INSTITUTE of BUSINESS MANAGEMENT

College of Business Management

Department of Accounting & Finance

Intermediate Financial Accounting ACC 201

Faculty: Shakira Fareed

1. Overall aims of the course

This course provides students a thorough understanding of Accounting concepts and assumptions for
bonds and shares issuance, debt investment, import & export transactions, preparation of cash flow
statements and stockholders’ equity and also provides students the tools, necessary to understand and
execute appropriate accounting procedures that enable students to understand the process through
which accounting standards are determined and to evaluate the outcomes of that process from the
perspectives of managers’ shareholders, auditors etc. Students will also learn to assess competing
accounting theories and methods from multiple perspectives.

2. Intended learning outcomes of course (ILOs)

a. Knowledge and understanding:

Students should be able to:

 Distinguish between different types of corporations

 Understand the difference between common and preferred stock
 Define treasury stock and its accounting in case of acquisition and reissuance
 Explain the meaning of earning per share
 Understand the differences between bonds and share and their respective accounting
procedures
 Account for bond issues, bond interest, retirement and convertible bonds
 Analyze the investments in bonds
 Classify and analyze operating, investing and financing activities
 Understand how to develop cash flow statement, equity statement and retained earning
statement

b. Intellectual skills

 Effective qualitative problem solving and decision making skills.

  The ability to create, evaluate and access a range of options, together with the capacity to
apply ideas and knowledge to a range of business and other situations.
 The ability to apply given tools/methods accurately and carefully to a well defined problem.

c. Professional and practical skills through experiential learning

After completion of the course the students should be able to:

 Application of skills: can operate in predictable, defined contexts that require use of a specified
range of standard techniques
o analyze the impact of dividends on book value per share
o Explain the reasons of rise and fall in earning per share due to acquisition and reissuance
of treasury stock and distribution of cash and stock dividends.
o Recognize the accounting issues related to mortgage notes, leases and bonds
o Impact of Cashflows on company’s performance

 Autonomy in skill use: to act with limited autonomy, under direction or supervision, within
defined guidelines

d. General and transferable skills

 Group working: can work effectively with others as a member of a group and meet
obligations to others (for example, tutors, peers, and colleagues)
 Learning resources: can work within an appropriate ethos and can use and access a range
of learning resources
 Self evaluation: can evaluate own strengths and weakness within criteria largely set by
others.
 Management of information: can manage information, collect appropriate data from a
range of sources and undertake simple research tasks with external guidance
 Autonomy: can take responsibility for own learning with appropriate support
 Communications: can communicate effectively in a format appropriate to the discipline(s)
and report practical procedures in a clear and concise manner

Session Topics/Contents, Intended Learning Outcomes and Methodology

1 Topic/ Course contents

Class and course introduction

Revision of introduction to Financial Accounting concepts including; Forms of business

organization, Steps in accounting cycle, Double entry system of book keeping, Balance
sheet and its contents, Definition& content of income statement

2 to6 INTRODUCTION TO CORPORATIONS

This chapter emphasizes details of the corporate form of organization. The accounting
concepts and procedures for equity transactions are explained. It also describes how to
report and analyze income, earnings per share, and retained earnings. The content
includes; Nature of corporations, Nature & classification of shares, Preparing journal
 entries for issuance, Preparing SHE(Stockholder’s equity),Calculation of average issue
price, book value per share under:-If common shares issued &-If both common &
preferred shares are issued, Stock Dividends & cash Dividends:-How to prepare journal
entries & SHE for declaration and distribution of stock and cash dividends and Treasury
Stocks

Intended Learning Outcomes:

1. Define types of businesses and corporations

2. Explain the difference between; common shares & preference shares and the
concepts of and demonstrate the accounting treatments for par, no-par and
stated value stock and stock subscriptions
3. Identify the features, advantages and disadvantages of a corporate entity
4. Discuss the accounting methods of relating to corporations
5. Describe & Practical Application of dividends associated with preferred and
common stock, share holder’s equity, acquisition and reissuance treasury stock
and book value per share
Teaching Material

Financial and Managerial Accounting – Williams , Hakka and Bettner, Chapter 11

Pedagogy
1. Pre Class independent study
2. Input session (students centered)
3. Lecture with discussion with problem solving
4. Review and evaluation (student centered)

7-10 CORPORATIONS ADDITIOAL EQUITY ISSUES AND INCOME REPORTING

This chapter focuses on the components of Income statement and retained earnings
statement. The income statement of a corporation includes the same types of revenues
and expenses as companies organized as sole proprietors and partnerships with one
difference. A corporation is a legal entity and therefore, it must pay taxes. Some
companies report additional items after income tax expense on their income
statements. These items represent special items outside of normal business operations.
They are shown separately to ensure users can identify what income from continuing
business results will be. If any special items are included on the income statement, the
income tax expense or savings related to each item is net against the special item to
report it after taxes. These additional special items may be one of three types:
discontinued operations, extraordinary items, and changes in accounting principles. The
content includes; Treasury stock, retained earnings, corporate income reporting and
earnings per share.

Intended Learning Outcomes:

 1. Define types of income reporting and component of retained earnings
2. Explain the proper treatment of prior period adjustments and restrictions that
may be imposed on retained earnings and earnings per share
3. Identify the difference between cash dividends, stock dividends and stock split in
the accounting records
4. Discuss the accounting methods related to income reporting and dividends
5. Describe & Practical Application of disclosure rules for discontinued operations,
extraordinary items, accounting changes and intra period tax allocation and
computation of earnings per share

Teaching Material
 Financial and Managerial Accounting – Williams , Hakka and Bettner, Chapter 12
Pedagogy
1. Pre Class independent study
2. Input session (students centered)
3. Lecture with discussion and problem solving
4. Review and evaluation (student centered)

11 MID TERM
12-15 LONG TERM LIABILITIES
Business constantly needs funds to finance their diverse activities which are obtained
from different sources. This chapter focuses on long term liabilities with a concentration
on bonds and other long term liabilities specifically mortgages, leases, deferred taxes,
pensions and post retirement health care benefits.

Intended Learning Outcomes

1. Define the basic differences between bondholders and stockholders

2. Explain the fundamentals of accounting for income taxes and employee benefit
plans, leases and mortgage notes
3. Identify the various types of bonds that may be issued
4. Discuss bond issues at par, premium and discount
5. Describe & Practical Application of ammonization under straight line method
and effective interest method and computations related to mortgages and
leases

Teaching Material
Accounting Principles by Lanny M. Solomon 4th Edition, Chapter 17
Pedagogy
1. Pre Class independent study
2. Input session (students centered)
3. Lecture with discussion with problem solvings
4. Review and evaluation (student centered)
16-20 LONG TERM INVESTMENT
Investments in assets are a fact of life for all businesses. This chapter focuses on long
term investment in corporate securities both bonds and stocks. Accounting for stock
acquisitions depends upon the percentage of shareholding. Thus different accounting
methods for different percentages of holdings will also be included. The contents
include; Investment in bonds, bond interest revenue, bond discount and premium
amortization, investments in stocks with method recording investments with LCM,
equity and controlling investment methods.

Intended Learning Outcomes

1. Define account for investments in bonds

2. Explain the reason for consolidated financial statements and the related
concepts of intercompany transactions and elimination entries
3. Identify parent / subsidiary relationships
4. Discuss company’s minority interest
5. Describe & Practical Application of consolidated financial statements
immediately after acquisition and lower of cost or market and equity
methods of accounting for stock investments

Teaching Material
Accounting Principles by Lanny M. Solomon 4th Edition, Chapter 18
Pedagogy
1. Pre Class independent study
2. Input session (students centered)
3. Lecture with discussion with problem solving
4. Review and evaluation (student centered)

21 2nd Midterm Exam

22-26 STATEMENT OF CASH FLOWS

Cash flow information is helpful to investors and creditors in judging future cash flows
from the company to themselves. The purpose of this chapter is to provide information
about the cash receipts and cash payments of a business entity during the accounting
period. In addition, the statement of cash flows is intended to provide information about
the investing and financing activities of the company during the period.

Intended Learning Outcomes

1. Define the purpose of the statement of cash flows
2. Explain the direct and indirect methods of calculation of net cash flow from
operating activities
3. Identify the major classifications of cash flows
4. Discuss the accounting methods of preparation of statement of cash flows
5. Describe & Practical Application of statement of cash flows and use of a worksheet
in preparing a statement of cash flows.
 Teaching Material
Financial and Managerial Accounting – Williams , Hakka and Bettner, Chapter 13

Pedagogy
5. Pre Class independent study
6. Input session (students centered)
7. Lecture with discussion with problem solving
8. Review and evaluation (student centered)

27-28 GLOBAL ACCOUNTING

In this Chapter importance of financial as well as international reporting is explained to

the students. Students are given the opportunity to learn about international accounting
from a perspective similar to what they will experience in the business world. The course
content includes; Objective of financial reporting, the foundation of accounting and
international accounting: Import/export Accounting Transaction. Recording of buying/
selling of goods & gain/loss on fluctuation.

Intended Learning Outcomes

1. Define the objective and characteristics of global accounting and international

reporting
2. Explain the importance of understanding of global accounting and its practical
application
3. Identify the key elements of a trading oriented company’s accounting and
discuss the key issues facing such companies
4. Discuss the role of global accounting in current world
5. Describe and Practical Application the method of recording selling and buying
transactions as importers as well as exporters and calculation of the same
Teaching Material
Financial and Managerial Accounting – Williams , Hakka and Bettner, Chapter 15

Pedagogy
1. Pre Class independent study
2. Input session (students centered)
3. Lecture with discussion and problem solving
4. Review and evaluation (student centered)

29-30 Final Exam

Students will be assessed by means of three hour exam for 40% of the overall marks
awarded, focusing sharply on the learning outcomes of accounting concepts taught
throughout the semester.

1. Teaching and learning methods

This course will be structured in such a way as to facilitate the use of different methods of
instruction. Students are expected to take an active role in their learning experience and will be
expected to have read the assigned material prior to class and to have prepared any written
assignments. Classroom session will include the lecture, question and answer session, group
discussions and class exercises and problems solving. Work may be done individually or in small
groups. The readings will come from the required text. Lectures and discussions will enable the
students to expand on and clarify the material presented in the readings.

2. Student assessment methods

Rubrics for Marking

Rubrics Below Average Average Proficient

Category
Import/export Not attempted or Transaction journalized Transaction journalized
Accounting partially attempted but with errors correctly
Transaction.
1 Recording of buying/
selling of goods &
gain/loss on
fluctuation.
Prepare Not attempted or Computations for SHE Computations for SHE
SHE(Stockholder’s partially attempted and book value and and book value and
equity),Calculation of preparing entries for preparing entries for
average issue price, corporations with corporations proficiently.
book value per share errors.
2
under:-If common
shares issued &-If
both common &
preferred shares are
issued,
Prepare journal Not attempted or Calculations and Calculations and journal
entries for Treasury partially attempted journal entries with entries are prepared
stock, stock dividends errors. correctly.
3 and calculations of
retained earnings, and
earnings per share.

Accounting for long Not attempted or Accounting for long Accounting for long term
4 term liabilities partially attempted term Liabilities with liabilities applied
issuance errors correctly
Accounting for long Not attempted or Accounting for long Accounting for long term
5 term investments partially attempted term investments with investments applied
issuance errors correctly
6 Prepare statement of Not attempted or statement of cash Statement of cash flows
cash flows by using partially attempted flows is prepared but prepared correctly
direct & indirect
 method with errors

Assessment

Assessment methods Objectives to assess.. Week Weight age

1 Quizzes Knowledge and 3, 5, 7, 15%
understanding 9,
12,13
2 Assignments Knowledge and 2, 4, 6, 15%
understanding 8, 11, 14
3 1st Mid Term test Knowledge and 6 15%
understanding
4 2nd Mid Term test Knowledge and 11 15%
understanding
5 Final Examination Knowledge and 16 40%
understanding
Total: 100%

Assignments:
Assignments will consist of explaining topics and students are required to relate the knowledge and
understanding with the real world.

3. Essential Reading

1) Financial and Managerial Accounting: 13th edition by Meigs, Williams, Haka and Bettner
2) Accounting Principles 4th Edition by Solomon
Recommended Readings
1. Intermediate Accounting, Third Edition by Bart P. Hartman, Robert M. Harper, James A Knoblett,
and Phillip M. Reckers

2. Intermediate Accounting, Sixth edition by lanny G.Chasteen, Richard E. Flaherty and Melvin
C.O’Connor

4. Facilities required for teaching and learning

 Classroom multimedia
 Classroom overhead projector
 Panoramic whiteboard across front class wall
 Clock on back and front class wall
.

Room #

E-mail:
Head of Department
Date: