Financial Accounting

Financial Accounting

Financial Accounting provides an introduction to basic accounting principles, concepts, and terminology. It reviews GAAP Principles and financial statements, rules of double-entry accounting, the accounting cycle, and other accounting topics. The course engages students through a series of hands-on mini-cases involving a fictional furniture company that help instructors assess students’ mastery of the content.

Through MindEdge’s adaptive learning, students can access help for more than 20 accounting topics. The course provides support for those “pain points” where students often encounter learning difficulties.

Module 1: Introduction to Accounting and Business

  • Understand the role of accounting in business
  • Know who the users of accounting information are
  • Learn the process by which accounting provides information to users
  • Understand the differences between the various types of accounting
  • Know the differences existing between service, merchandising and manufacturing businesses
  • Identify the costs and benefits of each type of legal business structure
  • Understand the business entity concept and how it is applied
  • Distinguish the differences between accrual versus cash-basis accounting
  • Identify and discuss the meaning of the four GAAP Assumptions
  • Apply the four GAAP Principles
  • Understand and apply the four GAAP Constraints

Module 2: The Accounting Cycle

  • Utilize and apply the rules of the accounting equation
  • Recognize and understand the six steps of the accounting cycle
  • Realize that revenue is recognized when it is earned and realizable
  • Understand that expenses are recognized when they are incurred
  • Execute the process of double entry accounting including: posting adjusting and closing entries, preparing adjusted trial balances, financial statements, and post-closing trial balances
  • Apply the rules of Double Entry Accounting
  • Interpret the rules of debit and credit
  • Analyze transactions that increase or decrease assets, liabilities and/or equity
  • Explain the normal balance concept and how it relates to t-accounts
  • Classify accounts as assets, liabilities, or equity accounts

Module 3: Internal Control and Ethics In Accounting

  • Relay the main purpose of the Sarbanes-Oxley Act
  • Provide an accurate definition for internal controls
  • Discuss the objectives of internal controls
  • Apply the five elements of internal control
  • Understand the need for competent personnel, rotation of duties, mandatory vacations, and separated responsibilities
  • Explain the need for carefully controlling cash and cash transactions
  • Prepare and account for bank reconciliations
  • Understand how petty cash is used
  • Discuss the ethical obligations of working in a business environment

Module 4: Financial Statements

  • Understand who stakeholders are
  • Explain the general purpose of financial statements
  • Identify the four fundamental qualities of financial statements
  • Possess a working knowledge of the four financial statements
  • Explain why income statement is an important piece of financial information
  • Analyze the statement of owner’s equity
  • Evaluate financial information in a balance sheet
  • Interpret the statement of cash flow
  • Understand the single-step and multi-step method for preparing financial statements
  • Produce a single-step income statement

Module 5: The Adjusting Process, Depreciation, and Capitalization

  • Understand and apply the need for adjusting entries to ensure 100% accurate financial statements
  • Recognize the four basic types of accounts that require adjusting entries
  • Properly account for prepaid expenses, unearned revenues, accrued revenues, and accrued expenses
  • Make adjusting entries for prepaid expenses, unearned revenues, accrued revenues, and accrued expenses
  • Understand the transition from the unadjusted trial balance to the adjusted trial balance via adjusting entries
  • Complete the closing process by making closing entries
  • Outline the accounting requirements for depreciating, amortizing, and depleting assets
  • Differentiate between the four most common methods of depreciating an asset
  • Calculate the depreciation of an asset using the straight-line, sum-of-the-years, units of production, and double declining balance methods.
  • Explain the differences between real and nominal accounts

Module 6: Accounting for Inventory

  • State the major expense of a merchandising business
  • Develop a working understanding of a merchandiser’s operating cycle
  • Account for sales discounts, sales returns, and sales allowances
  • Know the biggest difference between a merchandiser’s balance sheet and the balance sheet prepared for a service company
  • List the two primary objectives of inventory control
  • Read and account for a purchase order, receiving report, and vendors’ invoice
  • Accomplish inventory costing using the first-in-first-out, last-in-first-out, average cost, and specific identification cost method
  • Understand the differences between the perpetual and periodic inventory costing systems
  • Execute the adjustment for valuing inventory at Lower of Cost or Market
  • Demonstrate an understanding of the behavior of and assumptions related to relevant range, of both fixed and variable costs

Module 7: Accounting for Assets, Intangibles, and Investments

  • Explain the two primary ways that a firm can obtain assets
  • Understand that assets are resources that have some future economic value
  • Classify long-term assets as property, plant and equipment, and intangible assets
  • Understand that liabilities are obligations to make future payments to creditors
  • Discuss how long-term assets are acquired and disposed
  • Understand the difference between common and preferred stocks
  • Make fair market adjusting entries for bond or stock investments
  • Analyze retained earnings as a source of owner’s equity
  • Evaluate when expenditures should be capitalized or expensed
  • Formulate the journal entries for gains and losses when assets are sold

Module 8: Cash Flow, Financial Analysis, and Profitability

  • Describe the purpose of financial analysis
  • State how horizontal analysis is used to measure financial performance
  • Calculate standard financial ratios
  • Perform both a horizontal and vertical analysis of a financial statement
  • Utilize financial ratios to analyze business decisions
  • Examine Pro Forma Statements to predict the future of a company’s financial situation
  • Assess the pitfalls of ratio analysis
  • Discriminate the nuances that both horizontal and vertical analysis provide
  • Illustrate a comparative analysis of a company or industry by employing benchmarking techniques
  • Apply the DuPont method of analysis