ABF1002 Semester 2, 2000
GRIFFITH UNIVERSITY FACULTY OF COMMERCE AND MANAGEMENT SCHOOL OF ACCOUNTING, BANKING AND FINANCE SUBJECT OUTLINE – SEMESTER 2, 2000
SUBJECT CODE:
ABF1002
SUBJECT TITLE:
Business Accounting Principles
SUBJECT CONVENOR:
Pak Auyeung Rm. 0.49 BUN Ph. 3875 7448 Jenny Waters
OTHER MEMBERS OF TEACHING TEAM:
BRIEF DESCRIPTION OF SUBJECT: This subject introduces students to the main concepts and techniques of accounting. The emphasis is on the basic principles of financial accounting. An introductory coverage of the use of financial information in managerial decision-making is also included.
OBJECTIVES OF SUBJECT: The objectives of this subject are to: a) provide a foundation for understanding the theory and principles of accounting; and b) develop the ability to search for and find, interpret and evaluate information as part of the accounting problem-solving process.
CONTENT: The content is in three main sections: 1) a consideration of the basic principles used to interpret and portray financial events; 2) measurement issues in accounting; and 3) uses of accounting information in decision-making contexts. A general outline of the content of these sections follows. Basic Principles Concepts - accounting equation, transaction analysis, overview of financial statements. Accounting Cycle - basic accounting conventions, overview of journals and ledgers, adjusting entries, preparation of financial statements, merchandising versus retailing environments. Measurement Issues
2 ABF1002 Semester 2, 2000
Short-term Measurement - Inventory measurement, cost flow assumptions. Long-term Asset Measurement - valuation, depreciation. Accounting Information and Decision-making Financial Statement Analysis - trend and ratio analysis. Management control - operating budgets. Short-term management planning - cost concepts, cost-volume-profit analysis.
ORGANISATION OF SUBJECT: Hrs/Wk 2 1 Class Type Lectures Tutorial
There will be three compulsory contact hours per week, consisting of two hours of lectures and a one hour tutorial. Students will be expected to prepare answers to tutorial questions prior to attendance. Students are required to attend 75% of tutorials or to demonstrate by sitting a pass/fail examination that they have covered the material dealt with in the tutorials. Records will be kept of tutorial attendance. This is a compulsory subject in the First Year of the Bachelor of International Business degree course. It introduces students to the basic principles underlying the production of financial information and its use in decision-making. These principles are applicable to a wide variety of governmental, voluntary, and business enterprises. The subject considers how the complex array of financial events that an enterprise experiences can be systematically interpreted and processed to produce useful financial information. It will be relevant to any student requiring an understanding of the financial environment of an enterprise. This subject is also a pre-requisite for a subject in international accounting taken in the second year of the course.
ASSESSMENT: Item Mid-Semester Exam Final Exam Length 1 ½ hrs 3 hrs %Weighting Due date 35% 65% Week 7 Week 14-16
The mid-semester exam will cover material from the first main section of the course. The final exam will be a review of all subject material. ASSESSMENT RATIONALE/CRITERIA It is necessary for students to be able to recall and apply the basic concepts of accounting and their inter-relationships which the subject focuses on without reference to resource
3 ABF1002 Semester 2, 2000
materials. This is necessary to demonstrate that the basic knowledge of accounting which the subject aims to impart can be applied in real settings. If students had to refer to resource materials in order to check basic concepts when considering financial information in various decision making settings, this would demonstrate that they have no workable knowledge of accounting. Examination assessment under controlled conditions is necessary to test this requirement of the subject. The mid-semester exam will provide an early assessment of the main conceptual basics of the subject. It will assess both recall ability on basic principles, and application of these in structured problem solving. In addition it will provide early feedback to students on their progress. The final exam will assess mainly the ability of students to apply the concepts they have learnt to typical problem situations. This involves both an assessment of mastery of techniques and the ability to critically evaluate the accounting process.
PRESCRIBED TEXT: Carnegie, G., Jones, S., Norris, G., Wigg, R. and B. Williams, Accounting: Financial and Organisational Decision Making, 1st ed., McGraw-Hill, Sydney, 1999. RECOMMENDED READING: A number of introductory textbooks held in the library collection may be useful. include:
Examples
Hoggett, J. and L.Edwards, Accounting in Australia, 4th ed., John Wiley & Sons, Brisbane, 2000. Horngren, C.T., Harrison, W.T., Best, P.J., Fraser, D.J. and H.Y. Izan, Financial Accounting, 2nd ed., Prentice Hall, Sydney, 1997. Kloot, L.S. and E.K. Sandercock, Accounting: The Basis for Business Decisions, 2 McGraw-Hill, Sydney, 1995.
nd
ed.,
Peirson, G. and A. Ramsay, Accounting: An Introduction, 2nd ed., Longman, Melbourne, 1998. Justice, Ipp and W.S. Weerasooria, (Eds), Business and Law Dictionary, Butterworths, Sydney, 1997.
4 ABF1002 Semester 2, 2000
Week No 1
2
Lecture Topic Introduction to Accounting - Social and Institutional Context of Accounting - Primary financial statements - Uses of accounting information Reading: Ch. 1 & 2 Classification and Analysis of Business Transactions - Accounting equation - Relationship between financial statements Reading: Ch. 3 Recording of Business Transactions - Double entry accounting - Accounting systems - Preparation of financial statements Reading: Ch. 4 Assumptions of Historical Cost Accounting Broad principles of historical cost Assumptions Reading: Ch. 6 End of Period Adjustments - Adjusting entries - The worksheet Reading: Ch. 7 pp 195-217 Merchandise Transactions and Accounting for Inventories - Inventory systems - Cost allocation methods - The lower of cost and market rule Reading: Ch. 5 & Ch. 15 pp 546-551 Mid-Semester Exam, 12 September 2000
Tutorial Questions
3
Tutorial Questions: 1.3, 1.27, 1.38(2), 2.9, 2.12 Additional Questions: 1.5, 1.25, 1.35, 2.1, 2.13 Tutorial Questions: 3.1, 3.2, 3.13(1), 3.16 Additional Questions: 3.5, 3.11, 3.12, 3.21(1) Tutorial Questions: 4.3, 4.12, 4.13(2) Additional Questions: 4.4, 4.17, 4.19, 4.21 Tutorial Questions: 6.7, 6.16, 6.17, 6.20
4
5
6
Tutorial Questions: 7.2, 7.17(2), 7.21(3) Additional Questions: 7.1, 7.8, 7.9, 7.16
7 Topics from Wks. 1-5 Tutorial Questions: 5.2, 5.17, 15.12(3) Additional Questions: 5.9, 5.15, 15.1
8
Measurement of Non Current Assets - Depreciation - Revaluation - Disposal Reading: Ch. 7 pp 209-217; Ch. 15 pp 552-562. Financial Statement Analysis - Financial ratios - Limitations of Analysis Reading: Ch. 12 Budgeting - Operational budgets - Budgeted financial statements Reading: Ch. 25 pp 854-871, 877-881 Cost-volume-profit relationships - Cost behaviour - Break-even analysis - CVP analysis for profit planning Reading: Ch. 25 pp 871-875 Cost Analysis for Decision Making - Cost concepts - Decision making contexts Reading: Ch. 23 Revision
9
Tutorial Questions:
7.23(1), 7.27 Additional Questions: 7.23(2), 7.25
Tutorial Questions:
10
12.17, 12.18, 12.20 Additional Questions: 12.23
Tutorial Questions:
11
25.1, 25.9, 25.19 Additional Questions: 25.23
Tutorial Questions: 25.5, 25.6, 25.18 Additional Questions: 25.20 Tutorial Questions: 23.2, 23.7, 23.10, 23.15, 23.17 Additional Questions: 23.16, 23.22
12
13