Principles of Financial Accounting

Course Number:: BA 211Z
Transcript Title:: Principles of Financial Accounting
Created:: Jul 26, 2022
Updated:: Apr 25, 2024
Total Credits:: 4
Lecture Hours:: 40
Lecture / Lab Hours:: 0
Lab Hours:: 0
Satisfies Cultural Literacy requirement:: No
Satisfies General Education requirement:: No
Grading Options: A-F, P/NP, Audit
Default Grading Options: A-F
Repeats available for credit:: 0

Prerequisites

IRW 115 or WR 115 or equivalent placement

Recommended

Placement into MTH 65

Course Description

Imparts an understanding of the purpose of accounting, common financial statement items, and the principles of internal controls. Focuses on recording the impact of economic events on account balances using U.S. Generally Accepted Accounting Principles, and the creation and analysis of financial statements to aid in external decision making. Recommended: placement into MTH 65. Prerequisite: IRW 115 or WR 115 or equivalent placement. Audit available.

Course Outcomes

Upon successful completion of BA 211, the student will be able to:

Describe the purpose of accounting and its role in business and society.
Explain common balance sheet and income statement items and how they fit in the accounting equation.
Analyze and record the impact of basic business events on account balances within the accounting cycle in accordance with U.S. Generally Accepted Accounting Principles.
Create the income statement and balance sheet using account balances in accordance with U.S. Generally Accepted Accounting Principles.
Describe the purpose and principles of internal controls.
Conduct basic analysis and interpretation of the income statement, balance sheet, and cash flow statement to aid in stakeholder decision making.

Suggested Outcome Assessment Strategies

The determination of assessment strategies is generally left to the discretion of the instructor. Here are some strategies that you might consider when designing your course: writings (journals, self-reflections, pre writing exercises, essays), quizzes, tests, midterm and final exams, group projects, presentations (in person, videos, etc), self-assessments, experimentations, lab reports, peer critiques, responses (to texts, podcasts, videos, films, etc), student generated questions, Escape Room, interviews, and/or portfolios.

Course Activities and Design

The determination of teaching strategies used in the delivery of outcomes is generally left to the discretion of the instructor. Here are some strategies that you might consider when designing your course: lecture, small group/forum discussion, flipped classroom, dyads, oral presentation, role play, simulation scenarios, group projects, service learning projects, hands-on lab, peer review/workshops, cooperative learning (jigsaw, fishbowl), inquiry based instruction, differentiated instruction (learning centers), graphic organizers, etc.

Course Content

Outcome #1: Describe the purpose of accounting and its role in business and society.

Financial reporting and transparency
- Recording transactions
- Financial statements
Decision-making support
- Planning and budgeting
- Performance evaluation
Compliance and legal requirements
- Tax compliance
- Regulatory reporting
Stakeholder communication
- Investor relations
- Creditor relations
Economic development and stability
- Investment decisions
- Market confidence

Outcome #2: Explain common balance sheet and income statement items and how they fit in the accounting equation.

Accounting Equation
Balance Sheet items
- Assets
  - Current Assets
  - Non-Current Assets
    - Fixed
    - Intangible
    - Investments
- Liabilities
  - Current Liabilities
  - Non-Current Liabilities
- Owner’s Equity
  - Stock
    - Common
    - Preferred
  - Retained Earnings
Income Statement items
- Revenue
  - Fees earned
  - Sales income
  - Interest income
  - Rental income
- Expenses
  - Cost of Goods Sold (COGS)
  - Operating expenses
  - Interest expense
  - Depreciation and amortization
- Profitability
  - Gross Profit
  - EBITDA
  - Operating Income (EBIT)
  - Net Income
Relationship between financial statements and Accounting Equation elements
Impact of transactions
- Profitability
- Assets and liabilities
- Equity changes

Outcome #3: Analyze and record the impact of basic business events on account balances within the accounting cycle in accordance with U.S. Generally Accepted Accounting Principles.

Understand the basic principles of U.S. GAAP
- Double-entry accounting
- Debits and credits
Documentation and analysis of business transactions
- Identifying a business event
- Transaction analysis
Recording transactions
- Determine the accounts affected
- Journal entries
- Posting to the ledger
  - General ledger
  - Subsidiary ledgers
- Unadjusted Trial Balance
  - Verify balances
  - Identify and correct discrepancies
- Make adjusting entries
  - Accruals and deferrals
  - Depreciation and amortization
- Financial statement preparation
  - Utilizing adjusted balances
  - Ensure accuracy and compliance
- Closing entries
Documentation and review
- Record-keeping
- Evolving GAAP standards

Outcome #4: Create the income statement and balance sheet using account balances in accordance with U.S. Generally Accepted Accounting Principles.

Confirm that students perform the following:

Gather and organize account balances
Prepare the Income Statement
- List Revenues
- List COGS
- Determine Gross Profit
- List Operating Expenses
- Determine Operating Profit
- List other income & expenses
- Determine Net Profit
Prepare the classified Balance Sheet
- List Assets
  - Current
  - Non-current
- List Liabilities
  - Current
  - Non-current
- List Owner’s Equity accounts
Review and finalize
- Make any necessary adjustments or corrections
Disclosures and notes
- Provide any necessary disclosures and footnotes as required by GAAP
Presentation and Distribution
- Present finalized statements in a clear and organized format
- Identify relevant stakeholders for distribution

Outcome #5: Describe the purpose and principles of internal controls.

Purpose of internal controls
- Safeguarding assets
- Detecting and preventing fraud & error
- Ensuring accuracy and reliability of financial reporting
- Promoting operational efficiency
- Complying with laws and regulations
Principles of internal controls
- Segregation of Duties
- Authorization and approval
- Physical controls
- Documentation and recordkeeping
- Monitoring and review
- Information and communication

Outcome #6: Conduct basic analysis and interpretation of the income statement, balance sheet, and cash flow statement to aid in stakeholder decision making.