INSTITUTE of BUSINESS MANAGEMENT

Department of Accounting &Finance

Introduction to Financial Accounting – ACC101

Faculty:

1. Overall aims of course

This is an introductory and mandatory financial accounting course which will introduce and enable students to
understand the accounting process leading to the preparation and presentation of financial statements in
accordance with Generally Accepted Accounting Principles

Practice Sessions are mandatory for students to take every week where students will practice the
concepts learned during classroom sessions.

A heavy reliance will be placed on problem solving and practical analyses to achieve application of techniques
necessary to apprehend accounting information. The basic tools and skills that students will learn in this course
will help them throughout their professional career and also facilitate them to proceed with Introduction to
Financial Accounting II wherein they would learn accounting techniques for a partnership firm and a
corporation.

This basic course of Financial Accounting will enable the students to completely analyze the accounting cycle
which will lead to the presentation and preparation of financial statements of a Sole Proprietorship firm.
Furthermore it would enlighten the students to understand in detail, the accounting for all currents and fixed
assets (tangible and intangible).

2. Intended learning outcomes of course (ILOs)

a. Knowledge and understanding:

Students should be able to:

 Understand basic accounting principles

 Know the five basic accounts
 Process the accounting information.
 Know the steps of accounting cycle from journalizing to preparation of financial statements for a sole
proprietorship.
 Know the journalizing process
 Make adjusting entries, closing entries and post-closing trial balance
 Complete the worksheet construction and accounting Cycle
 Accounting and Reporting for Merchandising Operations
 Know proper accounting for other current assets such as receivables and inventory

b. Intellectual skills

 Effective qualitative problem solving and decision making skills.

 The ability to create, evaluate and access a range of options, together with the capacity to apply ideas
and knowledge to a range of business (a sole proprietorship).
 The ability to apply given tools/methods accurately and carefully to a well-defined problem.
c. Professional and practical skills through experiential learning

After completion of the course the students should be able to:

 Application of skills: can operate in predictable, defined contexts that require use of a specified range
of standard techniques
 To apply accounting methods and techniques to complete accounting cycle of a sole proprietorship
whether a service entity or a merchandising concern.
 To apply techniques of inventory valuation, bank reconciliation, bad debts, depreciation.

 Autonomy in skill use: to act with limited autonomy, under direction or supervision, within defined
guidelines

d. General and transferable skills

 Group working: can work effectively with others as a member of a group and meet obligations to
others (for example, tutors, peers, and colleagues)
 Learning resources: can work within an appropriate ethos and can use and access a range of
learning resources
 Self-evaluation: can evaluate own strengths and weakness within criteria largely set by others.
 Management of information: can manage information, collect appropriate data from a range of
sources and undertake simple research tasks with external guidance
 Autonomy: can take responsibility for own learning with appropriate support
 Communications: can communicate effectively in a format appropriate to the discipline(s) and
report practical procedures in a clear and concise manner

Sessions Topics

Class and Course Introduction

1&2
Introduction to Accounting in a firm
 Accounting basic concepts
 Accounting-definition and characteristics
 Types or classification of accounting (different types of users).
 Forms of Business organization
 Assumptions & Principles in Accounting in some detail
 Limitations of Accounting Profession
 Determine the five basic accounts
Learning Outcomes
 Identifying the users and users of accounting information
 Learning the importance of financial accounting for external parties-in terms of
objectives and characteristics of information.
 Learning the importance of management accounting for internal parties-in terms of
objectives and characteristics of information
 Understanding various forms of business organization and their advantages &
disadvantages
 Understanding certain limitations of the Accounting Profession
 To be able to define assets, Liabilities, and Owner’s Equity

Pedagogy
1. Input session (students centered)
2. Lecture with discussion
3&4 Processing Accounting Information/ Accounting equation/ Basic financial statements
 Basic Accounting Equation
 Impact of transactions on accounting equation
 Errors ( their impacts) and Corrections
 Introduction to basic financial statements: Income statement, Balance sheet and
Statement of Owner’s Equity
 Statement Interrelationships

Learning outcomes
 Understand the accounting equation
 Identify four items that causes change to owner’s equity: investments withdrawals,
revenues and expenses
 Learning the impact of various transaction on the accounting equation
 Identification of various Accounting errors and their impacts ; followed by their
corrections
 Basic understanding of financial statements and their understanding their
interrelationships
Pedagogy
 Short recap of last session
 Student queries regarding last topic
 Lecture with discussion
 Practical application of discussion (problem solving) with student input.
 Review and evaluation
4567&8 General Journal/General Ledger and Trial Balance
 Definitions of transaction
 Analyzing how the basic accounts are affected by firm’s transaction
 Definition of credit and debit, considering their different names
 Recording entries in the general journal
 Introduction to Chart of Accounts
 Post entries to the general ledger
 Describe and prepare a trial balance

Learning Outcomes
 Understanding of different accounts
 Understand the concepts of debits and credits, journals and their relationships
 Learn the journalizing of entries
 Learn to post entries to the General Ledger by using proper chart of accounts
 Learn to construct a Trial Balance

Pedagogy
 Short recap of last session
 Student queries regarding last topic
 Lecture with discussion
 Practical application of discussion (problem solving) with student input.
 Review and evaluation

9 10 & 11 Income Measurement and Adjusting Entries

 The Adjusting process
 Recognition of items which require adjustment
 Prepare adjusting entries and show their impact on the financial statements
 Prepare an adjusted trial balance

Learning Outcomes
 Understand and application of revenue recognition and matching principle
 Understand items that need to be adjusted (Accruals, prepaid, depreciation etc.)
 Understand and implementation of the adjustment process and why it is required
 Learning how to prepare adjusting entries and understand their impact on financial
statements
 Learn to prepare an adjusted Trial Balance

Pedagogy
 Short recap of last session
 Student queries regarding last topic
 Lecture with discussion
 Practical application of discussion (problem solving) with student input.
 Review and evaluation
12 13 & 14 Closing Entries and Completion of Accounting Cycle
 Work sheet construction and uses of worksheets
 Closing entries
 Completion of Accounting cycle
 Format of Financial Statements: Income Statement and Balance Sheet

Learning Outcomes
 Identifying items that require closing
 Recording closing entries. Their use and different ways of journalizing and posting
 Learning worksheet construction and its uses
 Step by step understanding of the Accounting cycle upon its completion
 Income statement, Importance of income statement contents and format
 Statement of owners’ equity and its format
 Balance sheet and its contents, format, and classification (assets, liabilities and owners’
equity).

Pedagogy
 Short recap of last session
 Student queries regarding last topic
 Lecture with discussion
 Practical application of discussion (problem solving) with student input.
 Review and evaluation
15 & 16 Accounting/Reporting for Merchandising Operations
 Recording Purchase and Sale of Merchandise under the Perpetual & Periodic Inventory
Systems
 Discussing Sales & purchase discounts and returns : general journal entries
 Worksheet of a merchandising concern (Adjusting Entry Method and Closing Entry
Method)
 Financial Statements of a Merchandising concern

Learning outcomes
 Understanding the operating cycle and worksheet preparation of a merchandizing
company.
 Thorough application of Periodic vs. Perpetual Inventory system.
 Understanding the factors to be considered in selecting an inventory system.
 Implementation of Adjusting Entry method and Closing Entry Method for a
merchandising Concern
 Learning the Financial Statement preparation of a merchandizing firm

Pedagogy
 Short recap of last session
 Student queries regarding last topic
 Lecture with discussion
 Practical application of discussion (problem solving) with student input.
 Review and evaluation
17 Accounting for Merchandising Operations: Inventory Valuation
 Inventory Costing Methods under periodical and perpetual inventory system
 Estimation of Ending inventory valuation
 FIFO, LIFO and Weighted Average Methods

Learning Outcomes
 Understand LIFO, FIFO and Average methods and their applications in a
perpetual and a periodic inventory system

Pedagogy
 Short recap of last session
 Student queries regarding last topic
 Lecture with discussion
 Practical application of discussion (problem solving) with student input.
 Review and evaluation
18 Cash and Short term investments
 Bank reconciliation
Learning Outcomes
 Learning how to reconcile a bank statement
Pedagogy
 Short recap of last session
 Student queries regarding last topic
 Lecture with discussion
 Practical application of discussion (problem solving) with student input.
 Review and evaluation

19 & 20 Receivable: Account Receivable

 Direct write-off Method and Allowance Method (Income statement and Balance
sheet approach)
 Writing off Uncollectible Accounts
 Collection of an account previously written off
 Aging Schedule

Learning Outcomes
 Computing and understanding general journal entries for Account Receivable
under the direct write off method and allowance method

Pedagogy
 Short recap of last session
 Student queries regarding last topic
 Lecture with discussion
 Practical application of discussion (problem solving) with student input.
 Review and evaluation
21 22 & 23 Acquisition and Depreciation Process: Property, Plant and Equipment
 Acquisition of long term assets
 Depreciation of long-term assets
 Different depreciation methods: Straight Line Method, Units of Output Method
and Accelerated Depreciation methods
 Selection criteria of a depreciation method
 Sale, Disposal and Exchange (trade ins) of Property Plant and Equipment (gain
and loss situation)

Learning Outcomes
 Recording Acquisition of Property Plant and Equipment
 Learning different methods for depreciating long-term assets and the comparison
of these methods
 Learning general journal entries to record the sale, disposal and exchange of these
long term assets

Pedagogy
 Short recap of last session
 Student queries regarding last topic
 Lecture with discussion
 Practical application of discussion (problem solving) with student input.
 Review and evaluation
24 Depreciation Process: Natural Resources and Intangibles
 Acquisition and Depletion of natural resources
 Acquisition and Amortization of Intangibles
Learning Outcomes
 Understanding the concept of intangibles
 Identifying the different types of intangible assets

Pedagogy
 Short recap of last session
 Student queries regarding last topic
 Lecture with discussion

25 & 26 Midterm 1 and Midterm 2: Midterms are based on testing the understanding of students
of the accounting principles and their applications.
27 & 28 Final: Designed comprehensively to evaluate and judge the student understanding and
application of concepts taught throughout the semester

Rubrics Category Below Average Average Proficient

1 Collect and Not attempted or Source document Source document

verify source partially attempted identified and verified identified and verified
document but with errors correctly
2 Analyze each Not attempted or Transaction analyzed Transaction analyzed
transaction partially attempted but with errors correctly
3 Journalize each Not attempted or Transaction Transaction
transaction partially attempted journalized but with journalized correctly
errors
4 Post to the Not attempted or Transactions posted to Transactions posted to
ledger partially attempted the ledger but with the ledger correctly
errors
5 Prepare a trial Not attempted or Trial balance prepared Trial balance prepared
balance partially attempted but with errors correctly
6 Prepare a work Not attempted or Work sheet prepared Work sheet prepared
sheet partially attempted but with errors correctly
7 Prepare Not attempted or Financial statements Financial statements
financial partially attempted prepared but with prepared correctly
statements errors
8 Journalize and Not attempted or Closing entries Closing entries
post-closing partially attempted journalized and posted journalized and
entries but with errors posted correctly
9 Prepare a post- Not attempted or Post-closing trial Post-closing trial
closing trial partially attempted balance prepared but balance prepared
balance with errors correctly
10 Accounting cycle Not attempted or Accounting for Accounting for
for a partially attempted merchandising firm merchandising firm
merchandising applied but with errors applied correctly
firm and
computations
and general
journal entries
for inventories
11 Computations Not attempted or Computations and Computations and
and prepare partially attempted preparing entries for preparing entries for
entries for depreciation, depreciation,
depreciation depletion and depletion and
amortization with amortization
errors proficiently

Teaching and learning methods

Lecture method shall be the primary mode of teaching, Practice sessions, may be used to make concepts
clearer .When deemed necessary evaluation methodology shall include quizzes, assignments, mid-term and
final examinations.

Lectures: 30% and 70% respectively

Practical training:

Assessment methods Objectives to assess.. Week Weight age

1 Quizzes Knowledge and understanding 3, 4, 5 15%

2 Assignments Knowledge and understanding 7,8,9 10%

3 Excel Learning Practice and understanding 5%
Excel based Accounting cycle
Formation is compulsory to be
Covered during first 16 sessions
After each topic discussion of
The accounting cycle
4 1st Mid Term test Knowledge and understanding 6 15%

5 2nd Mid Term test Knowledge and understanding 11 15%

6 Final Examination Professional skills 16 40%
Total: 100%

Attribute Grade Grade Grade Grade Grade

A B C D F
Accounting Especially Clear and Accurate and Limited grasp Inaccurate use
Concepts & skillful competent but limited of accounting of
techniques identification use of use of concepts and accounting
60% and analysis of accounting accounting techniques concepts and
accounting concepts and Concepts and techniques
concepts and techniques techniques
techniques
Structure Particularly clear Consistent Paragraph Weak Lack of focus
20% ideas with focus and flow and paragraph
logical good transitions transitions are structure and
transitions adequate illogical
throughout transitions

Language Language Free of errors in Minor errors Fundamental Serious errors

20% especially mechanics. in mechanics. Mechanics in
Clear and Clear Sentences errors. Lack of Mechanics,
concise with and concise could be clarity and Lack of
flawless language more effective concision Clarity and
mechanics. concision.

Essential Reading:

 Textbook: Accounting Principles

Authors: Lanny M. Solomon
Edition: 4th Edition

Recommended Texts:
 Financial & Managerial Accounting
Authors: Meigs, Williams, Haka & Bettner
Edition: 13th Edition
Reference Material:
 Principles of Financial Accounting
Authors: Jerry J. Weygandt, Donald E. Kieso and Paul D. Kimmel
Edition: 6th Edition
 Important problems in Accounting
By Feroz Qamer & Ghulam Nasir
B.Com edition

Facilities required for teaching and learning:

 Classroom multimedia
 Classroom overhead projector
 Panoramic whiteboard across front class wall

 Room#:                 Extension:

E-Mail:
Approved by:

Head of Department Date: / /