LahoreUniversityofManagementSciences

ACCT100PrinciplesofFinancialAccounting
FallSemester2016

Instructor
RoomNo.
OfficeHours
Email
Telephone
Secretary/TA
TAOfficeHours
CourseURL(ifany)

OmairHaroon
SDSB437
TBA
omair.haroon@lums.edu.pk

8394
TBA
TBA
suraj.lums.edu.pk/~ro/

COURSEBASICS
CreditHours
Lecture(s)
Recitation/Lab(perweek)
Tutorial(perweek)

3Credits
NbrofLec(s)PerWeek
NbrofLec(s)PerWeek
NbrofLec(s)PerWeek

2
None
1

Duration
Duration
Duration

75mins
N/A
60mins

COURSEDISTRIBUTION
Core
Elective
OpenforStudentCategory
CloseforStudentCategory

CoreCourseforACFFreshmen

Freshmen(ACFmajorsonly), OpenforAllinphaseII

COURSEDESCRIPTION

The course is designed to provide an understanding of financial accounting fundamentals for prospective users of corporate
financial information, such as investors, creditors, employees, and other stakeholders (e.g., suppliers, customers). The course
focusesonunderstanding how economicevents suchas operatingactivities, corporate investments, andfinancing transactions
arerecordedinthethreemainfinancialstatements(i.e.,theincomestatement,balancesheet,andstatementofcashflows).The
mainemphasisofthiscourseisplacedonthebasicframeworkofaccountingsoastoprovidethestudentwithanunderstanding
ofthefundamentalaccountingprinciplesandconcepts.Aheavyreliancewillbeplacedonproblemsolvingandpracticalanalyses
to achieve the aforementioned level of understanding. Students will develop the technical skills needed to analyze financial
statements and disclosures for use in financial analysis. Students will also learn how accounting standards and managerial
incentives affect the financial reporting process. The tools and skills you learn in this course will help you throughout your
professionalcareerandyourlife.

COURSEPREREQUISITE(S)

The course is recommended for students with little or no prior background in financial accounting that want to improve their
financial literacy. Thereareno academic prerequisites for thecourse.Although wewill work with numbers inthe course, the
onlyrequiredmathknowledgeisaddition,subtraction,multiplication,anddivision.

LahoreUniversityofManagementSciences
COURSELEARNINGOBJECTIVES(CLO)

1.

2.

3.
4.

5.

6.

7.

8.

9.
10.
11.
12.

ThiscoursewillintroduceyoutothekeyconceptsofAccounting.Youwilllearntopreparefinancialstatements
andwillalsobeequippedtoanalyzethem.Aftertakingthiscourse,youwillbeableto:

Describethenature,usesandpurposesoffinancialaccounting,andoutlineboththeconceptualandregulatory
frameworksthatgovernthepreparationandreportingoffinancialinformation
Explaintheaccountingequationanditslinkwithfinancialstatements,andillustratetheimpactofeconomic
transactionsontheaccountingequation
Describethekeyconceptsandconventionsthatunderliefinancialaccounting
Describeandapplythetransactionsrecordingprocessfromsourcedocumentstofinancialstatementsviathe
booksofprimeentry,ledgersandtrialbalance
Explain the nature and purposes of control accounts and apply appropriate correcting techniques for errors
andomissions
Explain and apply the recognition and measurement principles relating to: noncurrent liabilities and equity,
noncurrentassets(includingdepreciationandamortization),inventories(andcostofsales)andothercurrent
assetsandliabilities(includingreceivablesandbaddebts,prepaymentsandaccruals,etc.)
Explainthecharacteristicsofasoleproprietorvisvisacompany;andpreparefinancialstatementsforboth
formsofentities
Explain the characteristics of a partnership, prepare financial information for a partnership including the
admissionofapartnerandthedissolutionofapartnership
Applyaccountingprinciples,conceptsandconventionsinpracticalsituations
Demonstratebasicproblemsolvingskills
Demonstrateanabilitytoundertakeindependentstudyandtomanagetime
Demonstratebasicnumericalskills

UNDERGRADUATEPROGRAMLEARNINGGOALS&OBJECTIVES
GeneralLearningGoals&Objectives
Goal1EffectiveWrittenandOralCommunication
Objective:Studentswilldemonstrateeffectivewritingandoralcommunicationskills
Goal2EthicalUnderstandingandReasoning
Objective:Studentswilldemonstratethattheyareabletoidentifyandaddressethicalissuesinanorganizationalcontext.
Goal3AnalyticalThinkingandProblemSolvingSkills
Objective:Studentswilldemonstratethattheyareabletoidentifykeyproblemsandgenerateviablesolutions.
Goal4ApplicationofInformationTechnology
Objective:Studentswilldemonstratethattheyareabletousecurrenttechnologiesinbusinessandmanagementcontext.
Goal5TeamworkinDiverseandMulticulturalEnvironments
Objective:Studentswilldemonstratethattheyareabletoworkeffectivelyindiverseenvironments.
Goal6UnderstandingOrganizationalEcosystems
Objective:StudentswilldemonstratethattheyhaveanunderstandingofEconomic,Political,Regulatory,Legal,Technological,
andSocialenvironmentoforganizations.

MajorSpecificLearningGoals&Objectives
Goal7(a)DisciplineSpecificKnowledgeandUnderstanding
Objective:Studentswilldemonstrateknowledgeofkeybusinessdisciplinesandhowtheyinteractincludingapplicationtoreal
worldsituations(includingsubjectknowledge).
Goal7(b)Understandingthesciencebehindthedecisionmakingprocess(forMGSMajors)
Objective:Studentswilldemonstrateabilitytoanalyzeabusinessproblem,designandapplyappropriatedecisionsupport
tools,interpretresultsandmakemeaningfulrecommendationstosupportthedecisionmaker

LahoreUniversityofManagementSciences
Indicatebelowhowthecourselearningobjectivesspecificallyrelatetoanyprogramlearninggoalsandobjectives.

ProgramLearningGoalsand
Objectives

CourseLearningObjectives

CourseAssessmentItem

Goal1EffectiveWrittenandOral
Communication

Studentswillhaveanopportunityto
demonstratetheircommunicationskills
byinteractinginclassroomdiscussion
Ethicalunderstandingisembeddedinthe
contentofthiscoursethroughtheuseof
theInternationalFinancialReporting
Standards(IFRSs).
Analyticalthinkingandproblemsolving
skillsareembeddedinthecontentofthis
courseandareessentialforcompleting
thiscoursesuccessfully

Classroomdiscussions

Internationalization isembeddedinthe
contentofthiscoursethroughtheuseof
theInternationalFinancialReporting
Standards(IFRSs).Moreover,the
principlesofintroductoryfinancial
accountingarecommonacrossmost
countries.
Understandingorganizationalecosystems
isembeddedinthecontentofthiscourse
throughtheuseoftheInternational
FinancialReportingStandards
(IFRSs).Moreover,theprinciplesof
introductoryfinancialaccountingare
commonacrossmostcountriesand
companies.
Thecourse contentmeetsthestandards
oftheprofessionalaccountancybodies
(e.g.ICAP,ICAEW,ACCAandCIMA).
Thecourseexplainthefinancialand
ethicaleffectsofchoosingoneGenerally
AcceptedAccountingPrinciple(GAAP)
overanotherGAAP

Classroomdiscussions,Quizzes,
Assignments,andExams

Goal2EthicalUnderstandingand
Reasoning

Goal3AnalyticalThinkingandProblem
SolvingSkills

Goal4ApplicationofInformation
Technology
Goal5TeamworkinDiverseand
MulticulturalEnvironments

Goal6UnderstandingOrganizational
Ecosystems

Goal7(a)DisciplineSpecificKnowledge
andUnderstanding
Goal7(b)Understandingthescience
behindthedecisionmakingprocess

Classroomdiscussions,Quizzes,
Assignments,andExams

Classroomdiscussions,Quizzes,
Assignments,andExams

Classroomdiscussions,Quizzes,
Assignments,andExams

Thetextbookusedforthiscourseis
basedonInternationalFinancial
AccountingStandards(IFRSs)
Classroomdiscussions,Quizzes,and
Assignments

LahoreUniversityofManagementSciences
GRADINGBREAKUPANDPOLICY

Quiz(s):
Assignment
Attendance/CP:
MidtermExamination:
FinalExamination:

20%
10%
10%
30%
30%

Pleasenotethatnoquizwillbedropped.Underextenuatingcircumstances,foramissedquiz,themeanoftheclassinthemissed
quizorthemeanofthestudentsotherquizzes,whicheverislowerwillbepostedforonlyonemissedquiz.Quizzesarenormally
givenatthebeginningofasession,youareexpectedtobeinyourseats5minutesbeforeeachclasssession,latewalkinsona
quizdaydisturbthewholeclassandwillnotbeallowedtotakethequiz.
Iexpectyoutobepunctualandbeinyourseatbeforetheclassstarts.Latewalkinwillbecountedasanonattendanceandwill
loweryourattendancegrade.

EXAMINATIONDETAIL
Midterm
Exam

FinalExam

Yes/No:Yes
Combine/Separate:Combine
Duration:2hours
PreferredDate:MidtermWeek
Closedbooks,closednotes,youmaybringcalculator.Youwillnotbeallowedtouseyourcellphoneasa
calculatororborrowcalculatorfromsomeoneinclass
Yes/No:Yes
Combine/Separate:Combine
Duration:2hours
PreferredDate:FinalExamweek
Closedbooks,closednotes,youmaybringcalculator.Youwillnotbeallowedtouseyourcellphoneasa
calculatororborrowcalculatorfromsomeoneinclass

COURSEOVERVIEW

SESSION

SESSIONTOPIC

READING
SESSIONOUTCOME(S)
MATERIAL (AFTERCOMPLETINGTHISSESSION,YOUSHOULDBEABLETO)

AccountinginAction

Chapter1

TheRecordingProcess

Chapter2

1. Explainwhataccountingis.
2. Identifytheusersandusesofaccounting.
3. Understandwhyethicsisafundamentalbusinessconcept.
4. Explainaccountingstandardsandthemeasurementprinciples.
5. Explainthemonetaryunitassumptionandtheeconomicentity
assumption.
6. Statetheaccountingequation,anddefineitscomponents.
7. Analyzetheeffectsofbusinesstransactionsontheaccountingequation.
8. Understandthefourfinancialstatementsandhowtheyareprepared.
(CLO17)
1. Explainwhatanaccountisandhowithelpsintherecordingprocess.
2. Definedebitsandcreditsandexplaintheiruseinrecordingbusiness
transactions.
3. Identifythebasicstepsintherecordingprocess.
4. Explainwhatajournalisandhowithelpsintherecordingprocess.
5. Explainwhataledgerisandhowithelpsintherecordingprocess.
6. Explainwhatpostingisandhowithelpsintherecordingprocess.
7. Prepareatrialbalanceandexplainitspurposes.
(CLO17)

LahoreUniversityofManagementSciences
3

TheRecordingProcess Chapter2
AdjustingtheAccounts Chapter3

AdjustingtheAccounts
Completingthe
AccountingCycle

Chapter3
Chapter4

Accountingfor
Merchandising
Operations

Chapter5

Accountingfor
Merchandising
Operations
Inventories

Chapter5

Chapter6

10

Inventories
Chapter6
Fraud,InternalControl, Chapter7
andCash

11

12

Accountingfor
Receivables

Chapter8

Sameasabove
1. Explainthetimeperiodassumption.
2. Explaintheaccrualbasisofaccounting.
3. Explainthereasonsforadjustingentries.
4. Identifythemajortypesofadjustingentries.
5. Prepareadjustingentriesfordeferrals.
6. Prepareadjustingentriesforaccruals.
7. Describethenatureandpurposeofanadjustedtrialbalance.
(CLO112)
Sameasabove
1. Prepareaworksheet.
2. Explaintheprocessofclosingthebooks.
3. Describethecontentandpurposeofapostclosingtrialbalance.
4. Statetherequiredstepsintheaccountingcycle.
5. Explaintheapproachestopreparingcorrectingentries.
6. Identifythesectionsofaclassifiedstatementoffinancialposition.
(CLO112)

1. Identifythedifferencesbetweenserviceandmerchandisingcompanies.
2. Explaintherecordingofpurchasesunderaperpetualinventorysystem.
3. Explaintherecordingofsalesrevenuesunderaperpetualinventory
system.
4. Explainthestepsintheaccountingcycleforamerchandisingcompany.
5. Prepareanincomestatementforamerchandiser.
(CLO17)

Sameasabove

1. Describethestepsindetermininginventoryquantities.
2. Explaintheaccountingforinventoriesandapplytheinventorycostflow
methods.
3. Explainthefinancialeffectsoftheinventorycostflowassumptions.
4. Explainthelowerofcostornetrealizablevaluebasisofaccountingfor
inventories.
5. Indicatetheeffectsofinventoryerrorsonthefinancialstatements.
6. Computeandinterprettheinventoryturnoverratio.
(CLO17)
Sameasabove
1. Definefraudandinternalcontrol.
2. Identifytheprinciplesofinternalcontrolactivities.
3. Explaintheapplicationsofinternalcontrolprinciplestocashreceipts.
4. Explaintheapplicationsofinternalcontrolprinciplestocash
disbursements.
5. Describetheoperationofapettycashfund.
6. Indicatethecontrolfeaturesofabankaccount.
7. Prepareabankreconciliation.
8. Explainthereportingofcash
(CLO17)
1. Identifythedifferenttypesofreceivables.
2. Explainhowcompaniesrecognizeaccountsreceivable.

LahoreUniversityofManagementSciences

13
14

Accountingfor
Receivables
MidTerm
PlantAssets,Natural
Resourcesand
IntangibleAssets

Chapter8

PlantAssets,Natural
Resourcesand
IntangibleAssets
Liabilities

Chapter9

Chapter9

15

16

17

18

19

20

Liabilities
AccountingforSole
Proprietorsand
Partnerships
(Retirement,death,
dissolution,
liquidation.)

Corporations:
Organization,Share
Transactions,Dividend
andRetainedEarnings
(includingbranch

3. Distinguishbetweenthemethodsandbasescompaniesusetovalue
accountsreceivable.
4. Describetheentriestorecordthedispositionofaccountsreceivable.
5. Computethematuritydateofandinterestonnotesreceivable.
6. Explainhowcompaniesrecognizenotesreceivable.
7. Describehowcompanysvaluenotesreceivable.
8. Describetheentriestorecordthedispositionofnotesreceivable.
9. Explainthestatementpresentationandanalysisofreceivables.
(CLO112)
Sameasabove

1. Describehowthehistoricalcostprincipleappliestoplantassets.
2. Explaintheconceptofdepreciationandhowtocomputeit.
3. Distinguishbetweenrevenueandcapitalexpenditures,andexplainthe
entriesforeach.
4. Explainhowtoaccountforthedisposalofaplantasset.
5. Computeperiodicdepletionofextractablenaturalresources.
6. Explainthebasicissuesrelatedtoaccountingforintangibleassets.
7. Indicatehowplantassets,naturalresources,andintangibleassetsare
reported.
(CLO112)

Sameasabove

Chapter10 1. Explainacurrentliability,andidentifythemajortypesofcurrent
liabilities.
2. Describetheaccountingfornotespayable.
3. Explaintheaccountingforothercurrentliabilities.
4. Explainwhybondsareissued,andidentifythetypesofbonds.
5. Preparetheentriesfortheissuanceofbondsandinterestexpense.
6. Describetheentrieswhenbondsareredeemed.
7. Describetheaccountingforlongtermnotespayable.
8. Identifythemethodsforthepresentationandanalysisofnoncurrent
liabilities.
(CLO112)
Chapter10 Sameasabove
Chapter12 1. Identifythecharacteristicsofthepartnershipformofbusiness
organization.
2. Explaintheaccountingentriesfortheformationofapartnership.
3. Identifythebasesfordividingnetincomeornetloss.
4. Describetheformandcontentofpartnershipfinancialstatements.
5. Explaintheeffectsoftheentriestorecordtheliquidationofa
partnership.
(CLO8)
Chapter11 1. Identifythemajorcharacteristicsofacorporation.
2. Recordtheissuanceofordinaryshares.
3. Explaintheaccountingfortreasuryshares.
4. Differentiatepreferencesharesfromordinaryshares.
5. Preparetheentriesforcashdividendsandsharedividends.

LahoreUniversityofManagementSciences
accounting)

21

Corporations:
Organization,Share
Transactions,Dividend
andRetainedEarnings
(includingbranch
accounting)
StatementofCash
Flows

22

23
24

StatementofCash
Flows
StatementofCash
Flows
FinancialStatement
Analysis

25

26
27

28

FinancialStatement
Analysis
FinancialStatement
Analysis
Preparationof
FinancialStatements
fromIncomplete
Record

6. Identifytheitemsreportedinaretainedearningsstatement.
7. Prepareandanalyzeacomprehensiveequitysection.
(CLO19)
Chapter11 Sameasabove

Chapter13 1. Indicatetheusefulnessofthestatementofcashflows.
2. Distinguishamongoperating,investing,andfinancingactivities.
3. Prepareastatementofcashflowsusingtheindirectmethod.
4. Analyzethestatementofcashflows.
(CLO112)
Chapter13 1. Prepareastatementofcashflowsusingtheindirectmethod.
Chapter13 Sameasabove
Chapter14 1.
2.
3.
4.
5.

Discusstheneedforcomparativeanalysis.
Identifythetoolsoffinancialstatementanalysis.
Explainandapplyhorizontalanalysis.
Describeandapplyverticalanalysis.
Identifyandcomputeratiosusedinanalyzingafirmsliquidity,
profitability,andsolvency.
6. Understandtheconceptofearningpower,andhowdiscontinued
operationsarepresented.
7. Understandtheconceptofqualityofearnings.
(CLO112)
Chapter14 Sameasabove
Chapter14 Sameasabove
Tobe
provided

TEXTBOOK(S)/SUPPLEMENTARYREADINGS
FinancialAccounting,IFRSEdition:1stEdition
byJerryJ.Weygandt,PaulD.Kimmel,DonaldE.Kieso