The course introduces the candidate to the fundamentals of the regulatory framework relating to financial reporting and to the qualitative characteristics of useful information. Following this, the course studies processing, documenting and recording business transactions and events. It then covers the principles of accounts preparation and the drafting of financial statements. It also covers the use of the trial balance and how to identify and correct errors. The course then teaches preparation of consolidated financial statements, consolidating a parent company with a single subsidiary and an investment in an associate. Throughout the course, the emphasis will be on preparation of the main financial statements, with only a brief review of the notes and disclosures. In the last sessions of the course, students learn how to analyze and interpret financial statements.
Credits: 5
Lecture Hours: 76.5
Self-Study Hours: 90
Total Study Hours: 226.5
Prerequisites
Students must have successfully passed Financial Accounting I (ACCT 211) before attempting this course.
The learning outcomes for this course cover four main areas: The context and purpose of financial reporting, recording transactions in double-entry accounting, preparing financial statements for a single company and group of companies, and financial statement analysis. On successful completion of this course, students will be able to:
1. Knowledge
Level of Learning | PLO | CLO | Learning Outcome |
---|---|---|---|
Understand | PK5 | CK1 | Explain users’ and stakeholders’ needs and responsibilities in relation to financial reporting and regulation thereof. |
2. Cognitive Skills
Level of Learning | PLO | CLO | Learning Outcome |
---|---|---|---|
Apply | PC7 | CC1 | Apply double-entry accounting to record common transactions involving income, expense, assets, liability and items of equity. |
Apply | PC7 | CC2 | Prepare basic financial statements: statement of financial position, statement of profit or loss and other comprehensive income, and statement of cash flows. |
Apply | PC7 | CC3 | Prepare a consolidated statement of profit or loss and a consolidated statement of financial position for a group comprising a single subsidiary. |
Analyze | PC1 | CC4 | Analyze and interpret basic financial statements. |
3. Communication, Information Technology, and Numerical Skills
Level of Learning | PLO | CLO | Learning Outcome |
---|---|---|---|
Apply | PCIT2 | CIT1 | Use Excel to carry out consolidation of basic financial statements |
4. Interpersonal Skills and Responsibilities
Level of Learning | PLO | CLO | Learning Outcome |
---|---|---|---|
Apply | PIP2 | CIP1 | Participate in a team to solve basic financial accounting and reporting problems. |
The course targets the 51 lessons in the study plan below. Each lesson is 1.5 class hours each; there are a total of 76.5 class hours. The study plan below describes the learning outcome for each lesson, described in terms of what the student should be able to do at the end of the lesson. Readings should be done by students as preparation before the start of each class. Implementation of this study plan may vary somewhat depending on the progress and needs of students.
No | Lesson Learning Outcomes | Teaching and Learning Activities, Assessment |
---|---|---|
1 |
Review of Accounting Basics
|
Lecture Demonstration of the accounting equation Group problem on the accounting equation Reading: Chapter 1 |
2 |
Business Entities, Governance
|
Lecture Group brainstorming on the financial information needs of stakeholders Case study of James Cropper Plc financial statements Problem sets to be solved in groups Reading: Chapter 1 |
3 |
The Regulatory Framework
|
Lecture Didactic questioning Discussion Reading: Chapter 2 |
4 |
The qualitative characteristics of financial information
|
Lecture Group problem-based learning Discussion Reading: Chapter 3 |
5 |
Sources, records and books of prime entry
|
Lecture Discussion Reading: Chapter 4 |
6 |
Ledger accounts and double entry
|
Lecture Demonstration of double entry from the books of prime entry Group problem to record transactions from books of prime entry Review test Reading: Chapter 5 |
7 |
From trial balance to financial statements
|
Demonstration of closing accounts and preparation of financial statements Reading: Chapter 6 |
8 |
From trial balance to financial statements
|
Discussion Group work to close accounts and prepare financial statements Reading: Chapter 6 |
9 |
Inventory
|
Lecture Demonstration of inventory costing Group problem solving to record inventory cost Reading: Chapter 7 |
10 |
Inventory
|
Lecture Discussion Reading: Chapter 7 |
11 |
Inventory
|
Lecture Demonstration of FIFO and AVCO Group problem solving to determine inventory following FIFO and AVCO Reading: Chapter 7 |
12 |
Property, Plant, and Equipment
|
Lecture Didactic questioning Case study to solve in groups Review test Reading: Chapter 8 |
13 |
Property, Plant and Equipment
|
Lecture Case study discussion Demonstration of recording depreciation and revaluation Group problems to record depreciation and revaluation Reading: Chapter 8 |
14 |
Property, Plant and Equipment
|
Lecture Didactic questioning Reading: Chapter 8 |
15 |
Intangible non-current assets
|
Lecture Case study discussion Demonstration of recording intangible asset cost and amortisation Group problem-based learning Reading: Chapter 9 |
16 |
Accruals and prepayments
|
Lecture Demonstration of recording accruals and prepayments Group problem-based learning Reading: Chapter 10 |
17 |
Accruals and prepayments
|
Lecture Demonstration of recording accruals and prepayments Group problem-based learning Reading: Chapter 10 |
18 |
Provisions and contingencies
|
Lecture Discussion Group problem based learning Review test Reading: Chapter 11 |
19 |
Irrecoverable debts and Allowances
|
Demonstration of determining and recording bad debts Group problem sets to determine and record bad debts Reading: Chapter 12 |
20 |
Irrecoverable debts and Allowances
|
Demonstration of determining and recording bad debts Group problem sets to determine and record bad debts Reading: Chapter 12 |
21 |
Sales Tax
|
Lecture Group problem-based learning Reading: Chapter 13 |
22 |
Control accounts
|
Lecture Demonstration of correcting errors in control accounts Group problem-based learning to correct errors Reading: Chapter 14 |
23 |
Bank reconciliations
|
Lecture and discussion Demonstration of preparation of a bank reconciliation Group work to prepare a bank reconciliation Reading: Chapter 15 |
24 |
Bank reconciliations
Midterm Case Study Exam |
Group problem-based learning Lecture and discussion Reading: Chapter 15 |
25 |
Correction of errors
|
Lecture and discussion Demonstration of use of suspense account Group problem based learning to solve errors using a suspense account Reading: Chapter 16 |
26 |
Incomplete records
|
Lecture Group problem-based learning Discussion Reading: Chapter 17 |
27 |
Preparation of financial statements for sole traders
|
Demonstration of preparation of a statement of profit or loss and a statement of financial position Group problem-based learning to prepare a statement of profit or loss and a statement of financial position Reading: Chapter 18 |
28 |
Introduction to company accounting
|
Lecture Demonstration of recording issue of shares, rights shares and a bonus issue Group problem-based learning Reading: Chapter 19 |
29 |
Preparation of financial statements for companies
|
Lecture Case study discussion Reading: Chapter 20 |
30 |
Preparation of financial statements for companies
|
Demonstration of preparation of financial statements Group problem-based learning to prepare financial statements Review test Reading: Chapter 20 |
31 |
Preparation of financial statements for companies
|
Demonstration of preparation of financial statements Group problem based learning to prepare financial statements Reading: Chapter 20 |
32 |
Preparation of financial statements for companies
|
Lecture Group problem-based learning Reading: Chapter 20 |
33 |
Preparation of financial statements for companies, Events after the reporting period
|
Lecture Didactic questions Group problem-based learning Reading: Chapter 20, 21 |
34 |
Statement of cash flows
|
Lecture Case study group analysis and discussion Reading: Chapter 22 |
35 |
Statement of cash flows
|
Demonstration of preparation of a statement of cash flows Group preparation of a statement of cash flows Reading: Chapter 22 |
36 |
Statement of cash flows
|
Demonstration of preparation of a statement of cash flows Group preparation of a statement of cash flows Review test Reading: Chapter 22 |
37 |
Statement of cash flows
|
Demonstration of preparation of a statement of cash flows Group preparation of a statement of cash flows Reading: Chapter 22 |
38 |
Introduction to consolidated financial statements
|
Lecture Didactic questions Case study discussion Reading: Chapter 23 |
39 |
The consolidated statement of financial position
|
Demonstration of preparation of a consolidated statement of financial position Reading: Chapter 24 |
40 |
The consolidated statement of financial position
|
Group case study to prepare a consolidated statement of financial position Discussion Reading: Chapter 24 |
41 |
The consolidated statement of financial position
|
Lecture Demonstration of calculation of goodwill Group problem set to calculate goodwill Discussion Reading: Chapter 24 |
42 |
The consolidated statement of profit or loss
|
Demonstration of preparation of a consolidated statement of profit or loss Group preparation of a consolidated statement of profit or loss Review test Reading: Chapter 25 |
43 |
The consolidated statement of profit or loss
|
Demonstration of preparation of a consolidated statement of profit or loss Group preparation of a consolidated statement of profit or loss Reading: Chapter 25 |
44 |
The consolidated statement of profit or loss
|
Demonstration of preparation of a consolidated statement of profit or loss Group preparation of a consolidated statement of profit or loss Reading: Chapter 25 |
45 |
Interpretation of financial statements
|
Case analysis and discussion Reading: Chapter 26 |
46 |
Interpretation of financial statements
|
Group case study analysis Discussion Reading: Chapter 26 |
47 |
Interpretation of financial statements
|
Group case study analysis Discussion Reading: Chapter 26 |
48 |
Interpretation of financial statements
Submission of Assignment |
Group problem sets Discussion Review test Reading: Chapter 26 |
49 | Review and preparation for final exam (All CLOs) | Lecture |
50 | Review and preparation for final exam (All CLOs) | Lecture |
51 | Review and preparation for final exam (All CLOs) | Lecture |
Total Hours: 76.5 hours |
This course is taught with a variety of teaching methods, including lecture, questioning, discussion, case study analysis, demonstration and group work.
Grades will be determined based on a grading score, calculated using the following assessments and score allocations:
Assessment | Weight of each assessment | Learning Outcome Assessed | |
---|---|---|---|
CLO | PLO | ||
Attendance | 5% | CIP1 | PIP2 |
Participation | 5% | CK1, CC1,CC2, CC3, CC4, CIT1, CIP1 | PK5,PC7,PC1,PCIT2,PIP2 |
In-class tests | 25% | CK1, CC1, CC3, CC4, CIT1 | PK5, PC7, PCIT2 |
Assignments | 15% | CC1, CC2 | PC7, PIP2 |
Midterm exam | 20% | CK1, CC1 | PK5, PC7 |
Final exam | 30% | CC1, CC2, CC3, CC4 | PC7, PC1 |
Total grading score | 100% |
During the course there is one assignment:
Preparation of Financial Statements
Work Group: | Group |
Output format: | IFRS format Financial Report |
Language: | English |
Assignment: | This assignment requires students working in groups of 2-5 to prepare a set of financial statements for a small business covering a period of one month. Students will need the agreement and cooperation of the business or shop in question. However, it may be that the business owner does not wish to share certain information. In that case, students should use the techniques for estimating missing information, making clear notes in their draft financial statements which items have been estimated. |
Textbooks
References