LahoreUniversityofManagementSciences

ACCT100PrinciplesofFinancialAccounting
FallSemester2015

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

AyeshaBhatti/SyedZainUlAbidin/MuhammadBasharullah
409
byappointment
ayesha.bhatti@lums.edu.pk ,bashar@lums.edu.pk; syed.zain@lums.edu.pk
8087,8080,5326
TBA
TBA
Suraj.lums.edu.pk

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
Electiveforallothermajors
Freshmen(ACFmajorsonly)

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
focusesonunderstandinghoweconomiceventssuchasoperatingactivities,corporateinvestments,andfinancingtransactionsare
recordedinthethreemainfinancialstatements(i.e.,theincomestatement,balancesheet,andstatementofcashflows).Themain
emphasisofthiscourseisplacedonthebasicframeworkofaccountingsoastoprovidethestudentwithanunderstandingofthe
fundamental accounting principles and concepts. A heavy reliance will be placed on problem solving and practical analyses 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
financialliteracy.Therearenoacademicprerequisitesforthecourse.Althoughwewillworkwithnumbersinthecourse,theonly
requiredmathknowledgeisaddition,subtraction,multiplication,anddivision.

LahoreUniversityofManagementSciences
COURSELEARNINGOBJECTIVES(CLO)
ThiscoursewillintroduceyoutothekeyconceptsofAccounting.You willlearntopreparefinancialstatementsandwillalsobe
equippedtoanalyzethem.Aftertakingthiscourse,youwillbeableto:
1. Describe the nature, uses and purposes of financial accounting, and outline both the conceptual and regulatory
frameworksthatgovernthepreparationandreportingoffinancialinformation
2. Explaintheaccountingequationanditslinkwithfinancialstatements,andillustratetheimpactofeconomictransactions
ontheaccountingequation
3. Describethekeyconceptsandconventionsthatunderliefinancialaccounting
4. Describe and apply the transactions recording process from source documents to financial statements via the books of
primeentry,ledgersandtrialbalance
5. Explainthenatureandpurposesofcontrolaccountsandapplyappropriatecorrectingtechniquesforerrorsandomissions
6. Explainandapplytherecognitionandmeasurementprinciplesrelatingto:noncurrentliabilitiesandequity,noncurrent
assets (including depreciation and amortization), inventories (and cost of sales) and other current assets and liabilities
(includingreceivablesandbaddebts,prepaymentsandaccruals,etc.)
7. Explain the characteristics of a sole proprietor visvis a company; and prepare financial statements for both forms of
entities
8. Explainthecharacteristicsofapartnership,preparefinancialinformationforapartnershipincludingtheadmissionofa
partnerandthedissolutionofapartnership
9. Applyaccountingprinciples,conceptsandconventionsinpracticalsituations
10. Demonstratebasicproblemsolvingskills
11. Demonstrateanabilitytoundertakeindependentstudyandtomanagetime
12. 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,designandapplyappropriatedecisionsupporttools,
interpretresultsandmakemeaningfulrecommendationstosupportthedecisionmaker

LahoreUniversityofManagementSciences
Indicatebelowhowthecourselearningobjectivesspecificallyrelatetoanyprogramlearninggoalsandobjectives.

ProgramLearningGoalsand
Objectives

CourseLearningObjectives

CourseAssessmentItem

Goal1EffectiveWrittenandOral
Communication

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

Classroomdiscussions

Goal2EthicalUnderstandingand
Reasoning

Goal3AnalyticalThinkingandProblem
SolvingSkills

Goal4ApplicationofInformation
Technology
Goal5TeamworkinDiverseand
MulticulturalEnvironments

Goal6UnderstandingOrganizational
Ecosystems

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

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

Classroomdiscussions,Quizzes,
Assignments,andExams

Classroomdiscussions,Quizzes,
Assignments,andExams

Classroomdiscussions,Quizzes,
Assignments,andExams

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

GRADINGBREAKUPANDPOLICY

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

10%
30%
10%
20%
30%

Pleasenotethatnoquizwillbedropped.Underextenuatingcircumstances,foramissedquiz,themeanoftheclassinthemissed
quizorthemeanofthestudentsotherquizzes,whicheverislowerwillbepostedforonlyonemissedquiz.Quizzesarenormally
givenatthebeginningofasession,youareexpectedtobeinyourseats5minutesbeforeeachclasssession,latewalkinsonaquiz

LahoreUniversityofManagementSciences
daydisturbthewholeclassandwillnotbeallowedtotakethequiz.

Studentswithlessthan50%marksoverall,willreceiveanFgrade.However,thiswillnotaffectgradesofotherstudents.The
remainingstudentswillbeawardedgradestheywouldbeotherwiseentitledto.

Ifyoumissmorethanseven(7)classes,youwillautomaticallygetanFgradeinthecourse.Iexpectyoutobepunctualandbein
yourseatbeforetheclassstarts.Latewalkinwillbecountedasanonattendanceandwillloweryourattendancegrade.

EXAMINATIONDETAIL
Midterm
Exam

FinalExam

Yes/No:Yes
Combine/Separate:Combine
Duration:2hours
PreferredDate:MidtermWeek
ExamSpecifications:MCQFormat.Closedbooks,closednotes,youmaybringcalculator.Youwillnotbeallowedto
useyourcellphoneasacalculatororborrowcalculatorfromsomeoneinclass
Yes/No:Yes
Combine/Separate:Combine
Duration:2hours
PreferredDate:FinalExamweek
ExamSpecifications:MCQFormat.Closedbooks,closednotes,youmaybringcalculator.Youwillnotbeallowedto
useyourcellphoneasacalculatororborrowcalculatorfromsomeoneinclass

COURSEOVERVIEW

SessionTopic
Session

Reading
Material

AccountinginAction

Chapter1

TheRecordingProcess

Chapter2

TheRecordingProcess

Chapter2

SessionOutcome(s)
(Aftercompletingthissession,youshouldbeableto)
1. Explainwhataccountingis.
2. Identifytheusersandusesofaccounting.
3. Understandwhyethicsisafundamentalbusinessconcept.
4. Explainaccountingstandardsandthemeasurementprinciples.
5. Explainthemonetaryunitassumptionandtheeconomicentity
assumption.
6. Statetheaccountingequation,anddefineitscomponents.
7. Analyzetheeffectsofbusinesstransactionsontheaccountingequation.
8. Understandthefourfinancialstatementsandhowtheyareprepared.
(CLO17)

1. Explainwhatanaccountisand howithelpsintherecordingprocess.
2. Definedebitsandcreditsandexplaintheiruseinrecordingbusiness
transactions.
3. Identifythebasicstepsintherecordingprocess.
4. Explainwhatajournalisandhowithelpsintherecordingprocess.
5. Explainwhataledgerisandhowithelpsintherecordingprocess.
6. Explainwhatpostingisandhowithelpsintherecordingprocess.
7. Prepareatrialbalanceandexplainitspurposes.
(CLO17)

Sameasabove

LahoreUniversityofManagementSciences
AdjustingtheAccounts

Chapter3

AdjustingtheAccounts
Completingthe
AccountingCycle

Chapter3
Chapter4

Accountingfor
Merchandising
Operations

Chapter5

Accountingfor
Merchandising
Operations
Inventories

Chapter5

Chapter6

10

11

Inventories
Fraud,InternalControl,
andCash

Chapter6
Chapter7

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)

LahoreUniversityofManagementSciences
Accountingfor
Receivables

Chapter8

Accountingfor
Receivables
PlantAssets,Natural
ResourcesandIntangible
Assets

Chapter8

PlantAssets,Natural
ResourcesandIntangible
Assets
MidTerm
Liabilities

Chapter9

12

13

Chapter9

14

15
16

17

18

19

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

1. Identifythedifferenttypesofreceivables.
2. Explainhowcompaniesrecognizeaccountsreceivable.
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)

LahoreUniversityofManagementSciences

20

21

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

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

22

23
24

StatementofCashFlows
StatementofCashFlows
FinancialStatement
Analysis

25

26
27
28

FinancialStatement
Analysis
FinancialStatement
Analysis
PreparationofFinancial
Statementsfrom
IncompleteRecord

Chapter11 1. Identifythemajorcharacteristicsofacorporation.
2. Recordtheissuanceofordinaryshares.
3. Explaintheaccountingfortreasuryshares.
4. Differentiatepreferencesharesfromordinaryshares.
5. Preparetheentriesforcashdividendsandsharedividends.
6. Identifytheitemsreportedinaretainedearningsstatement.
7. Prepareandanalyzeacomprehensiveequitysection.
(CLO19)
Chapter11 Sameasabove

Chapter13 1. Indicatetheusefulnessofthestatementofcashflows.
2. Distinguishamongoperating,investing,andfinancingactivities.
3. Prepareastatementofcashflowsusingtheindirectmethod.
4. Analyzethestatementofcashflows.
(CLO112)
Chapter13 1. Prepareastatementofcashflowsusingthedirectmethod.
Chapter13 Sameasabove
Chapter14 1. Discusstheneedforcomparativeanalysis.
2. Identifythetoolsoffinancialstatementanalysis.
3. Explainandapplyhorizontalanalysis.
4. Describeandapplyverticalanalysis.
5. 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