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ACCT101

Financial Accounting G10, G11, G12


Course Outline 2014/2015 Term 2
A. General Information
Assistant Professor Jae Bum KIM
Level 4 Room 4010
School of Accountancy

Tel:
(65) 6808-5233
Email: jbkim@smu.edu.sg

Course website: https://elearn.smu.edu.sg


(the combined section: ACCT 101-Financial Accounting-G10-11-12)
Consultation times: Thursday 10:00AM ~ 1:00PM, or by appointment
Teaching Assistants
G10 (Tuesday 3:30PM ~ 6:45PM)
G11 (Wednesday 8:15AM ~ 11:30AM)
G12 (Wednesday 3:30PM ~ 6:45PM)

Heviyanti Christina NG(heviyanting.2013@business.smu.edu.sg)


Heviyanti Christina NG(heviyanting.2013@business.smu.edu.sg)
Heviyanti Christina NG(heviyanting.2013@business.smu.edu.sg)

B. Course Prerequisites: None


C. Course Description
This course provides students with a basic understanding of accounting as the language of business. It
introduces students to the basic concepts, principles, procedures and approaches underlying the
accounting process. In addition, coverage of accounting cycle will show how business transactions impact
financial statements, and ultimately the analysis of financial information for decision-making.

D. Learning Goals, Course Objectives and Skill Developments


All School of Accountancy courses are designed to meet certain learning goals and objectives. Some
learning goals are addressed at course level, some at overall program level. This course specifically
contributes to the development of the following course level learning goals:
LG1.1 Our students can recognize, develop, measure, record, validate and communicate financial and
other related information.
LG1.2 Our students can analyze, synthesize and evaluate financial and other related information for
decision making in a management context.
Students are expected to demonstrate the following technical accounting competencies upon successful
completion of this course:
Understand the role of accounting and the framework for financial reporting, including the
fundamental principles, qualitative characteristics and assumptions underlying financial accounting.
Demonstrate familiarity with the typical contents of an Annual Report and basic financial
reporting/disclosure requirements.
Transform transactional data into useful accounting information, including adjusting entries and
closing entries, leading to the preparation and presentation of financial statements.
Account for cash, receivables, inventory and non-current assets, liabilities and changes in equity.
Make inferences based on reasonable examination of financial statements, notes to the accounts
and other disclosures, of the financial position, financial performance and changes in financial
position of an entity.
Analyse and communicate financial information to users.
Develop an ability to independently learn, unlearn and re-learn relevant updates on accounting
standards, corporate regulations and other financial reporting and disclosure requirements.

ACCT101 Financial Accounting AY2014/2015 Term 2 Jae Bum KIM (G10 G12)

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In addition, students will also develop their versatility [LG2], individual competencies [LG3] and
awareness of ethics and responsibilities [LG4] through the various class and assessment activities:
Analytical Skills: Analytical skills will be developed through various problem solving, case
discussions and analysis. The course will provide the tools for students to use and analyse
accounting data and financial reports to make informed decisions.
Communication Skills: Students will be required to actively participate in the class discussions and
through written report and discussion of the company analysis project. The written report and
presentation (in Session 12) will be assessed on clarity of communication appropriate for a business
context.
Team work: Team projects, discussions and presentations will be important elements of the course.
All students will be required to work in teams, which will be randomly assigned by Week 3 of the
term. They are expected to work as partners and share the work load.
Active learning: Students will be expected to venture beyond prescribed readings and text. The
company analysis project will allow students to take an active role in their understanding of how the
end products of an accounting system serve information need of users.
Professional ethics: Ethical issues are discussed and cases will be reviewed. This introductory
course provides the opportunity to emphasize the needs for the highest ethical behaviour for
corporate executives and corporations.

E. Learning Approach
The pedagogical approach to this course consists of three interlocking elements:
Instructor-facilitated Learning: Facilitation, Clarification, Synthesis
Individual Learning: Preparation, Analysis, Action
Collaborative Learning: Teamwork, Discussion, Sharing
Learning activities are planned to take into account these three elements of learning. Both the technical
learning and skills objectives will be developed through a blend of theory and practice. An
understanding of basic accounting knowledge on major elements of financial statements is a prerequisite
for any future studies of accounting. Thus, each topic will start with a session on basic technical
knowledge, followed by a practical session, using exercises, discussions, case analysis, and other class
materials to enforce students understanding of the topic.

Theories are what you learn in textbooks, the methodological, structured and systematic study of a
discipline. The Harrison and Horngren textbook helps you learn, understand and practice concepts
and theories in financial accounting. You also have access to various e-learning materials (Financial
Accounting Learning Objects, FALO for short) in your learning management system (called e-learn
at https://elearn.smu.edu.sg/).
Cases are examples that we bring in to class to introduce the relevance of theories and concepts in
actual accounting practices. The casebook (see below) is a collection of case materials (typically
extracts of various annual reports and other readings) to help us appreciate the real-world importance
of the theories and concepts you read. It also highlights that textbook only covers so little you really
need to know about the world.

The role of the instructor is to facilitate, provide clarification of critical concepts, not to read out pages of
the textbook to you. Often, it is important to be able to see the trees from the forests and synthesise on
why certain things matters are just as important as how specific processes/procedures are performed.
Students are reminded that their individual contribution to learning starts before class. Students should
prepare by pre-reading, analysing the materials/tasks/cases to be covered before coming to class and
actively participate in class discussions. Preparation is the prerequisite for analysis which will allow you
to take action in your individual learning.
Collaborative learning elements are developed through your contribution to your classmates learning
experiences, either through teamwork in tackling your project or other assigned tasks, and being willing
to contribute to class discussions and share your findings and work so others will benefit. Naturally, your
individual preparation, analysis and action will determine how much you are able to contribute to
collaborative learning.

ACCT101 Financial Accounting AY2014/2015 Term 2 Jae Bum KIM (G10 G12)

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F. Textbook and Other Resources


Primary Text: Harrison, Horngren, Thomas and Suwardy
(2013), Financial Accounting: International Financial
th
Reporting Standards, 9 edition, Pearson
Case Book: Suwardy (2010), Understanding Financial
Statements: A Case-Based Approach, Pearson Prentice-Hall
FA Learning Objects: Suwardy (2006), numerous elearning resources is available in D2L
There are numerous basic financial accounting books in the library that you can further consult for
additional references.
You may require access to www.asc.gov.sg or www.ifrs.org for selected insights into applicable
accounting standards.
In addition, a good summary of accounting standards (IFRS in Your Pocket 2010) is available from
IASPLUS http://www.iasplus.com/dttpubs/pocket2010.pdf. Whilst you will not be expected to know all
accounting standards in any great detail in your first financial accounting course, you should have an
appreciation of the relevant accounting standards covered in this course.
Due to the nature of the coverage on emerging issues, students will be expected to ready widely from
professional, business publications and newspapers.

G. Abridged Lesson Plan


Class sessions are of 3-hour duration and will include a review of study materials, class discussions and
other learning activities. All course materials will be published in e-learn.
A brief outline of course schedule is provided below. A detailed course work plan is available in Annex 1.
Accounting Framework & Financial Statements
PPE (Property, Plant and Equipment) and
Recording Business Transactions
Intangibles
Liabilities
Processing Accounting Information
Owners Equity and Income Statement
Completing Accounting Cycle
Cash Flow Statement
Cash and Receivables
Financial Statement Analysis
Merchandising Operations and Inventory

H. Assessment and Evaluation


To pass the course, students are required to obtain a TOTAL mark of 50% or better. The assessment
components are listed below:
Components
1. Class Activities:
1-1) Homework (5%)

Weight
10%

A+
A
A-

>=86 %
83-85%
80-82%
77-79%
74-76%

1-2) Participation (5%)


2. Progress Assessment

25%

B+
B

2-1) Five quizzes (25%)


3. Assignments

15%

BC+

70-73%
66-69%

C
C-

63-65%
60-62%

D+
D
F

53-59%
50-52%
<=49%

3-1) Group Project Report (10%)


3-2) Group Case Work (5%)
4. Final Exam

50%

Sum

100%

ACCT101 Financial Accounting AY2014/2015 Term 2 Jae Bum KIM (G10 G12)

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1. Class Activities
Homework (5%)
Assigned homework must be submitted before class starts and must be hand-written. Any
printed copy will not be accepted.
The purpose of the homework problem solving is to motivate your self-study before the class.
Thus, relatively easy homework questions are assigned. However, you are expected to study
class materials before the class and try to solve these homework problems for yourself.
To answer all the questions correctly will be challenging. Therefore, grading homework is
based on your efforts, not on correctness. When reasonable amount of efforts are thought to
be exerted, two points will be given. One point will be given to the homework which shows
obviously minimal efforts (jotting down several lines). Zero point for no submission.
There are suggested problems in each class as well. Solving both homework problems and the
suggested problems is essential for the students to perform well in the examination and the quiz.
The solutions to homework and suggested problems will be ready on course website after the
collection of homework.
Participation (5%) and Class Behavior
A part of the course grade would be allocated to class participation and discipline. You will get
participation points by providing constructive feedbacks.
Maintain proper discipline and conduct yourself in a responsible manner.
Students are encouraged to raise questions and to participate in the class (e.g., suggestions,
comments, etc).
There are several specific behavioural codes for this class: 1) Absolutely NO CELLPHONE
(including SMS), 2) Prudent use of notebook computer (you may use notebook computer only
for class related purpose), 3) Obtain permission from the professor for absence of the class in
advance.
2. Progress Assessment
Quizzes (25%): Regular quizzes will be given in class. There will be a total of 5 quizzes. Each quiz
typically takes 30 minutes and has 30 maximum points. Your lowest score from the 5 quizzes will be
dropped in the final grade.
3. Assignments
Group Case Work (5%)
Students will be assigned into groups (of 4-5 members) and asked to discuss, solve cases, and
submit a group report. There are 5 cases in total.
The purpose of the group exercise is not just to test your knowledge, but to improve your ability
to discuss accounting subjects, deliver your opinions, and work together in a group.
You are required to read the assigned article before coming to class, analyze problems,
synthesize and properly structure arguments. In class, we will have a short group discussion and
an open discussion in which you are expected to actively participate. For each case, I will also
provide you with a list of questions that you should examine before coming to class.
Each group (not individual students) has to write a two-page report of each case based on the
group discussion and class discussion. A group report should be typed, 1.5 line spaced, and
based on 12 point font size. Your report should not be just a bullet point list of answers. It
must show a coherent flow and exhibit a cohesive examination of the case.
Students are expected to work in a group and it is important to participate in the group works
equally. To prevent free-riders, the scores will be adjusted based on peer evaluation within each
group.
The due time for submission of the case report is one week after a case is discussed in class.
Refer to the Annex 1 for the deadline of each case work. Late submission will not be
accepted.
Group project (10%): There is a term group project report.
information.

ACCT101 Financial Accounting AY2014/2015 Term 2 Jae Bum KIM (G10 G12)

Please see Annex 2 for more

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4. Final exam (50%)


The final examination is on Saturday, 18 April 2015 from 1:00PM to 4:00PM.
The exam covers topics from the entire course and is closed-book.
Further information will be provided as the term progresses.
No Alternative Final Exam: Requests by students to take the final exam on other than the officially
scheduled date/time will not be approved except under extremely extenuating circumstances entirely
beyond the students control. Students who believe they may be unable to take the final exam
on the scheduled date and time should not enrol for this course this term.

I. Other Course Policies


1. Academic Integrity
All acts of academic dishonesty (including, but not limited to, plagiarism, cheating, fabrication,
facilitation of acts of academic dishonesty by others, unauthorized possession of exam questions, or
tampering with the academic work of other students) are serious offences.
All work (whether oral or written) submitted for purposes of assessment must be the students own
work. Penalties for violation of the policy range from zero marks for the component assessment to
expulsion, depending on the nature of the offense.
When in doubt, students should consult the instructors of the course. Details on the SMU Code of
Academic Integrity may be accessed at http://www.smuscd.org/resources.html.
2. Quiz / Exam Policy
Students should not share the exam contents with others (including students in other sessions) until
exam grading has been fully completed.
There will be no make-up for quizzes unless a well-written medical document for true emergency is
provided.
3. Copyright
Any copy-righted materials posted on the course website or distributed in class are for students
learning purpose only.
The copyrights belong to the respective authors/publishers. Students usage of the material is
governed by the law.
4. Other comments
The general approach of this course is lecture, problem-solving, and discussion of cases relevant to
the topic. Students who read the chapter ahead of attending class will benefit most from the class
presentation. As an alternative, students may study the lecture notes ahead of the class.
Please check the course website regularly in order not to miss important announcements. Although
major announcements will be made both in classroom and course website, it is the sole responsibility
of the students to find out what has been announced during their absence from class.
I strongly encourage you to let me know any problems related to this course as soon as they
arise. Please do not allow problems to accumulate because it will be more difficult to solve them
later. In this course, each chapter builds on the previous chapters. It is like constructing a building
the foundation first, then the ground floor, then the first floor so on. If you have problems in the
earlier parts, you will not be able to understand the later parts. Moreover, the level of difficulty
increases as lectures progress. It is much easier to get high marks in the earlier quizzes, but it would
be difficult to get even a decent grade in the final exam. Hence, it is very important to be serious with
your studies right from the beginning.
Prepared by Jae Bum KIM, 10 December 2014
Vetted by: SEOW Poh Sun, 23 December 2014

ACCT101 Financial Accounting AY2014/2015 Term 2 Jae Bum KIM (G10 G12)

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Annex 1: Detailed Course Work Plan


(The following schedule is tentative. It may change depending on the pace of the class)
Week

1
1/5
1/11

Topic

2
1/12
1/18

Introduction and
Ch.1. Conceptual Framework and Financial
Statements
Ch.2. Recording Business Transactions
Ch.2. Recording Business Transactions
(Remainder)
Ch.3. Accrual Accounting & Income

3
1/19
1/25

Homework
Assignments
(to be handed up)

Suggested Problems
(for your own practice)
E1-17A, 18A, 24A,
25A, 26A,
P1-58A, 59A, 61A

S2-3, 5, 7, 9,12

E2-15A, 20A, 21A,


P2-61A, 62A, 64A

Quiz 1
Ch.3. Accrual Accounting & Income
(Remainder)

S3-1, 3, 10, 11

E3-18A, 26A, 29A,


P3-62A, 63A, 67A

4
1/26
2/1

Ch.4. Presentation of Financial Statements


Ch5. Internal Control, Cash, and Receivables
Group Case #1 (Revenue Recognition)

S4-7, 8, 12

E4-13A, 17A, 18A, 20A


P4-40A, 41A, 42A
E5-23A, P5-64A

5
2/1
2/8

Quiz 2
Ch5. Internal Control, Cash, and Receivables
Ch.6. Inventory and Merchandizing Operations

S5- 6, 7, 10, 12

E5-27A, 28A, P5-67A

Case write-up
(Case #1)

E6-17A, 19A, 27A,

6
2/9
2/15

Ch.6. Inventory and Merchandizing Operations


(Remainder)
Ch.7. PPE and Intangibles
Group Case #2 (Working Capital)

S6-4, 5, 7, 12

P6-61A, 64A

7
2/16
2/22

Quiz 3
Ch.7. PPE and Intangibles (Remainder)
Ch.9 Liabilities (including Appendix B and
excluding Lease and Pensions)

S7-4, 5, 6

E7-15A, 22A,
P7-62A, 64A, 67A

Case write-up
(Case #2)

2/23 3/1. Recession Week, No Class. Have a nice break.


9
3/2
3/8

Ch.9 Liabilities ((Remainder)


Group Case #3 (Capitalizing Expenses)

S9- 1, 2, 6, 8

E9-21A, 24A, 25A,


26A, 27A
P9-73A, 75A, 78A

10
3/9
3/15

Quiz 4
Ch.10. Shareholders Equity

S10- 5, 6, 10

E10-24A, 25A, 34A


P10-76A, 77A, 78A

11
3/16
3/22
12
3/23
3/29
13
3/30
4/5

Ch.11. The Statement of Cash Flows


Group Case #4 (Share Repurchase &
Dividend)
Ch.11. The Statement of Cash Flows
(Remainder)
Group Case #5 (Earnings Management)
Quiz 5
Ch.12. Financial Statement Analysis

14
4/6
4/12

Self-review of the course and preparation for


the final exam, No class

Case write-up
(Case#3)
S11- 6, 7, 8

E11-16A, 20A, 21A,


P11-60A, 63A

S11- 9, 10, 11
Case write-up
(Case#4)
S12- 6, 7, 8
Case write-up
(Case#5)

E11-22A, 23A, 26A


P11- 61A, 65A, 66A

N.A.

N.A.

E12-18A, 21A,
P12- 52A, 53A,55A

Final Exam
Saturday, 18 November 2015 from 1:00PM to 4:00PM
Venues will be announced later.

ACCT101 Financial Accounting AY2014/2015 Term 2 Jae Bum KIM (G10 G12)

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Annex 2: Guideline for Term Group Project


1. Purpose
The purpose of the group project is to provide you with an understanding of the preparation of annual
reports. You should be able to critically analyze and evaluate various aspects of the financial
statements, with emphasis on (but not limited to) the topics discussed in the course.
Your group will assume the role of a financial analyst and conduct research for a client (e.g., an
individual investor). Alternatively you could assume the role of a product manager evaluating
competitors. Your client has asked you to analyze the financial statements of one company and its two
competitors you may choose its two major competitors from the same industry. Your analysis should
focus on the chosen company. However, you need to compare its performance with those of other two
companies in the same industry.

2. Assessment and Submission


The group project report carries 10% of the total marks of the course. It will be graded on content and
level of analysis. Students are expected to work in a group and members of a group would peerevaluate the contribution of group members. The due time for submission of the project report is 5:00PM
on April 9, 2015 (Thursday). Late submission will not be accepted.

3. Company Selection
Each group must select a company from the list which will be provided later.

4. Format
Ten pages maximum Your report should include supporting analyses as appendices to the ten
pages. The cover page is not counted in the page number. The latest available Annual Report used
in the analysis must be appended. Your data should cover at least two years of latest annual
reports.
Typed, 1.5 line spaced, 12 point font size.

5. Content
The final report must include (i) a cover page, (ii) executive summary, (iii) analysis, and (iv)
conclusion.
You are required to address all questions with (*) listed below. Feel free to address other listed
questions in your report. Workings, if any, must be shown. You may use other sources of information
(e.g. companys website, press release, newspaper clippings, etc) but they must be properly sourced and
noted.
Your report should not be just a bullet point list of answers. It must show a coherent flow and exhibit
a cohesive examination of the company. You must discuss the subject firms profitability (including
quality and persistence of earnings), effectiveness of asset utilization, debt servicing (liquidity,
risk assessment), cash flows management, and overall performance where they are applicable.

(1) Company and Industry Overview

(*) What are the principal activities of the company?


What is the geographical coverage of the company?
(*) What are the major trends in the industry?
Who are the companies major competitors?
Have any significant events happened at your companies that will be important to consider as you
analyze their results?

(2) Financial Statements Overview


(*) Define and compute major financial ratios. Your definition of ratios should be consistent with
those in the textbook.

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(3) Income Statement Discussions


(*) What were the companys total revenues for the year under review?
State the composition of the revenues of the company, allocate according to products, locations,
activities, etc where possible.
(*) What are the bases of revenue recognition adopted by the company? Are they appropriate?
(*) Looking at the revenue and profit before tax in the three years presented in the annual report,
would you say the company have had a good year? Provide evidence to justify your conclusion.
(*)Draw up a common-sized statement for the year under review. Comment on the result.

(4) Current Assets and Current Liabilities


(*) If your company has inventory, state which inventory cost flow assumption is used.
(*) What is the working capital of the company for the year under review and that of the previous
year?
State the composition of current assets and current liabilities for each year.
(*) If your company has allowance for doubtful accounts, show how this allowance is determined.

(5) Long-Term Assets


List by types and amounts the property, plant and equipment of the company.
(*) What depreciation method does the company use for financial reporting?
What would have been the journal entry the company made to account for the depreciation for the
year?

(6) Long Term Debt and Equity Financing


State the nature and amount of each liability in the long-term liabilities section of the balance sheet.
(*) Considering your companys operating circumstances, which do you think is the best way to
finance its purchase of long-term assets; through internally generated funds, shareholders
contributions, or through long-term borrowings? Why?

(7) Statement of Cash Flows


(*) Compare the companys cash position for the year under review with that of the previous year.
Comment on the improvement or deterioration of the companys cash position.
Which method (direct or indirect or both) did the company use in the preparation of its statement of
cash flows?
(*) State the main sources of cash inflow during the year and the main uses to which cash has been
used.

(8) Miscellaneous
(*) What non-financial information disclosed in the annual report that you find most useful and
relevant?

6. Useful references

Accounting Standards Council (ASC) : http://www.asc.gov.sg/


Singapore Exchange (SGX): http://www.sgx.com/ (annual reports are available)
U.S. Securities and Exchange Commission (SEC): http://www.sec.gov/
U.S. Financial Accounting Standards Board (FASB): http://www.fasb.org/
New York Stock Exchange (NYSE): http://www.nyse.com/
NASDAQ: http://www.nasdaq.com/
MSN Money: http://moneycentral.msn.com/investor/sec/filing.asp?Symbol
Yahoo Finance: http://finance.yahoo.com/
WSJ Free Annual Reports: http://wsjie.ar.wilink.com/asp/WSJ3_search_eng.asp
Thomson ONE Banker and OneSource: Databases from SMU Library website

ACCT101 Financial Accounting AY2014/2015 Term 2 Jae Bum KIM (G10 G12)

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