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Accounting II

Course Text
Wild, John J., Kermit D. Larson, and Barbara Chiapetta. Fundamental Accounting Principles,
Volume 1, 18th edition. McGraw-Hill/Irwin, 2007. ISBN 0-07-328661-3.

Course Description
Accounting II expands on what the student learns in Accounting I by focusing on corporate
accounting. This course discusses how corporations are structured and formed with an
emphasis on corporate characteristics. Stocks, bonds, notes, purchase investments and
analysis of financial statements are included, as well as an in-depth look at managerial
accounting. Statements of cash flow, budgets, and budget management are also examined.

Course Objectives
After completing this course, students will be able to:

• Demonstrate knowledge of the accounting techniques used in corporations, including

accounting for stock transactions.
• Discuss the various types of corporate investments, differentiating between influential
and non-influential investments.
• Apply the tools of financial analysis to perform horizontal and vertical analysis.
• Calculate and interpret various financial ratios.
• Demonstrate knowledge of, and ability to prepare, a statement of cash flows.
• Define managerial accounting and understand the techniques used in cost accounting.
• Demonstrate the ability to prepare financial statements for a manufacturing company.
• Demonstrate knowledge of process cost accounting systems, including the use of
equivalent units of production.
• Use various allocation methods to allocate overhead and indirect costs.
• Compute break-even and cost-revenue analysis values and understand how to interpret
the results.
• Define a master budget and how it is used in a business.
• Discuss a flexible budget and the role of standard costs in the budgeting process.
• Describe a capital budget and discuss the role of the time value of money in the
budgeting process.

Course Prerequisites

You must have taken Accounting I or its equivalent to be eligible for enrollment in this course.

Course Evaluation Criteria

StraighterLine does not apply letter grades. Students earn a score as a percentage of 100%. A
passing percentage is 70% or higher.


If you have chosen a Partner College to award credit for this course, your final grade will be
based upon that college's grading scale. Only passing scores will be considered by Partner
Colleges for an award of credit.

There are a total of 916 points in the course.

Topic Assessment Points Available

1 Graded Quiz A 30
2 Graded Quiz B 25
3 Graded Quiz C 24
3 Graded Exam #1 150
4 Graded Quiz D 29
5 Graded Quiz E 29
7 Graded Quiz F 22
7 Graded Exam #2 150
8 Graded Quiz G 17
9 Graded Quiz H 21
10 Graded Quiz I 13
11 Graded Quiz J 29
11 Graded Exam #3 150
12 Graded Quiz K 18
13 Graded Quiz L 27
14 Graded Quiz M 32
14 Graded Exam #4 150

Course Topics and Objectives

Topic Lesson Topic Subtopics Objectives

1 Accounting for • Forming a Corporation • Define the term corporation and
Corporations • Types of Stock and explain how corporations are
Dividends structured and formed.
• Recording Stock • Differentiate between common stock,
Transactions preferred stock and treasury stock and
• Reporting Earnings and explain how dividends work.
Equity • Demonstrate the ability to record stock
• Describe the various procedures for
reporting earnings and equity.
2 Accounting for • Types of Bonds and • Explain the types of bonds and
Corporate Bonds Accounting for Dividends describe the procedures relating to
• Issuance of Bonds dividends.
• Bond Retirement • Demonstrate knowledge of bond
• Notes payable as a issuance procedures.
financing option • Discuss the bond retirement
• Describe the use of notes payable
as a financing option for corporations.
3 Corporate • Types and class of • Explain a corporation's motivation for
Investments investments purchasing investments.
• Accounting for non- • Demonstrate knowledge of the
influential investments accounting procedures for influential
• Influential investments investments.
• Describe the various types and classes
of investments.
• Discuss the procedures to account for
non-influential investments.
4 Corporate • Analysis Overview • Describe the purpose and basic tools of


Financial • Vertical Analysis financial statement analysis.
Statement • Horizontal Analysis • Demonstrate knowledge of vertical
Analysis • Ratio Analysis analysis.
• Explain vertical analysis procedures.
• Calculate financial statement ratios
including ratios on profit, liquidity, and
financial strength.
5 Statement of • Purpose and importance • Explain the importance and purpose of
Cash Flows of Statement of Cash a statement of cash flows.
Flows • Demonstrate the ability to prepare a
• Cash Flows from statement of cash flows.
Operations • Distinguish between cash flows from
• Cash Flows from operations, investments, and financing.
• Cash Flows from
6 Managerial • Purpose and Nature of • Explain the purpose and nature of
Accounting Managerial Accounting Managerial Accounting.
• Managerial Costs • Discuss managerial accounting
Concepts concepts, including cost classifications.
• Profit and Cost Centers • Describe the use of profit and cost
• Departmental Operations centers in managerial accounting.
and Income Statements • Demonstrate knowledge of
departmental accounting operations,
including preparation of departmental
financial statements.
7 Manufacturing • Cost of Goods • Explain the purpose and usefulness of
Accounting Manufactured Statement a statement of cost of goods
• Manufacturing Income manufactured.
Statement • Demonstrate the ability to prepare a
• Balance Sheet for manufacturing company's income
Manufacturing Company statement.
• Manufacturing Business's • Demonstrate the ability to prepare a
Accounting Cycle manufacturing company's balance
• Discuss the procedures involved in a
manufacturing company's accounting
8 Job Order • Process Cost Accounting • Define the term process cost
Accounting System accounting.
• Process Operations • Demonstrate knowledge of the process
• Accounting for Job operations of a company.
Orders • Explain the importance of process
• Equivalent Units of inventory in process cost accounting.
Production • Discuss the term equivalent units of
production and its role in process cost
9 Process Cost • Process Cost Accounting • Define the term process cost
Accounting System accounting.
• Process Operations • Demonstrate knowledge of the process
• Accounting for Job operations of a company.
Orders • Explain the importance of process
• Equivalent Units of inventory in process cost accounting.
Production • Discuss the term equivalent units of
production and its role in process cost
10 Cost Allocation • Allocating Overhead • Explain how overhead is allocated
Costs under the two-stage and activity-based
• Departmental Accounting allocation methods.
with Cost Allocation. • Demonstrate knowledge of how
• Allocating Indirect indirect expenses are allocated.


Expenses • Discuss departmental accounting with
• Responsibility Accounting allocation of expenses.
• Describe a responsibility accounting
system and the key components of
that system.
11 Cost Analysis • Cost Behaviors • Discuss various cost behaviors,
• Measuring Cost including fixed, variable and mixed
Behaviors costs.
• Break-Even Analysis • Explain the procedure for measuring
• Cost-Revenue Analysis cost behaviors.
• Cost-Volume-Profit • Describe the benefits of using a break-
Analysis even analysis.
• Demonstrate the ability to do cost-
volume-profit analysis.
• Discuss cost-revenue analysis.
12 Master Budgets • Budgeting Process • Describe the budgeting process.
• Administrative • Discuss the uses of budgets as a
Procedures Regarding management tool.
Budgets • Explain the purpose of a master
• Master Budgets budget.
• Demonstrate knowledge of budget
management procedures and
13 Flexible Budgets • Cost Behaviors in the • Discuss the cost behaviors of variable
and Standard Budgeting Process and fixed costs.
Costs • Fixed Budget • Explain the preparation of a fixed
• Standard Costs budget.
• Standard Costs as a • Describe the user of standard costs in
Management Tool the budgeting process.
• Flexible Budgets

14 Capital Budgets • Capital Budgeting • Define the term capital budget and
and Managerial Without Accounting for explain how capital budgets are used
Decisions Time Value of Money by managers.
• Capital Budgeting • Differentiate between a capital budget
Factoring in the Time that accounts for the time value of
Value of Money money and one that does not.
• Managerial Decision • Discuss how management uses
Making accounting information to make
15 Review • Accounting for Corporate • None
• Corporate Investments
• Corporate Financial
Statement Analysis
• Statement of Cash Flows
• Managerial Accounting
• Manufacturing
• Job Order Accounting
• Process Cost Accounting
• Cost Allocation
• Cost Analysis
• Master Budgets
• Flexible Budgets and
Standard Costs
• Capital Budgets and
Managerial Decisions