This course explains the objective of financial accounting including the theoretical foundation for standards. The role of the FASB in defining accounting elements and setting standards in the United States is covered. The basic steps in the accounting cycle are explained and identified. The income statement is defined as well as specific components and format is explained. The balance sheet and notes to the financial statements are described in depth. The importance of a statement of cash flows and its significance as a companion to the income statement is presented.
Students will Learn:
- The purpose of financial reporting and how to identify the primary financial statement.
- To identify and complete the basic steps in the accounting cycle.
- How to prepare the balance sheet, income statement, and statement of cash flows.
Module 1 – Introduction, Accounting Standards, and Conceptual Framework
Introduction & Accounting Standards
- Learning Objective: Develop core financial knowledge, identify the role of organizations in financial reporting, define the accounting cycle and financial statements, identify and describe balance sheets, income statements, statements of Stockholders’ equity and statement of cash flows, and define the Financial Accounting Standards Board (FASB).
- Learning Objective: Develop theoretical foundation of accounting, identify a guide for analyzing and resolving emerging issues, define the elements of financial statements, and discuss the FASB accounting standards codification.
Module 2 – The Accounting Cycle
- Learning Objective: Define the aspects of the accounting cycle including recording and reporting phases, define the three-step journal entry process including identifying the accounts involved with an event/transaction, determining whether each account increased or decreased, and determining the account by which each account was affected, and demonstrate posting to the ledger accounts.
Accounting Cycle (continued)
- Learning Objective: Prepare financial statements by identifying all revenues and expenses, computing the net income, computing the ending retained earnings balance, and preparing a balance sheet, analyze the closing process in both Nominal (temporary) and Real (permanent) accounts, and explain accrual and cash-basis accounting.
Module 3 – The Balance Sheet
The Balance Sheet
- Learning Objective: Define the elements of the balance sheet including assets, liabilities, and owner’s equity, identify noncurrent and contingent liabilities, describe owner’s equity as it relates to contributed capital, retained earnings, and treasury stock, and identify other elements of the balance sheet such as the format, accumulated other comprehensive income, and offsets on the balance sheet.
The Balance Sheet (continued)
- Learning Objective: Define the elements of the balance sheet including formats, notes, and subsequent events, prepare a financial analysis of a company’s performance and financial position, and identify balance sheet limitations and relationships.
Module 4 – The Income Statement
The Income Statement
- Learning Objective: Identify the concept of income, demonstrate the importance of an income statement, explain income measurement including a transaction approach, and identify the single step and multiple step formats of an income statement.
The Income Statement (continued)
- Learning Objective: Identify the specific components of an income statement including continuing and discontinued operations, extraordinary items, changes in accounting principles and estimates, earnings per share, price earnings ratio, comprehensive income, and proposed income statement.
Module 5 – Statement of Cash Flows
Statement of Cash Flows
- Learning Objective: Explain the purpose of cash flow statements, identify cash and cash equivalents, define three categories of cash flow, and analyze and compare the direct and indirect methods of operating activities.
Statement of Cash Flows (continued)
- Learning Objective: Analyze investing and financing activities, prepare a complete cash flow statement, identify supplemental disclosure, analyze financial strength from relationships among cash flows from operating, investing, and financing activities, compute financial ratios based on cash flow data, and identify a forecasted statement of cash flows.
- Business undergraduates or MBA students with an accounting or finance focus.