LahoreUniversityofManagementSciences

ACCT100PrinciplesofFinancialAccounting
FallSemester2016

Instructor SyedZainUlAbidin
RoomNo. 409
OfficeHours byappointment
Email syed.zain@lums.edu.pk
Telephone 5326
Secretary/TA TBA
TAOfficeHours TBA
CourseURL(ifany) suraj.lums.edu.pk/~ro/

COURSEBASICS
CreditHours 3Credits
Lecture(s) NbrofLec(s)PerWeek 2 Duration 75mins
Recitation/Lab(perweek) NbrofLec(s)PerWeek None Duration N/A
Tutorial(perweek) NbrofLec(s)PerWeek 1 Duration 60mins

COURSEDISTRIBUTION
Core CoreCourseforACFFreshmen
Elective
OpenforStudentCategory Freshmen(ACFmajorsonly), OpenforAllinphaseII
CloseforStudentCategory

COURSEDESCRIPTION

The course is designed to provide an understanding of financial accounting fundamentals for prospective users of corporate
financial information, suchas investors,creditors, employees, and other stakeholders (e.g., suppliers, customers). The course
focusesonunderstandinghoweconomiceventssuchasoperatingactivities,corporateinvestments,andfinancingtransactionsare
recordedinthethreemainfinancialstatements(i.e.,theincomestatement,balancesheet,andstatementofcashflows).Themain
emphasisofthiscourseisplacedonthebasicframeworkofaccountingsoastoprovidethestudentwithanunderstandingofthe
fundamental accounting principles and concepts. A heavy reliance will be placed on problem solving and practical analyses to
achieve the aforementioned level of understanding. Students will develop the technical skills needed to analyze financial
statements and disclosures for use in financial analysis. Students will also learn how accounting standards and managerial
incentives affect the financial reporting process. The tools and skills you learn in this course will help you throughout your
professionalcareerandyourlife.

COURSEPREREQUISITE(S)

The course is recommended for students with little or no prior background in financial accounting that want to improve their
financialliteracy.Therearenoacademicprerequisitesforthecourse.Althoughwewillworkwithnumbersinthecourse,theonly
requiredmathknowledgeisaddition,subtraction,multiplication,anddivision.

 LahoreUniversityofManagementSciences
COURSELEARNINGOBJECTIVES(CLO)
ThiscoursewillintroduceyoutothekeyconceptsofAccounting.Youwilllearntopreparefinancialstatements
andwillalsobeequippedtoanalyzethem.Aftertakingthiscourse,youwillbeableto:

1. Describethenature,usesandpurposesoffinancialaccounting,andoutlineboththeconceptualandregulatory
frameworksthatgovernthepreparationandreportingoffinancialinformation
2. Explaintheaccountingequationanditslinkwithfinancialstatements,andillustratetheimpactofeconomic
transactionsontheaccountingequation
3. Describethekeyconceptsandconventionsthatunderliefinancialaccounting
4. Describeandapplythetransactionsrecordingprocessfromsourcedocumentstofinancialstatementsviathe
booksofprimeentry,ledgersandtrialbalance
5. Explainthenatureandpurposesofcontrolaccountsandapplyappropriatecorrectingtechniquesforerrorsand
omissions
6. Explainandapplytherecognitionandmeasurementprinciplesrelatingto:noncurrentliabilitiesandequity,non
currentassets(includingdepreciationandamortization),inventories(andcostofsales)andothercurrentassets
andliabilities(includingreceivablesandbaddebts,prepaymentsandaccruals,etc.)
7. Explainthecharacteristicsofasoleproprietorvisvisacompany;andpreparefinancialstatementsforboth
formsofentities
8. Explain the characteristics of a partnership, prepare financial information for a partnership including the
admissionofapartnerandthedissolutionofapartnership
9. Applyaccountingprinciples,conceptsandconventionsinpracticalsituations
10. Demonstratebasicproblemsolvingskills
11. Demonstrateanabilitytoundertakeindependentstudyandtomanagetime
12. Demonstratebasicnumericalskills

UNDERGRADUATEPROGRAMLEARNINGGOALS&OBJECTIVES
GeneralLearningGoals&Objectives
Goal1EffectiveWrittenandOralCommunication
Objective:Studentswilldemonstrateeffectivewritingandoralcommunicationskills
Goal2EthicalUnderstandingandReasoning
Objective:Studentswilldemonstratethattheyareabletoidentifyandaddressethicalissuesinanorganizationalcontext.
Goal3AnalyticalThinkingandProblemSolvingSkills
Objective:Studentswilldemonstratethattheyareabletoidentifykeyproblemsandgenerateviablesolutions.
Goal4ApplicationofInformationTechnology
Objective:Studentswilldemonstratethattheyareabletousecurrenttechnologiesinbusinessandmanagementcontext.
Goal5TeamworkinDiverseandMulticulturalEnvironments
Objective:Studentswilldemonstratethattheyareabletoworkeffectivelyindiverseenvironments.
Goal6UnderstandingOrganizationalEcosystems
Objective:StudentswilldemonstratethattheyhaveanunderstandingofEconomic,Political,Regulatory,Legal,Technological,
andSocialenvironmentoforganizations.

MajorSpecificLearningGoals&Objectives
Goal7(a)DisciplineSpecificKnowledgeandUnderstanding
Objective:Studentswilldemonstrateknowledgeofkeybusinessdisciplinesandhowtheyinteractincludingapplicationtoreal
worldsituations(includingsubjectknowledge).
Goal7(b)Understandingthesciencebehindthedecisionmakingprocess(forMGSMajors)
Objective:Studentswilldemonstrateabilitytoanalyzeabusinessproblem,designandapplyappropriatedecisionsupport
tools,interpretresultsandmakemeaningfulrecommendationstosupportthedecisionmaker


Indicatebelowhowthecourselearningobjectivesspecificallyrelatetoanyprogramlearninggoalsandobjectives.
PROGRAMLEARNINGGOALSAND
OBJECTIVES
Goal1EffectiveWrittenandOral
Communication
Goal2EthicalUnderstandingand
Reasoning
Goal3AnalyticalThinkingandProblem
SolvingSkills
Goal4ApplicationofInformation
Technology
Goal5TeamworkinDiverseand
MulticulturalEnvironments
Goal6UnderstandingOrganizational
Ecosystems
Goal7(a)DisciplineSpecificKnowledge
andUnderstanding
Goal7(b)Understandingthescience
behindthedecisionmakingprocess
GRADINGBREAKUPANDPOLICY
Assignment(s):
Quiz(s):
Attendance:
MidtermExamination:
FinalExamination:
Pleasenotethatnoquizwillbedropped.Underextenuatingcircumstances,foramissedquiz,themeanoftheclassinthemissed
quizorthemeanofthestudentsotherquizzes,whicheverislowerwillbepostedforonlyonemissedquiz.Quizzesarenormally
LahoreUniversityofManagementSciences
COURSELEARNINGOBJECTIVES COURSEASSESSMENTITEM
Studentswillhaveanopportunityto Classroomdiscussions
demonstratetheircommunicationskills
byinteractinginclassroomdiscussion
Ethicalunderstandingisembeddedinthe Classroomdiscussions,Quizzes,
contentofthiscoursethroughtheuseof Assignments,andExams
theInternationalFinancialReporting
Standards(IFRSs).
Analyticalthinkingandproblemsolving Classroomdiscussions,Quizzes,
skillsareembeddedinthecontentofthis Assignments,andExams
courseandareessentialforcompleting
thiscoursesuccessfully
Internationalization isembeddedinthe Classroomdiscussions,Quizzes,
contentofthiscoursethroughtheuseof Assignments,andExams
theInternationalFinancialReporting
Standards(IFRSs).Moreover,the
principlesofintroductoryfinancial
accountingarecommonacrossmost
countries.
Understandingorganizationalecosystems Classroomdiscussions,Quizzes,
isembeddedinthecontentofthiscourse Assignments,andExams
throughtheuseoftheInternational
FinancialReportingStandards
(IFRSs).Moreover,theprinciplesof
introductoryfinancialaccountingare
commonacrossmostcountriesand
companies.
Thecourse contentmeetsthestandards Thetextbookusedforthiscourseis
oftheprofessionalaccountancybodies basedonInternationalFinancial
(e.g.ICAP,ICAEW,ACCAandCIMA). AccountingStandards(IFRSs)
Thecourseexplainthefinancialand Classroomdiscussions,Quizzes,and
ethicaleffectsofchoosingoneGenerally Assignments
AcceptedAccountingPrinciple(GAAP)
overanotherGAAP
10%
30%
10%
20%
30%
 LahoreUniversityofManagementSciences
givenatthebeginningofasession,youareexpectedtobeinyourseats5minutesbeforeeachclasssession,latewalkinsonaquiz
daydisturbthewholeclassandwillnotbeallowedtotakethequiz.

Studentswithlessthan50%marksoverall,willreceiveanFgrade.However,thiswillnotaffectgradesofotherstudents.The
remainingstudentswillbeawardedgradestheywouldbeotherwiseentitledto.

Ifyoumissmorethanseven(7)classes,youwillautomaticallygetanFgradeinthecourse.Iexpectyoutobepunctualandbe
inyourseatbeforetheclassstarts.Latewalkinwillbecountedasanonattendanceandwillloweryourattendancegrade.

EXAMINATIONDETAIL
Yes/No:Yes
Combine/Separate:Combine
Midterm Duration:2hours
Exam PreferredDate:MidtermWeek
ExamSpecifications:MCQFormat.Closedbooks,closednotes,youmaybringcalculator.Youwillnotbeallowed
touseyourcellphoneasacalculatororborrowcalculatorfromsomeoneinclass
Yes/No:Yes
Combine/Separate:Combine
Duration:2hours
FinalExam PreferredDate:FinalExamweek
ExamSpecifications:MCQFormat.Closedbooks,closednotes,youmaybringcalculator.Youwillnotbeallowed
touseyourcellphoneasacalculatororborrowcalculatorfromsomeoneinclass

COURSEOVERVIEW
Reading SessionOutcome(s)
SessionTopic
Session Material (Aftercompletingthissession,youshouldbeableto)
AccountinginAction Chapter1 1. Explainwhataccountingis.
2. Identifytheusersandusesofaccounting.
3. Understandwhyethicsisafundamentalbusinessconcept.
4. Explainaccountingstandardsandthemeasurementprinciples.
5. Explainthemonetaryunitassumptionandtheeconomicentity
1 assumption.
6. Statetheaccountingequation,anddefineitscomponents.
7. Analyzetheeffectsofbusinesstransactionsontheaccountingequation.
8. Understandthefourfinancialstatementsandhowtheyareprepared.
(CLO17)

TheRecordingProcess Chapter2 1. Explainwhatanaccountisand howithelpsintherecordingprocess.
2. Definedebitsandcreditsandexplaintheiruseinrecordingbusiness
transactions.
3. Identifythebasicstepsintherecordingprocess.
4. Explainwhatajournalisandhowithelpsintherecordingprocess.
2
5. Explainwhataledgerisandhowithelpsintherecordingprocess.
6. Explainwhatpostingisandhowithelpsintherecordingprocess.
7. Prepareatrialbalanceandexplainitspurposes.
(CLO17)

TheRecordingProcess Chapter2 Sameasabove
3

 LahoreUniversityofManagementSciences
AdjustingtheAccounts Chapter3 1. Explainthetimeperiodassumption.
2. Explaintheaccrualbasisofaccounting.
3. Explainthereasonsforadjustingentries.
4. Identifythemajortypesofadjustingentries.
4 5. Prepareadjustingentriesfordeferrals.
6. Prepareadjustingentriesforaccruals.
7. Describethenatureandpurposeofanadjustedtrialbalance.
(CLO112)

5 AdjustingtheAccounts Chapter3 Sameasabove
Completingthe Chapter4 1. Prepareaworksheet.
AccountingCycle 2. Explaintheprocessofclosingthebooks.
3. Describethecontentandpurposeofapostclosingtrialbalance.
4. Statetherequiredstepsintheaccountingcycle.
6
5. Explaintheapproachestopreparingcorrectingentries.
6. Identifythesectionsofaclassifiedstatementoffinancialposition.
(CLO112)

Accountingfor Chapter5 1. Identifythedifferencesbetweenserviceandmerchandisingcompanies.
Merchandising 2. Explaintherecordingofpurchasesunderaperpetualinventorysystem.
Operations 3. Explaintherecordingofsalesrevenuesunderaperpetualinventory
system.
7
4. Explainthestepsintheaccountingcycleforamerchandisingcompany.
5. Prepareanincomestatementforamerchandiser.
(CLO17)

Accountingfor Chapter5 Sameasabove
8 Merchandising
Operations
Inventories Chapter6 1. Describethestepsindetermininginventoryquantities.
2. Explaintheaccountingforinventoriesandapplytheinventorycostflow
methods.
3. Explainthefinancialeffectsoftheinventorycostflowassumptions.
4. Explainthelowerofcostornetrealizablevaluebasisofaccountingfor
9
inventories.
5. Indicatetheeffectsofinventoryerrorsonthefinancialstatements.
6. Computeandinterprettheinventoryturnoverratio.
(CLO17)

10 Inventories Chapter6 Sameasabove
Fraud,InternalControl, Chapter7 1. Definefraudandinternalcontrol.
andCash 2. Identifytheprinciplesofinternalcontrolactivities.
3. Explaintheapplicationsofinternalcontrolprinciplestocashreceipts.
4. Explaintheapplicationsofinternalcontrolprinciplestocash
disbursements.
11
5. Describetheoperationofapettycashfund.
6. Indicatethecontrolfeaturesofabankaccount.
7. Prepareabankreconciliation.
8. Explainthereportingofcash
(CLO17)
 LahoreUniversityofManagementSciences
Accountingfor Chapter8 1. Identifythedifferenttypesofreceivables.
Receivables 2. Explainhowcompaniesrecognizeaccountsreceivable.
3. Distinguishbetweenthemethodsandbasescompaniesusetovalue
accountsreceivable.
4. Describetheentriestorecordthedispositionofaccountsreceivable.
5. Computethematuritydateofandinterestonnotesreceivable.
12
6. Explainhowcompaniesrecognizenotesreceivable.
7. Describehowcompanysvaluenotesreceivable.
8. Describetheentriestorecordthedispositionofnotesreceivable.
9. Explainthestatementpresentationandanalysisofreceivables.
(CLO112)

Accountingfor Chapter8 Sameasabove
13
Receivables
PlantAssets,Natural Chapter9 1. Describehowthehistoricalcostprincipleappliestoplantassets.
ResourcesandIntangible 2. Explaintheconceptofdepreciationandhowtocomputeit.
Assets 3. Distinguishbetweenrevenueandcapitalexpenditures,andexplainthe
entriesforeach.
4. Explainhowtoaccountforthedisposalofaplantasset.
14 5. Computeperiodicdepletionofextractablenaturalresources.
6. Explainthebasicissuesrelatedtoaccountingforintangibleassets.
7. Indicatehowplantassets,naturalresources,andintangibleassetsare
reported.
(CLO112)

PlantAssets,Natural Chapter9 Sameasabove
15 ResourcesandIntangible
Assets
16 MidTerm
Liabilities Chapter10 1. Explainacurrentliability,andidentifythemajortypesofcurrent
liabilities.
2. Describetheaccountingfornotespayable.
3. Explaintheaccountingforothercurrentliabilities.
4. Explainwhybondsareissued,andidentifythetypesofbonds.
5. Preparetheentriesfortheissuanceofbondsandinterestexpense.
17
6. Describetheentrieswhenbondsareredeemed.
7. Describetheaccountingforlongtermnotespayable.
8. Identifythemethodsforthepresentationandanalysisofnoncurrent
liabilities.
(CLO112)

18 Liabilities Chapter10 Sameasabove
AccountingforSole Chapter12 1. Identifythecharacteristicsofthepartnershipformofbusiness
Proprietorsand organization.
Partnerships 2. Explaintheaccountingentriesfortheformationofapartnership.
(Retirement,death, 3. Identifythebasesfordividingnetincomeornetloss.
19 dissolution,liquidation.) 4. Describetheformandcontentofpartnershipfinancialstatements.
5. Explaintheeffectsoftheentriestorecordtheliquidationofa
partnership.
(CLO8)

 LahoreUniversityofManagementSciences
Corporations: Chapter11 1. Identifythemajorcharacteristicsofacorporation.
Organization,Share 2. Recordtheissuanceofordinaryshares.
Transactions,Dividend 3. Explaintheaccountingfortreasuryshares.
andRetainedEarnings 4. Differentiatepreferencesharesfromordinaryshares.
20
(includingbranch 5. Preparetheentriesforcashdividendsandsharedividends.
accounting) 6. Identifytheitemsreportedinaretainedearningsstatement.
7. Prepareandanalyzeacomprehensiveequitysection.
(CLO19)
Corporations: Chapter11 Sameasabove
Organization,Share
Transactions,Dividend
21
andRetainedEarnings
(includingbranch
accounting)
StatementofCashFlows Chapter13 1. Indicatetheusefulnessofthestatementofcashflows.
2. Distinguishamongoperating,investing,andfinancingactivities.
22 3. Prepareastatementofcashflowsusingtheindirectmethod.
4. Analyzethestatementofcashflows.
(CLO112)
23 StatementofCashFlows Chapter13 1. Prepareastatementofcashflowsusingthedirectmethod.
24 StatementofCashFlows Chapter13 Sameasabove
FinancialStatement Chapter14 1. Discusstheneedforcomparativeanalysis.
Analysis 2. Identifythetoolsoffinancialstatementanalysis.
3. Explainandapplyhorizontalanalysis.
4. Describeandapplyverticalanalysis.
5. Identifyandcomputeratiosusedinanalyzingafirmsliquidity,
25
profitability,andsolvency.
6. Understandtheconceptofearningpower,andhowdiscontinued
operationsarepresented.
7. Understandtheconceptofqualityofearnings.
(CLO112)
FinancialStatement Chapter14 Sameasabove
26
Analysis
FinancialStatement Chapter14 Sameasabove
27
Analysis
PreparationofFinancial Tobe
28 Statementsfrom provided
IncompleteRecord

TEXTBOOK(S)/SUPPLEMENTARYREADINGS
FinancialAccounting,IFRSEdition:1stEdition
byJerryJ.Weygandt,PaulD.Kimmel,DonaldE.Kieso