Course Introduction

ADM1340: Introduction to Financial Accounting

Qiu Chen Ph.D., MSc.
Instructor: Qiu Chen

 Education:
Bachelor's, Master’s and Ph.D. in accounting

 Working Experience:
Auditor
Financial Analyst

 Research
Accounting information quality
How users react to accounting information

2
Required Course Materials

 Text Book + WileyPlus

Financial Accounting: Tools for Business Decision-making, by Kimmel,

Weygandt, Kieso, Trenholm & Irvine, 7th Canadian edition, Wiley
• WileyPlus Access (with online texbook): please see how to purchase and log
in WileyPlus on Brightspace under “WileyPlus Access Instructions”.

• Hardcopy and Wileyplus access code : available at the University Bookstore

and you must purchase the access code to Wileyplus.

 Course Pack: Class Slides + In-Class Exercise Questions

• Available on Brightspace.

 Calculator
3
Course Assessment

1. Online Assignments: WileyPlus (10%)

Assignment Due date

Assignment 1 Feb 2 @ 11:59 pm
Assignment 2 Feb 23 @ 11:59 pm
Assignment 3 Mar 8 @ 11:59 pm
Assignment 4 Mar 22 @ 11:59 pm
Assignment 5 April 5 @ 11:59 pm

2. Midterm Exam - February 9 (35%)

– If you receive less than 45% on the midterm exam, you should consider
dropping the course

3. Final Exam (55%)

4
How to succeed in this course

 Suggested Learning Method

• Before class: prepare
• During class: concentrate
• After class: PRACTICE!!!

5
Labs (DGDs)

 All DGDs cover the same contents. Please attend any

one that suits your schedule (starting next week).

 Sections Time Location

#1 Th 16:00 - 17:20 (DMS) 1150
#2 Mo 17:30 - 18:50 (DMS) 1140
#3 We 17:30 - 18:50 (DMS) 1140
#4 We 19:00 - 20:20 (STE) B0138
#5 Th 17:30 - 18:50 (FTX) 147A
#6 Fr 11:30 - 12:50 (DMS) 1110
#7 Th 17:30 - 18:50 (HGN) 302
#8 We 10:00 - 11:20  (DMS) 1140

6
How to get help

 Qiu’s Office hours (DMS7160)

• Monday: 2:00pm to 3:00pm
• Wednesday: 2:30pm to 3:30pm
• Thursday: 4:30pm to 5:30pm
• Or by appointment

7
Chapter 1: The Purpose and Use of Financial
Statements

ADM1340: Introduction to Financial Accounting

Qiu Chen Ph.D., MSc.
Course in a Nutshell

Ch 1 & 2: A Statement of Income

Final Accounting A Statement of Changes in Shareholders’ Equity
Products: A Statement of Financial Position
Financial Statements Ch 13: A Statement of Cash Flow
Ch 14: Financial Statement Analysis

Theories & Assumptions Ch 3: The Accounting Information System

to Generate Financial Ch 4: Accrual Accounting
Statements

Ch 5: Revenue & Cost of Goods Sold

Ch 6: Inventory
Detailed Techniques
Ch 8: Cash & Account and Notes Receivable
to Prepare Financial Ch 9: Property, Plant and Equipment and Intangibles
Statements Ch 10: Liabilities
Ch 11: Shareholders’ Equity

9
Ch 1: Learning Objectives

 Introduction to financial accounting

 Accounting principles in Canada

 Three main types of business activity (to be covered with

Chapter 13)

 Financial statements (to be covered with Chapter 2)

10
Ch 1: Learning Objectives

 Introduction to financial accounting

 Accounting principles in Canada

11
What is Financial Accounting?

Company

Identifies
Records
Communicates
External
Financial decision
A system
statements makers

1) Statement of income
2) Statement of changes in
shareholders’ equity
3) Statement of financial
position (a.k.a. Balance
Sheet)
4) Statement of cash flows 12
5) Notes to financial statements
Who Use Financial Accounting
Information?

 External users
• Shareholders/ owners/investors
• Potential investors
• Creditors (bankers or suppliers)
• Others:
• Tax authorities
• Competitors
• Credit rating agencies (e.g., S&P , Moody’s)
• Labour union
 Internal users
• Board of directors
• Management

13
Ch 1: Learning Objectives

 Introduction to Financial Accounting

 Accounting principles in Canada

14
Economic Entities

 Proprietorship: owned by one person

• Not taxed as separate entities
• Simple to set up; owner has control over business; limited
life; unlimited liability
 Partnership: owned by two or more people
• Similar to proprietorship
• Formalized in written agreement; not taxed as separate
entities; limited life; each partner has unlimited liability
 Corporation:
• Taxed as a separate legal entity
• Indefinite life; shareholders enjoy limited liability; ease of
raising capital
• Types: public vs. private companies
15
Generally Accepted Accounting Principles

Chartered Professional
Publicly accountable Accounts Canada Handbook
companies (i.e., CPA Canada Handbook)

Part I of CPA Handbook:

International Financial Reporting
Standards (IFRS)

Part II of CPA Handbook:

Private companies Accounting Standards for Private
Enterprises (ASPE)

Nonprofit Part III of CPA Handbook:

organizations Accounting Standards for Not-for-
profit Organizations

16
 IMPORTANT: Entity Perspective in accounting
• The assets of the company belong to the company, not a
specific creditor or shareholder.

17
Where to Find CPA Canada Standards

18
Homework

 All assigned questions in the Course Outline (p.8)

Chapter 1:
• BE1-5, BE1-7, BE1-8
• E1-2, E1-3, E1-7
(Most assigned questions are from Learning Objective 4:
Financial statements. We will cover the topic along with
Chapter 2. Please do the homework after Chapter 2 is
finished)

19