Department Accounting & Finance

program BA degree in Accounting & Finance

Module Title Basics of Accounting and Reporting

Module code ACFN-M2010

Course Number AcFn2012
Course Title Fundamentals of Accounting II
ETCTS Credits 6
Contact Hours (per 4
week)
The course has the general objective of introducing students to the accounting basics of
recognizing, measuring, and reporting common balance sheet items.
Course Objectives & Upon the successful completion of this course, the students will be expected to:
Competences to be  Analyze and record payroll transactions in Ethiopian context.
Acquired  Utilize and identify the implication of the various methods of valuation in respect
to accounts and notes receivable, inventories, depreciation, tangible and intangible
assets, and natural resources.
 Analyze, record and report transactions for businesses organized as partnerships,
private limited companies, and share companies

Course Description This course is a continuation of Principles of Accounting I. The course is designed to
introduce students to the application of accounting principles and concepts to major balance
sheet items. The specific topics includes internal control over cash, accounting for
receivables, accounting for inventories, accounting for current liabilities, accounting for
plant asset, natural resources and intangibles and accounting for businesses organized as
partnerships and companies as per Ethiopian Commercial Code.

WEEKS Course Contents Reading

3 WEEKS 1. Inventories
{1ST,2ND&3RD } 1.1. Nature and definition of inventories
1.2. Internal control of inventories
1.3. The effect of inventory errors on the financial statements
1.4. Inventory cost flow assumptions
1.5. Inventory costing methods under a perpetual and periodic
inventory system
1.6. Valuation of inventory at other than cost (LCNRV)
1.7. Estimating inventory costs
1.8. Presentation of merchandise inventory in the financial
statements
3 WEEKS 2. Property, Plant & equipment, Intangible Assets and Natural
{ 4TH ,5TH& 6TH } Resources
2.1. Property, plant & Equipment
i. Nature of PPE
ii. Cost of PPE(Measurement at the time of recognition)
iii. Measurement after recognition
a. Depreciation of PPE
b. Capital expenditures and revenue expenditures
iv. Disposal(Derecognition) of PPE
 v. Internal controls of plant assets
vi. Presentation of PPE on the balance sheet
2.2. Intangible Assets
i.Nature and classification of Intangible assets
ii.Recognition and measurement at the time of acquisition.
iii.Measurement after acquisition.
iv.Presentation of intangible assets on the balance sheet
2.3. Natural resources
i. Nature of natural recourses
ii. Recognition and measurement
iii. Presentation of natural resources on the balance
sheet
1 WEEK 3. Current Liabilities
{ 7TH} 3.1. The nature of liabilities
3.2. Classification of liabilities
3.3. Types of current liabilities
3.4. Short-term notes payable
3.5. Presentation of current liabilities on the balance sheet

2 WEEK 4. Ethiopian Payroll System

{ 8THand 9TH} 4.1. Overview of Ethiopian labor laws
4.2. Overview of Ethiopian pension laws
4.3. Overview of Ethiopian employment income tax
4.4. Salary, allowances, and fringe benefits
4.5. Overtime payments
4.6. Types of leaves and termination benefits
4.7. Components of payroll sheet
4.8. Payroll-related journal entries

2 WEEKS 5. Accounting for Partnerships in Ethiopia

{10TH&11TH } 5.1. Type and basic characteristics of partnership
5.2. Formation of partnerships
5.3. Equity reporting for partnerships
5.4. Dividing partnership net income and net loss
5.5. Admission of new partners
5.6. Withdrawal or death of partners
5.7. Liquidating partnerships

3 WEEKS 6. Accounting for Companies in Ethiopia

6.1. Type and basic characteristics of companies in Ethiopia
{12TH, 13TH, 14TH } 6.2. PLCs
6.2.1. Formation of PLC
6.2.2. Management of PLC
6.2.3. Meeting
6.2.4. Reserve requirements
6.2.5. Dividends
6.2.6. Dissolution
6.2.7. Reporting shareholders’ equity on the statement of
financial position
6.3. Share company in Ethiopia
 6.3.1. Formation of share companies in Ethiopia
6.3.2. Classes of shares (Ethiopia vs. USA)
6.3.3. Issuing shares (Ethiopia vs. USA)
6.3.4. Types of shareholders’ meetings
6.3.5. Treasury shares transactions (Ethiopia vs. USA)
6.3.6. Accounting for dividends (Ethiopia vs. USA)
6.3.7. Reserve requirements
6.3.8. Earnings per ordinary share(IAS 33)
6.3.9. Reporting shareholders’ equity on the statement of
financial position (Ethiopia Vs USA)

2 WEEKS
7. Public enterprises in Ethiopia
{15TH, 16TH } 7.1. Characteristics of public enterprises
7.2. Overview of proclamations pertinent to public enterprises
7.3. Organization, operation, and liquidation of public enterprises
7.4. Privatization of public enterprises

Teaching & The teaching and learning methodology include lecturing, discussions, problem solving, and
Learning analysis. Take-home assignment will be given at the end of each chapter for submission
Methods/strategy within a week. Solution to the assignments will be given once assignments are collected.
Cases with local relevance will also be given for each chapter for group of students to
present in a class room. The full and active participation of students is highly encouraged.

Assessment/ The evaluation scheme will be as follows:

Evaluation Component Weight Coverage
Test 1 15% Chapter 1 & 2
Test 2 15% Chapter 3
Assignment 1 5% Chapter 1 &2
Assignment 2 5% Chapter 3 & 4
Quiz 1 5%
Quiz 2 5%
Final Exam 50% All chapters
Text Book:
 Kieso, D. E., Weygandt, J. J., & Warfield, T. W. (2016). Financial Accounting,
Text and reference IFRS Edition, New York: John Willey & Sons.
books  Commercial Code of Ethiopia