INSTITUTE of BUSINESS MANAGEMENT

College of Business Management

Department of Accounting & Finance

Intermediate Financial Accounting ACC 201

Faculty:
1. Overall aims of the course

This course provides students a thorough understanding of Accounting concepts and assumptions
for bonds and shares issuance, debt investment, import & export transactions, preparation of cash
flow statements and stockholders’ equity and also provides students the tools, necessary to
understand and execute appropriate accounting procedures that enable students to understand the
process through which accounting standards are determined and to evaluate the outcomes of that
process from the perspectives of managers’ shareholders, auditors etc. Students will also learn to
assess competing accounting theories and methods from multiple perspectives.

2. Intended learning outcomes of course (ILOs)

a. Knowledge and understanding:

Students should be able to:

 provide an overview of financial accounting

 understand the key issues in financial accounting
 Differentiate between financial, managerial and cost accounting
 interpret financial statements using financial ratios
 distinguish between different types of corporations
 understand the difference between common and preferred stock
 define treasury stock and its accounting in case of acquisition and reissuance
 explain the meaning of earning per share
 understand the differences between bonds and share and their respective accounting
procedures
 Account for bond issues, bond interest, retirement and convertible bonds
 Analyze the investments in bonds
 Classify and analyze operating, investing and financing activities
 Understand the concept of financial ratios

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 and other situations.
 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
o analyze the impact of dividends on book value per share
o Explain the reasons of rise and fall in earning per share due to acquisition and
reissuance of treasury stock and distribution of cash and stock dividends.
o Recognize the accounting issues related to mortgage notes, leases and bonds
o Analyze the company’s performance in the light of ratio analysis

 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

Session Topics/Contents, Intended Learning Outcomes and Methodology

1 Topic/ Course contents

Class and course introduction

Revision of introduction to Financial Accounting concepts including; Forms of

business organization, Steps in accounting cycle, Double entry system of book
keeping, Balance sheet and its contents, Definition& content of income statement

2&3 GLOBAL ACCOUNTING

In this Chapter importance of financial as well as international reporting is

 explained to the students. Students are given the opportunity to learn about
international accounting from a perspective similar to what they will experience in
the business world. The course content includes; Objective of financial reporting,
the foundation of accounting and international accounting: Import/export
Accounting Transaction. Recording of buying/ selling of goods & gain/loss on
fluctuation.

Intended Learning Outcomes

1. Define the objective and characteristics of global accounting and

international reporting
2. Explain the importance of understanding of global accounting and its
practical application
3. Identify the key elements of a trading oriented company’s accounting and
discuss the key issues facing such companies
4. Discuss the role of global accounting in current world
5. Describe and Practical Application the method of recording selling and
buying transactions as importers as well as exporters and calculation of the
same
Teaching Material
Financial and Managerial Accounting – Williams , Hakka and Bettner, Chapter 15

Pedagogy
1. Pre Class independent study
2. Input session (students centered)
3. Lecture with discussion and problem solving
4. Review and evaluation (student centered)

4 to7 INTRODUCTION TO CORPORATIONS

This chapter emphasizes details of the corporate form of organization. The

accounting concepts and procedures for equity transactions are explained. It also
describes how to report and analyze income, earnings per share, and retained
earnings. The content includes; Nature of corporations, Nature & classification of
shares, Preparing journal entries for issuance, Preparing SHE(Stockholder’s
equity),Calculation of average issue price, book value per share under:-If
common shares issued &-If both common & preferred shares are issued, Stock
Dividends & cash Dividends:-How to prepare journal entries & SHE for
declaration and distribution of stock and cash dividends and Treasury Stocks

Intended Learning Outcomes:

1. Define types of businesses and corporations

2. Explain the difference between; common shares & preference shares and
 the concepts of and demonstrate the accounting treatments for par, no-par
and stated value stock and stock subscriptions
3. Identify the features, advantages and disadvantages of a corporate entity
4. Discuss the accounting methods of relating to corporations
5. Describe & Practical Application of dividends associated with preferred
and common stock, share holder’s equity, acquisition and reissuance
treasury stock and book value per share
Teaching Material
Financial and Managerial Accounting – Williams , Hakka and Bettner, Chapter 11

Pedagogy
1. Pre Class independent study
2. Input session (students centered)
3. Lecture with discussion with problem solving
4. Review and evaluation (student centered)

8-10 CORPORATIONS ADDITIOAL EQUITY ISSUES AND INCOME

REPORTING

This chapter focuses on the components of Income statement and retained

earnings statement. The income statement of a corporation includes the same
types of revenues and expenses as companies organized as sole proprietors and
partnerships with one difference. A corporation is a legal entity and therefore, it
must pay taxes. Some companies report additional items after income tax expense
on their income statements. These items represent special items outside of normal
business operations. They are shown separately to ensure users can identify what
income from continuing business results will be. If any special items are included
on the income statement, the income tax expense or savings related to each item is
net against the special item to report it after taxes. These additional special items
may be one of three types: discontinued operations, extraordinary items, and
changes in accounting principles. The content includes; Treasury stock, retained
earnings, corporate income reporting and earnings per share.

Intended Learning Outcomes:

1. Define types of income reporting and component of retained earnings

2. Explain the proper treatment of prior period adjustments and restrictions
that may be imposed on retained earnings and earnings per share
3. Identify the difference between cash dividends, stock dividends and stock
split in the accounting records
4. Discuss the accounting methods related to income reporting and dividends
5. Describe & Practical Application of disclosure rules for discontinued
operations, extraordinary items, accounting changes and intra period tax
allocation and computation of earnings per share
 Teaching Material
 Financial and Managerial Accounting – Williams , Hakka and Bettner,
Chapter 12
Pedagogy
1. Pre Class independent study
2. Input session (students centered)
3. Lecture with discussion and problem solving
4. Review and evaluation (student centered)

11-12 1st Mid Term Exam

Students will be assessed by means of an hour test focusing sharply on the

learning outcomes of accounting concepts taught so far.

13-14 LONG TERM LIABILITIES

Business constantly needs funds to finance their diverse activities which are
obtained from different sources. This chapter focuses on long term liabilities with
a concentration on bonds and other long term liabilities specifically mortgages,
leases, deferred taxes, pensions and post retirement health care benefits.

Intended Learning Outcomes

1. Define the basic differences between bondholders and stockholders

2. Explain the fundamentals of accounting for income taxes and employee
benefit plans, leases and mortgage notes
3. Identify the various types of bonds that may be issued
4. Discuss bond issues at par, premium and discount
5. Describe & Practical Application of ammonization under straight line
method and effective interest method and computations related to
mortgages and leases

Teaching Material
Accounting Principles by Lanny M. Solomon 4 th Edition, Chapter 17

Pedagogy
1. Pre Class independent study
2. Input session (students centered)
3. Lecture with discussion with problem solvings
4. Review and evaluation (student centered)

15-16 LONG TERM INVESTMENT

 Investments in assets are a fact of life for all businesses. This chapter focuses on
long term investment in corporate securities both bonds and stocks. Accounting
for stock acquisitions depends upon the percentage of shareholding. Thus different
accounting methods for different percentages of holdings will also be included.
The contents include; Investment in bonds, bond interest revenue, bond discount
and premium amortization, investments in stocks with method recording
investments with LCM, equity and controlling investment methods.

Intended Learning Outcomes

1. Define account for investments in bonds

2. Explain the reason for consolidated financial statements and the
related concepts of intercompany transactions and elimination entries
3. Identify parent / subsidiary relationships
4. Discuss company’s minority interest
5. Describe & Practical Application of consolidated financial
statements immediately after acquisition and lower of cost or market
and equity methods of accounting for stock investments

Teaching Material
Accounting Principles by Lanny M. Solomon 4 th Edition, Chapter 18

Pedagogy
1. Pre Class independent study
2. Input session (students centered)
3. Lecture with discussion with problem solving
4. Review and evaluation (student centered)

17-20 STATEMENT OF CASH FLOWS

Cash flow information is helpful to investors and creditors in judging future cash
flows from the company to themselves. The purpose of this chapter is to provide
information about the cash receipts and cash payments of a business entity during
the accounting period. In addition, the statement of cash flows is intended to
provide information about the investing and financing activities of the company
during the period.

Intended Learning Outcomes

1. Define the purpose of the statement of cash flows
2.Explain the direct and indirect methods of calculation of net cash flow from
operating activities
3.Identify the major classifications of cash flows
4. Discuss the accounting methods of preparation of statement of cash flows
5.Describe & Practical Application of statement of cash flows and use of a
worksheet in preparing a statement of cash flows.
Teaching Material
 Financial and Managerial Accounting – Williams , Hakka and Bettner, Chapter 13

Pedagogy
5. Pre Class independent study
6. Input session (students centered)
7. Lecture with discussion with problem solving
8. Review and evaluation (student centered)

21-22 2nd Midterm Exam

Students will be assessed by means of an hour test focusing sharply on their grasp
and learning outcomes of accounting concepts taught so far.

23-24 FINANCIAL STATEMENT ANALYSIS:

The basic financial statements provide much of the information; users need to
make economic decisions about businesses. This chapter focuses on the
Horizontal and vertical analysis and ratio analysis of the financial statements from
the perspective of common stockholders, long-term creditors and short term
creditors.

Intended Learning Outcomes

1. Define the different tools to analyze the financial statements

2. Explain the difference between horizontal , vertical and ratio analysis
3. Identify the features and advantages of financial statement analysis
4. Discuss how to compute the ratios widely used in financial statement
analysis
5. Describe the significance of ratios
6. Analyze the financial statements from the viewpoints of common
stockholders, creditors and other stakeholders of the company.

Teaching Material
Financial and Managerial Accounting – Williams , Hakka and Bettner, chapter 14.

Pedagogy
9. Pre Class independent study
10. Input session (students centered)
11. Lecture with discussion and problem solving
12. Review and evaluation (student centered)

25-28 Topic/ Course contents

SINGLE ENTRY OR ACCOUNTS FROM INCOMPLETE RECORDS
 Single-entry system of bookkeeping relying on a one sided accounting entry to
maintain financial information. A single entry system records each accounting
transaction with a single entry to the accounting records, rather than the vastly
more widespread double entry system. The single entry system is centered on the
results of a business that are reported in the income statement. The core
information tracked in a single entry system is cash disbursements and cash
receipts. Asset and liability records are usually not tracked in a single entry
system; these items must be tracked separately. These chapter will demonstrate
how to prepare a set of financial statements from incomplete records

Intended Learning Outcomes

1. Define the differences between single & double entry

2. Explain the conversion of single entry into double entry
3. Ascertain credit sales, credit purchases, debtors and creditors, bills
receivable and bills payable
4. Discuss the defects of single entry
5. Describe How to prepare financial statements with the help of incomplete
data

Teaching Material
Advanced Accounts by Shukla, Gupta, Chapter 8.

Pedagogy
13. Pre Class independent study
14. Input session (students centered)
15. Lecture with discussion with problem solving
16. Review and evaluation (student centered)

29-30 Final Exam

Students will be assessed by means of three hour exam for 40% of the overall
marks awarded, focusing sharply on the learning outcomes of accounting concepts
taught throughout the semester.

1. Teaching and learning methods

This course will be structured in such a way as to facilitate the use of different methods of
instruction. Students are expected to take an active role in their learning experience and will be
expected to have read the assigned material prior to class and to have prepared any written
assignments. Classroom session will include the lecture, question and answer session, group
discussions and class exercises and problems solving. Work may be done individually or in small
groups. The readings will come from the required text. Lectures and discussions will enable the
students to expand on and clarify the material presented in the readings.
2. Student assessment methods
Rubrics for Marking

Rubrics Below Average Average Proficient

Category
Import/export Not attempted or partially Transaction journalized Transaction journalized
Accounting attempted but with errors correctly
Transaction.
1 Recording of buying/
selling of goods &
gain/loss on
fluctuation.
Prepare Not attempted or partially Computations for SHE Computations for SHE
SHE(Stockholder’s attempted and book value and and book value and
equity),Calculation of preparing entries for preparing entries for
average issue price, corporations with corporations proficiently.
book value per share errors.
2
under:-If common
shares issued &-If
both common &
preferred shares are
issued,
Prepare journal Not attempted or partially Calculations and Calculations and journal
entries for Treasury attempted journal entries with entries are prepared
stock, stock dividends errors. correctly.
3
and calculations of
retained earnings, and
earnings per share.
Accounting for long Not attempted or partially Accounting for long Accounting for long term
4 term liabilities attempted term Liabilities with liabilities applied
issuance errors correctly
Accounting for long Not attempted or partially Accounting for long Accounting for long term
5 term investments attempted term investments with investments applied
issuance errors correctly
Prepare statement of Not attempted or partially statement of cash Statement of cash flows
cash flows by using attempted flows is prepared but prepared correctly
6
direct & indirect with errors
method
financial statements Not attempted or partially Financial statements Financial statements
7 analysis attempted analysis one with analysis done proficiently
errors
prepare financial Not attempted or partially Financial statements are Financial statements are
statements with the attempted prepared but with prepared correctly.
help of incomplete errors.
8
data( Single Entry
Accounting)
Assessment

Assessment Objectives to assess.. Week Weight age

methods
1 Quizzes Knowledge and understanding 3, 4, 12%
5
2 Assignments Knowledge and understanding 7,8,9 12%
3 Class Participation Attendance, Behavior 6%
4 1st Mid Term test Knowledge and understanding 6 15%

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

6 Final Examination Knowledge and understanding 16 40%
Total: 100%

Assignments:
Assignments will consist of explaining topics and students are required to relate the knowledge and
understanding with the real world.

3. Essential Reading

1) Financial and Managerial Accounting: 13th edition by Meigs, Williams, Haka and Bettner
2) Accounting Principles 4th Edition by Solomon
3) Advanced Accounting by Shukla, Gupta

Recommended Readings
1. Intermediate Accounting, Third Edition by Bart P. Hartman, Robert M. Harper, James A
Knoblett, and Phillip M. Reckers

2. Intermediate Accounting, Sixth edition by lanny G.Chasteen, Richard E. Flaherty and

Melvin C.O’Connor

4. Facilities required for teaching and learning

 Classroom multimedia
 Classroom overhead projector
 Panoramic whiteboard across front class wall
 Clock on back and front class wall
.

Room #

E-mail:
Head of Department
Date: