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Financial Accounting: Course Outline

Financial accounting (or financial accountancy) is the field of accounting concerned with the summary, analysis and reporting of financial transactions pertaining to a business. This involves the preparation of financial statements available for public co

Course Outline

Accounting and its Role

  • History & development of accounting
  • Accounting defined (conventional & Islamic)
  • Why study accounting
  • Major fields of accounting
  • Accounting as a career
  • Question for class discussions 

Introduction to Financial Statements

  • Forms of business organization
  • Users & uses of financial statements
  • Business activities
  • Communicating information to users
  • Assumptions & principles in financial reporting

Objectives of Financial Reporting

  • Characteristics of useful information
  • Constraints in accounting
  • The classified balance sheet
  • Using the financial statements

Accrual Accounting Concepts

  • Timing issues & accrual accounting principles
  • The basics of adjusting entries
  • The adjusted trial balance & financial statements
  • Adjusting entries illustrated
  • Closing the books
  • Summary of the accounting cycle

Merchandising Operations

  • Operating cycles & inventory systems
  • Recording purchases of merchandise
  • Recording sales of merchandise
  • Income statement presentation
  • Evaluating profitability

Reporting and Analyzing Inventory

  • Classifying inventory
  • Periodic inventory system
  • Inventory costing
  • Inventory valuation
  • Analysis of inventory
  • Inventory cost flow methods in perpetual inventory systems

Internal Control and Cash

  • Internal control
  • Cash controls
  • Reporting cash
  • Managing and monitoring cash
  • Assessing cash adequacy
  • Operation of the petty cash fund

Reporting and Analyzing Receivables

  • Types of receivables
  • Accounts receivable
  • Notes receivable
  • Financial statement presentation of receivable
  • Managing receivables

Course Outline

Reporting and Analyzing Long-Lived Assets

  • Determining the cost of plan assets
  • Accounting for plant assets
  • Analyzing plant assets
  • Accounting for intangible assets
  • Types of intangible assets
  • Financial statement presentation of long-lived assets
  • Calculation of depreciation using several methods

Reporting and Analyzing Liabilities

  • Current liabilities & their types
  • Financial statement presentation and analysis
  • Long term liabilities
  • Bond basics
  • Accounting for bond issues
  • Accounting for bond retirements
  • Financial statement presentation & analysis
  • Contingent and lease liabilities
  • Effective interest amortization
  • Accounting for long term notes payable

Reporting and Analyzing Stockholder’s Equity

  • The corporate form of organization
  • Stock issue consideration
  • Accounting for treasury stock
  • Preferred stock
  • Dividends
  • Retained earnings
  • Financial statement presentation of stockholder’s equity
  • Measuring corporate performance

Reporting and Analyzing Investments

  • Why corporations invest
  • Accounting for debt investments
  • Accounting for stock investments
  • Valuation and reporting of investments

Statement of Cash Flows

  • Purpose and format
  • Indirect method
  • Direct method
  • Using cash flows to evaluate a company

Financial Analysis

  • Earning power & irregular items
  • Comparative analysis
  • Ratio analysis
  • Limitations of financial analysis

Text Books