ACC Financial Accounting and Reporting SABANCI SCHOOL

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ACC Financial Accounting and Reporting SABANCI SCHOOL Powered By Docstoc
					          ACC201 –Introduction to Financial Accounting and Reporting
                                 Spring 2011
Instructor:     Aylin Suna Özkaya
Office:         FMAN 1019
Phone:          +905323842584
Web site:      Sucourse

Office Hours: TBC or by appointment.

Course Objective:
The primary objective of the course is to help students understand the financial information
presented in financial statements, as preparers and as users who make decisions based on that
information. The course is also intended to teach the students basic business terminology that
they will encounter in future management courses and in the business world. A final objective of
the course is to help prepare students to succeed in their future professional lives. To be
successful in the current business environment, the students need to possess not only technical
skills in basic management fields, but also (1) strong oral and written communication skills, (2)
listening skills, (3) critical thinking skills, (4) analytical skills, (5) effective time management
skills, and (6) ethical awareness and professionalism. Consequently, the format of the course and
the assignments are structured to help students develop and use these skills.

Course Description and Contents:
Accounting is an ever-evolving information system that measures business activity, processes the
information into financial reports and communicates the results to various decision makers in
society. As such, it serves a number of purposes. First, accounting systems produce information that
will assist management in making day-to-day operational and long-term strategic decisions. Second,
it is used to generate information for use in filing tax returns. Third, it is a system of external
reporting that is used in decision-making by creditors, shareholders, prospective investors,
regulators and others who do not have direct access to companies' financial records.

        The course starts by providing a comprehensive introduction to fundamental accounting
concepts and principles underlying the preparation and use of financial statements, with an
emphasis on how financial information is used in resource allocation decisions by users internal and
external to the firm. Next, the following topics are covered in sequence: the recording cycle (how
business transactions are analyzed, recorded, stored, summarized and their results communicated to
users in the form of financial statements, under accrual basis of accounting); the content and the
format of the four basic financial statements (balance sheet, income statement, statement of changes
in owner’s equity, and cash-flow statement); determination of inventory costs and cost of the goods
sold in merchandising firms; financial assets; plant assets and their depreciation; liabilities vs.
owner’s equity (if time permits); and analysis of financial statements through basic financial ratio

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    Learning Outcomes:

    Upon successful completion of the course, the student should be able to:
    1. Explain how accounting information is used in resource allocation decisions by users internal
    and external to the firm,
    2. Describe the basic assumptions, concepts and principles of financial accounting,
    3. Analyze business transactions in terms of their effect on the financial statements and be able to
    record them in company books.
    4. Distinguish cash flows (cash basis) from income measurement (accrual basis),
    5. Prepare and read a set of simple financial statements and classify their components for a more
    meaningful interpretation of the statements,
    6. Broadly assess the financial position, profitability and cash flows of a firm through simple ratio
    7. Understand and use basic accounting/financial terminology.

    Course Material:

·   Textbook:
       Horngren, Harrison, Oliver. 2009. Accounting, Pearson/PrenticeHall, 8thedition. Ch.1-14 , with
         MyAccountingLab website access code. You are encouraged to heavily use
         MyAccountingLab, which is a homework and quiz management tool that will help you in
         solving problems and help you learn

· SuCourse: The course syllabus, assignments, summary lecture notes (handouts) , recommended
   exercises and some of their solutions, and some other sources that discuss current global and ethical
   issues in accounting, are included in the SuCourse. Sabanci University uses a very powerful web-
   based tool called Turnitin embedded in the SuCourse. Turnitin is the worldwide standard in
   online plagiarism prevention. It allows instructors to compare student papers against a database
   composed of millions of articles, reports, and homeworks handed in through SuCourse. Every
   paper you submit will be scanned by Turnitin, and results will be reflected in your grades.

·   Instructional Design and Expectations:

            A variety of learning approaches will be used in this course. The class sessions will usually
    consist of a mixture of lectures and class discussions where the students are expected to take part in
    the class discourse. Some problems and articles from popular financial media will be solved and
    discussed in class. Some real-life financial statements will be examined. Also some short cases,
    prepared in groups, will be presented in class and submitted as group homework.

            Many students find their first accounting course difficult. This is not so much related to any
    inherent difficulty of the course content, but to the self-discipline necessary to master the course
    content. The content is very cumulative. That is, if a student fails to learn any part of material
    covered in the first 5 chapters, this will insure failure to learn nearly all subsequent material. Also
    the students are expected to understand the logic behind the accounting rules rather than
    memorizing these rules. As a result, the students are expected to attend and be prepared for each
    class and keep up-to-date with the material. It is important that you study regularly and do not fall
    behind. I would suggest studying the material for each class in the following manner:

    1. Read the assigned text pages.
    2. Try some of the assigned problems from the text.
    3. Attend the class where I will motivate and explain the assigned material,
   go over a few selected problems, and answer your questions.
4. Review what was covered in class and solve your homework assignments and additional
problems from your textbook and prepare your questions for the next meeting.


Your course grade will be determined by:
       A midterm exam (30%),
       A final exam (35%),
       Individual homework assignments and quizzes (15 %),
       Short cases/project (10 %),
       Attendance and class participation (10 %).


Exams are designed to allow students to demonstrate their understanding of the material covered.
They will cover the material contained in the textbook, assignments, cases, lectures and class
discussions and will generally include both conceptual and problem type multiple choice questions
and a few problems. In this course, the best way to study for exams is to spend time every week to
read the related text pages and lecture notes to get prepared before class, attend the class and ask
your questions, and review the material covered and do the recommended and homework problems
after the class. There will be no make-ups given for the midterm exam. Its content and weight will
be shifted to the final exam, that is, you will take a separate make-up exam on the final exam day or
week. Please note that the make-up exams are always harder.

Homework assignments will be collected and graded individually. They are crucial for the
mastery of the subject matter. You will continue using Excel spreadsheets and/or Word that you
were exposed to in MGMT 201 in solving the homework problems and cases. You may also use
the GL software in your student resource CD. You will be submitting your homework
assignments through the SuCourse.

Class participation and attendance is very important at SU. It is especially relevant for this course
as the content is cumulative and class discussions and hands-on exercises will make it much easier
for you to master the material. The students are encouraged and expected to participate in the
classroom discussion by asking relevant questions, presenting answers to the questions raised and
bringing examples of related current events they read in the financial media. Attendance will be
taken during lectures and recitations, whenever the instructor wants.

Cases will be prepared and discussed in class and presented by the teams. Your answers to the
cases must be written in a concise and professional manner and edited by the group members.
Organize your ideas carefully and logically. Your grade will be based on not only how correctly
you address and answer the questions, but also on the clarity and organization of the written
answer. You will be grading your teammates for the group work you did together. The goal is to
have all students carry out their fair share in the group assignments and this is possible only if you
grade your teammates truthfully and fairly.
 Peer Evaluation in Teamwork:
Students will be asked to provide an evaluation of their team members in group cases. Each
student will divide 100 points between the members of his/her team, including herself/himself
and submit the grades to an appropriate location in SuCourse. This division should reflect the
students’ judgment of the contribution of each member of the team. The scores should not be
merely a functions of time spent by each member, but they should be measures of their relative
contribution to the idea generation, research, analysis, writing, oral presentation, report writing,
etc. If the team was highly functional, and each member did what they committed themselves to,
then the student can assign the same mark to each member of the team. If, on the other hand,
some members of the team did not fulfill their commitments and did not contribute as much as
the others, then points should be distributed unevenly. Hence it is possible to have downward (or
upward) adjustments of grades in case of students who have done less (more) than what the
group expected of them. The peer evaluations submitted by the members of the team will not be
disclosed and only the instructor(s) will see them, but they will have a direct impact on your case
discussion grades.
         In case there is no consensus among the team members, for example, if three students
divide the marks evenly and the fourth one divides them unevenly, then the instructor will use
his/her judgment to assign peer evaluation marks--possibly after meeting with members of the
team. The primary goal of this exercise is to avoid giving undeserved credit to individuals who
did not help their teams.

Academic Honesty:

Students are considered to be adults who mean taking responsibility for your actions and decisions,
and accepting the consequences of those actions/decisions. Students are expected to shoulder the
responsibility for learning the material. Otherwise, they are wasting their time as well as other
students' and the professor's. Please keep in mind that learning a topic requires time, effort, and
        Learning is enhanced through cooperation and as such you are encouraged to work in
groups, ask for and give help freely in all appropriate settings. At the same time, as a matter of
personal integrity, you should only represent your own work as yours. Any work that is
submitted to be evaluated in this class should be an original piece of writing, presenting your
ideas in your own words. Everything you borrow from books, articles, or web sites (including
those in the syllabus) should be properly cited. Although you are encouraged to discuss your
ideas with others (including your friends in the class), it is important that you do not share your
writing (slides, MS Excel files, reports, etc.) with anyone. Using ideas, text and other intellectual
property developed by someone else while claiming it is your original work is plagiarism.
Copying from others or providing answers or information, written or oral, to others is cheating.
Unauthorized help from another person or having someone else write one’s paper or assignment
is collusion. Cheating, plagiarism and collusion are serious offenses that could result in an F
grade and disciplinary action. Please pay utmost attention to avoid such accusations.

Course Schedule

                                                                         Recommended exercises,
        Topic                        Reading                             problems& other course
Accounting and the                   Chapter 1                           E1-18, E120, E1-24
Business Environment-                                                    P1-33A, P136A
The Balance sheet(B/S) , Income
statement (I/S), Owner’s equity
statement and Cash Flow
Transactions                         Chapter 2                           S2-6, S2-12, E2-16
                                                                         P2-27A,P2-32A, P2-47B
The Adjusting Process                Chapter 3                           S3-10, E3-14, E3-15, E3-21
                                     (Appendix excluded)                 P3-32A, P3-38B
                                                                         HBS case:Chemalite A
Completing the Accounting Chapter 4                                      S4-11, E4-17, E4-18, E4-22
Cycle - Classified B/S and (Appendix excluded)                           P4-26A, P4-33B
introduce ratios
Merchandising Operations-  Chapter 5                                     E5-15, E5-19, E5-22,
Multiple step I/S                                                        P5-29A, P5-33A,P5-41B
                           Midterm Exam
Merchandise Inventory      Chapter 6                                     S6-9, E6-21,E6-15, E6-26,
                                                                         P6-34A, P6-39B, P6-41B
Receivables (A/R and N/R)            Chapter 8 *                         S8-3, S8-6, S8-12, E8-19,
and revenue recognition              (Appendix excluded)                 E8-23, P8-32A
                                                                         HBS Case: Bausch and Lomb
Plant assets and depreciation Chapter 9 *                                S9-4, S9-8, E9-15, E9-19,
                                     (Natural resources &                P9-34B, P9-35B
                                     intangibles excluded)               HBS Case:Delta vs Pan Am

Debt vs. Equity                      Chapter 10 *                        S10-1, S10-11, E10-31
Current and Long-Term                (Appendices excluded)               E10-33
Liabilities                          (warranties, contingent
                                     liabilities, payroll, bonds
                                     issued at premium or discount
Corporations: Paid-in                Chapter 11*                         S11-6, S11-8, S11-11, E11-
Capital, Retained Earnings                                               18, E11-25, P11-28A&34-A
and cash Dividends
Cash Flow Statement                  Chapter 13                          E13-12,E13-17, P13-
Financial Statement                  Chapter 14                          E14-12, E14-13, S14-15,
Analysis                                                                 E14- 18,19&20, P14-23A,
                                     Final Exam

* These chapters will be covered only partially; S = Short Exercise; E= Exercise; P = Problems


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