The Hong Kong University of Science & Technology

Department of Accounting

ACCT2010 – Introduction to Financial Accounting

Course Outline – L10, L11, L12, Fall 2015

Instructor Dr. Charles Hsu

Instructor’s Contact E-mail achsu@ust.hk, LSK6010,
Lecture Time & Venue Mon. 01:30PM-02:50PM & Fri. 09:00AM-10:20AM (L10), 2302
Mon. 03:00PM-04:20PM & Fri. 10:30AM-11:50AM (L12), 2302
Mon. 04:30PM-05:50PM & Fri. 12:00PM-01:20PM (L11), 2302
Teaching Assistant Mr. SHEN, Jianghua, E-email jshen@ust.hk, LSK4017
Office Hours By appointment
Course Website http://canvas.ust.hk

I. Course Objectives

Accounting is the language of business. In this course you will learn how to "speak" and "read"
this new language. The course is designed to provide an overview of financial accounting so that,
upon completion of the course, you will be able to read, interpret and analyze corporate financial
reports. In particular, you should:

1. Develop a comprehensive and well-founded knowledge of financial accounting, including

a. Understand the accounting categories: assets, liabilities, equity, revenues and expenses;
b. Understand how an accounting system keeps track of information;
c. Understand how generally accepted accounting principles (GAAP) influence what is
recorded in the books of an entity;
d. Prepare a balance sheet, income statement and cash flow statement;
e. Read, interpret and analyse a set of financial statements.

2. Understand the role of financial accounting in the decision-making process of business

organizations. Apply financial accounting frameworks to business situations. For example,
students should understand the importance of financial statements for external users (e.g.,
creditors and investors) and how the numbers reported in those financial statements might
affect external users’ decision making.

3. Be able to form critical judgment covering an ability to identify and define accounting and
business problems, apply analytical and quantitative techniques, make and justify decisions;

4. Be effective in communication through collection, analysis and organization of information

and ideas;

5. Demonstrate teamwork, independence and creativity including working, learning and problem
solving as a team and independently;

6. Understand the responsibility of accountants and managers to ensure the integrity of financial
information and identify ethical challenges in accounting.

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II. Course Materials

(1) Short, Libby, and Libby. Financial Accounting, 8th edition, McGraw-Hill/Irwin. (Required)

(2) Lecture notes: to be posted on the course website (by chapter).

(Bring hard copy of lecture notes to the class)

III. Grading Scheme

Attendance and Participation 15

In-class Group Exercises 30
Cases 20
Three Mini Exams @ 40 points each 120
Final Examination ( cumulative) 115
TOTAL POINTS 300
Note: There will be no extra credit assignments under any circumstance.

IV. Conduct of This Course

1. Attendance and Participation. Students are required to attend all classes and arrive on time.
Students are strongly encouraged to participate in discussions during classes. It is the spirit of
participation that is valued, and students are not penalized for saying something incorrect. On the
other hand, talking among students and other behavior that can cause disturbances to the class are
not permitted.
Your attendance and participation points will depend upon the following:
• Attend and arrive in classes on time and remain in class until it is finished
• Volunteer answers and explanations to problems discussed in class; your answers need
not be correct but should be explained clearly.
• Ask thoughtful questions that further the discussion; it is the quality, not the quantity, of
questions that will affect your score.
• Pay attention to the class discussion; respond well to cold-call questions.

All phones and other electronic devices (including a personal computer) are turned off.
2. In-class group exercises. There are a series of group exercises to be completed in class. 12 of
them will be collected and students are required to submit answers in groups of two students.
Each group exercise is worth 3 points and the maximum total group exercise score is 30 (i.e., a
maximum of two absences will be excused). No make-ups for additional absence(s) are given for
group exercises missed by a student under any circumstances. If your group-mate is absent
from the exercise, please do not include his/her identity on the answer sheet.
3. Practice/HW problems. Solving problems is the best way of mastering the material covered in
class. I encourage you to solve at least the recommended problems (see Appendix I) but will not
collect them. You are also encouraged to do additional practice while preparing for the
examinations. The full set of solutions to all problems at the end of each chapter will be posted on
the course website when the chapter is done.
4. Cases. There are two cases and you are required to submit a written report by group for each case
at the beginning of the class on the due day. Each Case is expected to be completed in groups
of two students. The grade will be common to each student in the group. The content and due
date of the project will be announced in class. More instructions will be given later.

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5. Mini Exams. Three mini exams will be given during the semester. It is expected that all students
will take these exams at the scheduled time.
6. Final Examinations. It is expected that all students will take the final exam at the scheduled time.
The final examination is cumulative; that is, it will include topics covered in the mini exams.
7. Course Schedule. The course schedule is given in Appendix II (the last page). Changes to the
course schedule may be made, if necessary. It is the responsibility of the students to download
the lecture notes from the course website and bring them to class before the start of each chapter.
It is also your responsibility to find out what has been announced during your absence from
the class. The topics which are denoted as "Skip" will not appear in the examinations and will
not be covered in the class.
8. Academic honesty. It is important that students follow university regulations on academic
integrity and honesty. Academic dishonesty will not be tolerated and will be dealt with in
accordance with university rules, which can be accessed at http://www.ust.hk/vpaao/integrity.

V. Getting Help and Staying in Touch

Course-related information can be found at the course website (http://canvas.ust.hk). Students are
advised to schedule meeting with the instructor or the TA by making an appointment. Students may
also ask general (non-technical) questions by e-mail. For issues of general interest, I reserve the right
to forward your e-mail to other students for discussion purposes. Your identity, however, will be
disguised if the matters are sensitive.

Appendix I: Practice/HW Problems

(From the Textbook: Financial Accounting, Short, Libby, and Libby, 8th edition, McGraw-Hill)

Chapter Homework
1 E1-4,8,9,12; P1-2,4
2 E2-5,8,9,12,16; P2-1,2,5; CP2-6
3 E3-3,4,10,13,14,17; P3-2,4
4 E4-6,8,12,17; P4-1,2,3; COMP4-2
6 E6-3,6,10,14,16,18; P6-1,2,3,4; CP6-4
7 E7-1,3,4, 6 (skip LIFO),12,18; P7-1, 9; CP7-7
8 E8-4,5,6,7,14,18,21,23; P8-1,3,6,10,11
9 E9-1,9,14,15,18; P9-4,7,11; CP9-7
10 E10-3,6,8,14,21; P10-1,7,10,12
11 E11-3,4,6,8,15,18; P11-1,2,5,10; CP11-5
12 E12-3,6,7,10,12,13,15; P13-1,2; CP13-1

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 Appendix II: Course Schedule
(Subject to Change)

Ch.
Week Date Topic
No.
1 Sep. 4 Introduction
2 Sep. 7 1 Overview of corporate financial reporting
Sep. 11 1 Overview of corporate financial reporting
3 Sep. 14 2 Transaction analysis and the balance sheet
Sep. 18 2 Transaction analysis and the balance sheet
4 Sep. 21 3 Revenue and expense recognition and the income statement
Sep. 25 3 Revenue and expense recognition and the income statement
5 Oct. 2 Mini Exam 1 (Ch. 1-3), 7pm-7:50pm, LTA; no regular class
6 Oct. 5 4 Adjustments, financial statements, and the closing process
Oct. 9 4 Adjustments, financial statements, and the closing process
7 Oct. 12 6 Sales revenue and receivables
Oct. 16 6 Case 1 Due; Sales revenue and receivables (Skip pp.294-298)
8 Oct. 19 7 Cost of goods sold and inventory (Skip LIFO)
Oct. 23 7 Cost of goods sold and inventory (Skip pp 345-346 & Supp. A)
9 Oct. 26 Mini Exam 2 (Ch. 4, 6, 7), 7pm-7:50pm, LTA; no regular class
Oct. 30 8 Plant assets and intangibles
10 Nov. 2 8 Plant assets and intangibles
Nov. 6 9 Reporting and interpreting liabilities
11 Nov. 9 10 Bonds and long-term debts
Nov. 13 10 Bonds and long-term debts (Skip Supplements)
12 Nov. 16 Mini Exam 3 (Ch. 8-10), 7pm-7:50pm, LTA; no regular class
Nov. 20 11 Owners’ equity
13 Nov. 23 11 Owners’ equity (Skip Supplement)
Nov. 27 12 Statement of cash flows
14 Nov. 30 12 Case 2 Due; Statement of cash flows (Skip Supplement A)
Dec. Final Exam (cumulative), to be announced