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University of Texas at Dallas

AIM 2301 – Introduction to Financial Accounting

Summer 2005

Tai-Yuan (Ted) Chen
Office: SOM 4.429
Phone: 972-883-4434
Office Hours: Wednesday & Thursday 16:00 – 17:00 or by appointment

І. Course Description and Objectives

This introductory accounting course assumes no prior academic knowledge of accounting. The purpose
of this course is to introduce you to the concepts of financial accounting and its underlying
assumptions. We will discuss the uses and limitations of financial statements. The emphasis of the
class is on using accounting information in the evaluation of business performance and risk.
The presentation will consist of moderately technical expositions of concepts and material, however,
the primary focus will be that of the user, rather than the preparer of accounting information.
Throughout the course we will illustrate applications of accounting principles with real examples.

И. Course Materials
1. Financial Accounting-The Impact on Decision Makers (The Alternatives to Debits and
Credits) 4th Edition by Porter and Norton. Any associated study guides are optional.
2. Lecture notes on Webct (
Webct: Please log in to the Webct with your UTD username and password. Once you log in, you will
find the homepage of this course. The site of this course will include lecture notes, class handouts,
course information, and important announcements.
Note: The School of management prohibits the distribution of handouts in class. It’s your
responsibility to print out the notes and bring them to the class.

Ш. How to success in this class

Success in learning accounting requires that you adapt to a different way of learning – active learning.
Active learning involves at least three steps. The first step is being prepared. You are encouraged to
preview the assigned chapter and to do simple exercises before class. The second step is after-class
generalization/synthesis. It’s critical to reflect on the class materials after class to generalize/synthesize
from your current class materials and to integrate with prior class materials. The third step is practicing.
It’s beneficial and essential for you to practically do some exercise after each class. For this purpose, I
will assign some exercises and problems in each chapter of the textbook for you to practice what you
learn in the class. However, you’re also strongly encouraged to solve extra exercises and problems.
You are welcome to stop by my office to check the solutions and discuss them with me. In-class
exercises will be given during the last 30 minutes of each lecture, and we will discuss them together.
ІV. Policies on Grading
There are two exams for this course. To make sure you understand the material covered in the lecture,
we will have 6 quizzes in the whole semester. The quiz question will be based on the assigned
exercises and be held 15 minutes at the beginning of class. The highest 5 quiz scores will be used to
determine your course grades.
The overall course grade will be assigned using the following weights:

5 quizzes 15 %
First Exam 35%
Final Exam 45%
Class Participation 5%
Total 100%
Tentative Topic Class Assignment
1. Introduction and overview of Financial Read: Chapter 1 and Chapter 2
1 5/19 2. Balance Sheet
-Terminology and Classifications
- Accounting equation and transactions
1. Income Statement Read: Chapter 4
-Revenue and Expense recognition Case: (1) Continental Airline
-matching principle (2) Costco
2 5/26 -accrual accounting
2. Adjusting Entries
3. Relationship of I/S and B/S
- dividends and retained earnings
1. Intangible Assets Read: pp 364-369 and pp 615-622, 626-627
2. Delaying Expense Recognition Case: (1) AOL
3 6/2 - Advertising and R&D
- expensing versus capitalization
3. Basic financial ratios
1. Current Assets Read: Chapter 6, Chapter 7, and Chapter 8
- Accounts Receivable Case: (1) Boston Chicken
- Notes Receivable
4 6/9 2. Inventory
- Periodic vs. Perpetual Shrinkage
1. Non-current Assets Read: Chapter 8 and Chapter 9
- Depreciation Case: (1) Waste Management
- Asset Disposals and Gains/Losses
5 6/16
2. Current Liability
- Items
3. Review for Midterm

6 6/23 First Exam

1. Bonds Read: Chapter 10
- Present and Future Value of Money Case: (1) Transaction System Architects
- Introduction: Coupon, Interest Rates
7 6/30 - Interest Expense
- Example
2. Leases
- Classification of Capital vs. Operating
1. Leases Read: Chapter 11
- Computation of Leasehold Expenses
- Effects on Balance Sheet
8 7/7 2. Owners Equity
- Common, Preferred, and Treasury Stock
1. The Statement of Cash Flow Read: Chapter 12
9 7/14 - Bankruptcy Case: (1) American Airline
- Constructing the Statement of Cash Flow
1. Financial Statement Analysis Read: Chapter 13
10 7/21 2. Review for Final Exam Case: (1) Airline Industry

11 7/28 Final Exam