
Total:
15%
30%
30%
25%
100 %
Date Syllabus Was Last Reviewed: July 2015
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STUDENT AGREEMENT
Print Student’s Name: _______________________________________
Date: ______________
Course Number and Prefix: _______________
Instructor: _____________________
Semester: _____________________________
Contact Information:
Telephone Number: _______________________________
Cell Number: _____________
Student’s E-mail: __________________________________
I ___________________________ have received a copy of the syllabus
for the above course. I understand and agree to abide by the terms of this
syllabus. I also acknowledge receipt of the syllabus supplementary
information.
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