In this course students will study the conventional financial accounting system, learn to interpret accounting terminology, and gain an appreciation of the uses and limitations of financial statements. The course covers financial accounting procedures including; business transactions; adjustments and closing the books; merchandise operations; financial statements; ledger organization and special journals; forms of business organization; accounting principles; accounting for cash, accounts receivable, inventory, capital stock and capital assets; analysis of financial data and financial statements.
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Upon successful completion, the student will be able to:
Analyze basic business transactions using the accounting equation; analyze and record transactions for merchandise purchases and sales using a perpetual system.
Differentiate the steps in the accounting cycle and accrual accounting, and how it adds to the usefulness of financial statements; and prepare basic adjusting entries.
Calculate the cost of an inventory. Analyze the effect of inventory errors on current and future financial statements and compute the lower of cost or market value of inventory.
Justify why internal control procedures are needed in a large organization and assess the broad principles of internal control.
Estimate accounts receivable uncollectibles using methods based on sales and accounts receivable.
Calculate the cost and record the purchase of plant assets; calculate amortization by the straight-line, units-of-production and declining balance methods as well as account for the disposal of capital assets.
Categorize the different forms of business organization and outline the advantages, disadvantages and organization of corporations.
Evaluate the characteristics of common and preferred shares and distribute the dividends between common and preferred shares.
Assess earnings per share information.
Interpret the information contained on a cash flow statement.
Compute standard financial ratios used for decision making.