BIRLA INSTITUTE OF TECHNOLOGY & SCIENCE, PILANI

WORK INTEGRATED LEARNING PROGRAMMES

Digital Learning
Part A: Course Design
Course Title Financial and Management Accounting
Course No(s) MBA ZC415/PDFI ZC415
Content Author HEMA

Learning Outcomes
No At the end of the course, the student will be able to;

L01 Interpret, identify, classify elements of the financial accounting transactions and summarize it

L02 Construct classified Balance Sheet, Profit & Loss Account and Cash Flow Statements

L03 Measure, analyze, and evaluate the financial statements and business performance of a firm

L04 Understand behavior of cost and relationship between cost-volume-profits (CVP)

Course Objectives
No

C01 Demystify the components and elements of the financial statements.

C02 Learn to prepare financial statements from information and interpret transactions.

C03 Explain the tools and techniques of financial statement analysis.

C04 Examine the cost behavior and use of CVP for managerial decision making.

Text Book

T1 Financial Accounting – A Managerial Perspective, R. Narayanaswamy, PHI, 5 th edition, 2014.

T2 Accounting Text & Cases, Robert Anthony, David Hawkins, Kenneth Merchant, 13 th edition,
2013 (For select cases & Management Accounting)

Reference Book(s)

R1 P. C. Tulsian, Financial Accounting, Tata McGraw Hill, latest edition

R2 Financial Accounting: A Managerial Emphasis, Ashok Banerjee, Excel Books; 3rd Revised
edition, 2009
Study Modules and Learning Outcomes:
Modul Module Title Objectives Learning outcome (You should be able
e No to answer these questions after the
module)
1 Introduction to To understand importance of Is accounting mere a historic record of
Accounting financial and management transactions or can it create value for
accounting in business as a source business?
of value creation
2 Generally To understand underlying principles What is the philosophy behind record
Accepted of financial accounting keeping? Are there any guiding principles
Accounting for transaction recording?
Principles
(GAAP)
3 Journal To learn the process of recording How do they record every small business
business transactions in first book of transaction? Are there any rules? Is there
entry called ‘Journal’ a scientific method for recording
transactions?
4 Ledger To learn to classify transactions The transactions can differ in type and
recorded in Journal using ‘ledger nature. How do they account for that?
posting’ process

5 Trial balance To learn to prepare ‘trial balance It must be difficult to go through

statement’ (using records from
ledger) to get a summarize state of
business transactions
6 Final Accounts To learn the process of preparation
of ‘Profit and Loss Account’ and
‘Balance Sheet’ using summary of
accounts provided by trial balance
7 Cash flows To learn the process of preparation
statement of ‘Cash Flow Statement’ using data
supplied by ‘Income Statement’ and
‘Balance Sheet’
thousands of transaction records. Can one
just have a summary of transactions like a
bird’s eye view?
What is the result of all transactions that
took place during a year - profit or loss?
How much does the business own and
how much does it owe?
Are you saying profit earned does not
equal cash earned? How are these two
different? Does that mean there
transactions that do not involve cash?

8 Financial To learn to examine financial health How efficiently is business being run? Is
statement Analysis of business by converting data the financial position of business healthy
and Interpretations exhibited in ‘Income Statement’ and or critical? Is it headed for insolvency?
‘Balance Sheet’ into useful What areas need immediate attention?
information
9 Assessing Quality To learn to identify accounting red How to deal with accounting noise and
of Financial flags wherein there is scope of noise biases while analysing final health of an
Reporting and bias due to rigidity in organization (How to undo accounting
accounting rules distortions)?
10 Cost Accounting – To learn different cost concepts and Taking decisions on cost minimization
Measuring and objectives of cost accounting, versus revenue maximization, what is the
Analysing cost of analyse cost behaviour, identify cost of products and services? How to
products and various cost drivers and learn to take make or buy decisions,
Services prepare cost sheet.
11 Cost-volume- To learn to determine optimal scale What is the minimum scale of business
profit analysis of business operations for different that needs to be achieved before it starts
profit levels conditional to cost making profit? What scale needs to be
structure of a firm achieved to earn a target profit level?
 12 Marginal / To learn to make decisions from How to decide when faced with short-run
Differential alternative choices using alternative choices? What is marginal /
Costing management accounting differential cost?
information.

Content Structure

1. Introduction to Accounting

1.1. Why study accounting?

1.1.1. How valuable is the knowledge of financial accounting?
1.1.2. Types of business and information requirement
1.1.3. Financial accounting as an information system for stakeholders in business

1.2. What is accounting?

1.2.1. Definition of Accounting and accounting cycle
1.2.2. Introduction to Annual Accounting Statements

2. Generally Accepted Accounting Principles (GAAP)

2.1. Balance Sheet Principles

2.1.1. Money Measurement Concept
2.1.2. Business Entity Concept
2.1.3. Going Concern Concept
2.1.4. Cost Concept
2.1.5. Dual Aspect Concept

2.2. Income Statement concepts

2.2.1. Accounting Period Concept
2.2.2. Conservatism Concept
2.2.3. Realization Concept
2.2.4. Matching Concept
2.2.5. Consistency Concept
2.2.6. Materiality Concept

2.3. Accounting Equation

3. Journal

3.1. What is journal?

3.1.1. Meaning and format of Journal
3.1.2. Nature of business transactions

3.2. Rules of debit and credit

3.2.1. What is debit and credit
3.2.2. Rules of debit and credit for types of accounts using accounting equation
3.2.3. Double entry system
3.2.4. Practice questions – recording transactions in Journal

4. Ledger Posting

4.1. Meaning and format of account – T accounts

4.2. How to post journal entries into ledger?

 4.2.1. Posting Journal entries into Ledgers
4.2.2. Balancing of accounts and rules

5. Trial Balance

5.1. Format of trial balance

5.2. Preparation of trial balance
5.3. Errors in preparation of trial balance
5.4.
6. Final Accounts

6.1. Preparation of final accounts

6.1.1. Components of final accounts
6.1.2. Format and preparation of Income Statement & Balance Sheet

6.2. Adjustments for Transactions after closing of accounts

6.2.1. Outstanding or accrued expenses
6.2.2. Prepaid Expenses
6.2.3. Fixed asset purchase/sale, Depreciation and profit/loss on sale of fixed assets
6.2.4. Bad debts, provision for bad and doubtful debts
6.2.5. Income received in advance
6.2.6. Provision of taxation, dividends

7. Cash flow statement

7.1. Introduction to Cash flow statement

7.1.1. Need for cash flow statement
7.1.2. Types of cash flows
7.1.3. Format of Cash flow statement

7.2. Calculation of cash from operating activities

7.2.1. Why accounting profit is not cash profit
7.2.2. How to calculate operating cash profit from accounting profit
7.2.3. Format - Calculation of cash from operating activities
7.2.4. Example problem -calculating cash flows from operating activities

7.3. Calculation of cash from investing activities

7.3.1. Format - Calculation of cash from investing activities & Example problem

7.4. Calculation of cash from financing activities

7.4.1. Format - Calculation of cash from financing activities & Example

7.5. Practice problems

7.5.1. Preparing CFS without additional information
7.5.2. Preparing CFS with additional information

8. Ratio Analysis

8.1. Introduction to Ratio Analysis

8.1.1. Introduction to financial ratio analysis
8.1.2. Meaning and classification of ratios

8.2. Liquidity ratios

8.2.1. About liquidity ratios
8.2.2. Current ratio
8.2.3. Liquid ratio
8.2.4. Absolute liquid ratio
 8.3. Solvency ratios
8.3.1. About solvency ratios
8.3.2. Debt-equity ratio
8.3.3. Proprietary ratio
8.3.4. Gearing ratio
8.3.5. Interest coverage ratio

8.4. Profitability ratios

8.4.1. Gross profit ratio, Operating ratio, operating profit ratio, net profit ratio, Calculation
of above ratios
8.4.2. ROI, ROCE, EPS, DPR, DYR, PER

8.5. Turnover ratios

8.5.1. Introduction to turnover ratios
8.5.2. STR
8.5.3. DTR and ACP
8.5.4. CTR and APP
8.5.5. Working capital turnover ratio
8.5.6. Fixed asset turnover ratio

8.6. Practice problems

8.6.1. Calculation of the above ratios
8.6.2. Preparation of Financial Statement using Ratios

9. Assessing Quality of Financial Reporting

9.1 Cost and benefits of Generally Accepted Accounting Principles (GAAP)
9.2 Factors influencing accounting reporting quality
9.3 Evaluating Accounting Strategies
9.4. Accounting Red Flags

10. Cost Accounting – Measuring and Analyzing cost of products and Services

10.1 What is cost and Why Cost Accounting

10.2 Types and behavior of various cost
10.3 Scope of cost accounting
10.4 Advantages of cost accounting
10.5 Cost Pyramid symptoms
10.6 Preparation of cost sheet

11. Cost volume profit analysis

11.1 Introduction to Cost Volume Profit Analysis

11.2 Need for CVP analysis
11.3 Algebra of CVP analysis
11.4 Graphical representation
11.5 Practice questions

12. Marginal/ Differential Cost

12.1 Introduction to marginal/ differential costs
12.2 Alternative Choice problems

Experiential Learning Components (ELC):

This course will feature experiential learning components in the form of projects / assignments. ELC
is designed to enable the participants to learn by doing. This will also form part of the Evaluation
Components for the course.
 Part B: Contact Session Plan
Academic Term First Semester 2022-2023
Course Title Financial and Management Accounting
Course No MBA ZC415/PDFI ZC415
Content Developer HEMA

Glossary of Terms:
1. There would be a total of 16 sessions of 2 contact hours each.
2. Contact Hour (CH) stands for an hour-long live session with students conducted either in a physical
classroom or enabled through technology.
a. Pre CH = Self Learning done prior to a given contact hour
b. During CH = Content to be discussed during the contact hour by the course instructor
c. Post CH = Self Learning done post the contact hour
3. RL stands for Recorded Lecture or Recorded Lesson. It is presented to the student through an online
portal. A given RL unfolds as a sequences of video segments interleaved with exercises

Session 1 - 2
Time Type Sequence Content Reference

Pre CH RL 1.1, 1.2 Refer Courseware

During CH CH1  Forms of business and accounting Chapter 1 -T1

implications
 Elements of accounting
 Introduction to GAAP
 Principles of Balance sheet and Concepts
of Income Statement

Session 3 - 4
Time Type Sequence Content Reference

Pre CH RL 2.1, 2.2, 3.1 Refer Courseware

During CH CH2 / 3  Format of Balance sheet Chapter 2 – T1

 Introduction to Journal
 Journalizing the transactions

Session 5-6
Time Type Sequence Content Reference

Pre CH RL 3.2, 3.3, 4, 5.1 Refer Courseware

During CH CH 3/  Ledger format and Posting of transactions Chapter 2 & 3- T1/T2

4 /5  Trial Balance

Session 7-8
Time Type Sequence Content Reference

Pre CH RL 5.5, 5.3, 6.1, 6.2 Refer Courseware

During CH CH 5 / 6 Trial Balance, Final Accounts Chapter 4 / T1

Session 9 -10
Time Type Sequence Content Reference

Pre CH RL 8.1, 8.2, 8.3, 8.4, 8.5 Refer courseware

During CH CH7 Cash Flow statements Chapter 13 – T1

Session 11-12
Time Type Sequence Content Reference

Pre CH None 7.1, 7.2, 7.3, 7.4, 7.5 Refer Courseware

During CH CH8 Ratio Analysis Chapter 12 – T1

Session 13
Time Type Sequence Content Reference

Pre CH RL None None

During CH CH9 Assessing Quality of Financial Reporting Chapter 15 – T1

Session 14
Time Type Sequence Content Reference

Pre CH RL None None

During CH CH 10 Cost Accounting Chapter 16- T2

Session 15
Time Type Sequence Content Reference

Pre CH RL None None

During CH CH11 CV P Analysis Chapter 16 – T2

Session 16
Time Type Sequence Content Reference

Pre CH RL None None

During CH CH 12 Marginal Cost / Differential Cost Chapter 26 – T2

Evaluation Scheme:

Legend: EC = Evaluation Component; AN = After Noon Session; FN = Fore Noon Session

No Name Type Duration Weight Day, Date, Session, Time

EC-1 Quiz 1 Online - 5% August 16-30, 2022
EC-1 Quiz 2 Online - 5% September 16-30, 2022
EC-1 Experiential Learning (EL) Online - 15% September 16-30, 2022
EC-2 Mid-Semester Test Open Book 2 hours 30% Sunday, 25/09/2022 (FN)
EC-3 Comprehensive Exam Open Book 2 hours 45% Sunday, 27/11/2022 (FN)

Syllabus for Mid-Semester Test (Open Book): Session Nos 1 to 8.

Syllabus for Comprehensive Exam (Open Book): All topics (Session Nos. 1 to 16)

Important links and information:

Elearn portal: https://elearn.bits-pilani.ac.in

Students are expected to visit the Elearn portal on a regular basis and stay up to date with the latest
announcements and deadlines.

Contact sessions: Students should attend the online lectures as per the schedule provided on the Elearn
portal.

Evaluation Guidelines:

1. EC-1 consists of Quizzes & EL

Quiz 1 & 2 - Students will attempt them through the course pages on the Elearn portal. Announcements
will be made on the portal, in a timely manner
EL-1 is the experiential leaning component for which a project will be assigned to you. You will have
submission towards the end of the course. Dates will be announced on the portal.
2. For Closed Book tests: No books or reference material of any kind will be permitted.
3. For Open Book exams: Use of books and any printed / written reference material (filed or bound) is
permitted. However, loose sheets of paper will not be allowed. Use of calculators is permitted in all
exams. Laptops/Mobiles of any kind are not allowed. Exchange of any material is not allowed.
4. If a student is unable to appear for the Regular Test/Exam due to genuine exigencies, the student should
follow the procedure to apply for the Make-Up Test/Exam which will be made available on the Elearn
portal. The Make-Up Test/Exam will be conducted only at selected exam centres on the dates to be
announced later.

It shall be the responsibility of the individual student to be regular in maintaining the self-study schedule as
given in the course handout, attend the online lectures, and take all the prescribed evaluation components
such as Assignment/Quiz, Mid-Semester Test and Comprehensive Exam according to the evaluation scheme
provided in the handout.