Class Syllabus

Part I: Basic Accounting Concepts Internal Decision Making and External Financial Reporting

1. Introduction

• Function and objectives of accounting
• Management accounting
• Financial reporting: principal statements

2. The balance sheet

• Accounting equation and transactions analysis
• Use of accounts
• Debit and credit notation
• The accounting cycle

3. The income statement

• Cash basis of accounting
• Accrual basis of accounting
• Revenue and expense adjustments
• Preparation of the income statement and balance sheet

4. Receivables and Revenue Recognition

• Principles of income recognition
• Accounts receivable and bad debts

5. Inventories

• Manufacturing cost flows
• Perpetual and periodic inventory systems
• Inventory valuation methods
• Implications of choice of method: income and tax effects
• Current cost disclosure

6. Long term assets: depreciation and depletion

• Methods of computing depreciation
• Tax effects
• Dispositions
• Natural resource assets and intangible assets

7. Liabilities

• Liability recognition
• Contingencies
• Current liabilities

8. The time value of money

• Present and future value concepts
• Mortgages and amortization schedules
• Net present value and internal rate of return

9. Financial instruments: bonds

handout chapter 9, pp. 487-511

• Valuation models for bonds
• The corporate and government bond markets
• Yields and prices
• Accounting for bonds

10. Owners� equity

• Reporting earnings
• Capital stock and retained earnings
• Dividend policy

• Significance of cash flow Accounting income vs. cash flow