Financial Accounting

• Accounting Today
• Ethics in Accounting
• The Basic Accounting Equation

• Explain the purpose and importance of accounting.
• Identify users and uses of, and opportunities in accounting.
• Explain why ethics are crucial to accounting.
• Explain generally accepted accounting principles and define and apply several accounting principles.
• Define and interpret the accounting equation and each of its components.
• Analyze business transactions using the accounting equation.
• Identify basic financial statements and explain how they interrelate.

• Recording Debits and Credits
• General Ledger and Chart of Accounts
• The Trial Balance
• Preparing Financial Statements

• Explain the steps in processing transactions and the role of source documents.
• Describe an account and its use in recording transactions.
• Describe a ledger and a chart of accounts.
• Define debits and credits and explain double-entry accounting.
• Analyze the impact of transactions on accounts and financial statements.
• Compute the debt ratio and describe its use in analyzing financial condition.
• Record transactions in a journal and post entries to a ledger.
• Prepare and explain the use of a trial balance.
• Prepare financial statements from business transactions.

• Accounting Adjustments
• The Accounting Cycle
• Types of Financial Statements
• The Balance Sheet
• The Income Statement
• The Statement of Cash Flows and the Statement of Changes in Owners Equity

• Explain the importance of periodic reporting and the time period assumption.
• Explain accrual accounting and how it improves financial statements.
• Identify steps in the accounting cycle.
• Explain and prepare a classified balance sheet.
• Explain how accounting adjustments link to financial statements.
• Compute profit margin and describe its use in analyzing company performance.
• Compute the current ratio and describe what it reveals about a companys financial condition.
• Prepare and explain adjusting entries.
• Explain and prepare an adjusted trial balance.
• Prepare financial statements from an adjusted trial balance.
• Describe and prepare closing
• entries.
• Explain and prepare a post-closing trial balance.

• Merchandising Costs
• Inventory
• Reporting Sales
• Profitability

• Describe merchandising activities and identify income components for a merchandising company.
• Identify and explain the inventory asset and cost flows of a merchandising company.
• Compute the acid-test ratio and explain its use to assess liquidity.
• Compute the gross margin ratio and explain its use to assess profitability.
• Analyze and record transactions for merchandise purchases using a perpetual system.
• Analyze and record transactions for merchandise sales using a perpetual system.
• Prepare adjustments and close accounts for a merchandising company.
• Define and prepare multiple-step and single-step income statements.

• Costing Methods and Company Benefits
• Reporting Inventory and Cost of Goods Sold
• Periodic and Perpetual Inventory Systems

• Identify the items making up merchandise inventory.
• Identify the costs of merchandise inventory.
• Analyze the effects of inventory methods for both financial and tax reporting.
• Analyze the effects of inventory errors on current and future financial statements.
• Assess inventory management using both inventory turnover and days sales in inventory.
• Compute inventory in a perpetual system using the methods of specific identification, FI FO, LIFO, and weighted average.
• Compute the lower of cost or market amount of inventory.

• Internal Controls
• Cash and Cash Equivalents
• Bank Reconciliation

• Define internal control and identify its purpose and principles.
• Define cash and cash equivalents and explain how to report them.
• Compute the days sales uncollected ratio and use it to assess liquidity.
• Apply internal control to cash receipts and disbursements.
• Explain and record petty cash fund transactions.
• Prepare a bank reconciliation.

• Accounting for Receivables
• Notes Receivable

• Describe accounts receivable and how they occur and are recorded.
• Describe a note receivable, the computation of its maturity date, and recording of its existence.
• Explain how receivables can be converted cash.
• Compute accounts receivable turnover to help assess financial condition.
• Apply the direct write-off method of accounts receivable.
• Apply the allowance method and estimate uncollectibles based on sales and accounts receivable.
• Record the honoring and dishonoring of a note and adjustments for interest.

• Tangible Assets
• Intangible Assets
• Natural Resources

• Understand the term plant asset.
• Compute depreciation expense under the various methods and understand its impact on the financial statements.
• Compare and contrast revenue and capital expenditures.
• Determine the cost of an intangible asset and test for impairment when necessary.
• Calculate and record the cost of natural resources.

• Current Liabilities
• Describe current and long-term liabilities and their characteristics.

• Identify and describe known current liabilities.
• Compute the times interest earned ratio and use it to analyze liabilities.
• Prepare entries to account for short-term notes payable.
• Compute and record employee payroll deductions and liabilities.
• Compute and record employer payroll expenses and liabilities.
• Account for estimated liabilities, including warranties and bonuses.

• Accounting for Long-Term Liabilities
• Stock and Bond Financing
• Equity Reporting

• Explain the types and payment
• patterns of notes.
• Compare bond financing with stock financing.
• Assess debt features and their implications.
• Compute the debt-to-equity ratio and explain its use.

• Corporations
• Dividends
• Retained Earnings
• Earnings Per Share Management
• Stock transactions
• Treasury Stock

• Identify characteristics of corporations and their organization.
• Explain characteristics of Dividends
• Explain the items reported in retained earnings.
• Record the issuance of corporate stock.
• Record transactions involving cash dividends, stock dividends, and stock splits.
• Record purchases and sales of
• treasury stock and the retirement of stock.

• Cash Flow Statement Analysis
• Operating and Financing Activities

• Distinguish between operating, investing, and financing activities.
• Describe how noncash investing and financing activities are disclosed.
• Analyze the statement of cash flows.
• Prepare a statement of cash flows.
• Compute cash flows from operating activities using the indirect method.
• Determine cash flows from both investing and financing activities.

• Ratio Analysis
• Horizontal and Vertical Analysis

• Explain the purpose and identify the building blocks of analysis.
• Describe standards for comparisons in analysis.
• Summarize and report results of analysis.
• Explain and apply methods of horizontal analysis.
• Describe and apply methods of vertical analysis.
• Define and apply ratio analysis.

• Review

• Review

Topic

Assessment

Points Available

4

Graded Exam #1

125

7

Graded Exam #2

125

Cumulative Graded Midterm Exam

200

10

Graded Exam #3

125

14

Graded Exam #4

125

Cumulative Graded Final Exam

300

Total

1000