Print Version

Effective: Summer 2014

Prerequisites: Prerequisite: ACTG 1A.
Advisory: Advisory: Eligibility for MATH 220 and ENGL 110 or ESLL 26; not open to students with credit in ACTG 1BH.
Grade Type: Letter Grade, the student may select Pass/No Pass
Not Repeatable.
FHGE: Non-GE Transferable: CSU/UC
5 hours lecture. (60 hours total per quarter)

Student Learning Outcomes -
  • Explain financial accounting terminology, concepts, principles, and frameworks.
  • Perform related calculations and demonstrate the ability to use methods and /or procedures to solve financial accounting problems.
Description -
Continuation of ACTG 1A focusing on accounting as an information system, examining why it is important and how it is used by investors, creditors, and others to make decisions. Long-term assets, short- and long-term liabilities, equity valuation, revenue and expense recognition, statement of cash flows, financial statement analysis, internal controls, and ethics.

Course Objectives -
The student will be able to:
  1. Identify types of long-term assets.
  2. Identify the costs associated with each category of plant assets.
  3. Identify issues relating to long-term asset acquisition, use, depreciation, amortization, depletion, and disposal.
  4. Distinguish between capital and revenue expenditures.
  5. Explain ethical issues related to plant assets
  6. Explain the valuation and reporting of current liabilities, estimated liabilities, and other contingencies.
  7. Explain issues related to payroll, its records, and payroll-related transactions.
  8. Identify and illustrate issues relating to long-term liabilities, including issuance, valuation, and retirement of debt.
  9. Identify issues relating to stockholders' equity, including issuance, repurchase of capital stock, and dividends.
  10. Explain the importance of operating, investing and financing activities reported in the Statement of Cash Flows.
  11. Interpret company activity, profitability, liquidity and solvency through selection and application of appropriate financial analysis tools.
Special Facilities and/or Equipment -
Access to PC lab and Excel software. When taught as an online distance learning section, students and faculty need ongoing and continuous Internet and Email access.

Course Content (Body of knowledge) -
  1. Long-term assets
    1. plant assets and their related expenses
    2. measuring the cost of plant assets
    3. capital expenditures and revenue expenditures
    4. depreciation methods
    5. asset impairments
    6. disposing plant assets
    7. natural resources
    8. depletion of natural resources
    9. intangible assets
    10. amortization of intangible assets
    11. research and development
    12. ethical issues in accounting for plant assets
  2. Current liabilities
    1. accounts payable
    2. short-term notes payable
    3. sales tax payable
    4. current segment of long-term notes payable
    5. accrued liabilities
    6. unearned revenue
    7. contingent liabilities
    8. remote liabilities
    9. accounting for payroll, gross pay, and net pay
    10. payroll withholding
    11. payroll records
    12. internal control over payroll
  3. Long-term liabilities
    1. long-term notes payable and mortgage payable
    2. bonds payable
    3. types of bonds
    4. bond prices
    5. present value of money
      1. present value of one payment or receipt
      2. present value of annuity
      3. present value of bonds payable
    6. interest expense on bonds using straight-line method
    7. premium and discount bond and their related amortization
    8. reporting liabilities on the balance sheet
  4. Stockholders' equity and reporting requirements
    1. classes of stocks
    2. issuing common and preferred stock
    3. paid-in capital
    4. retained earnings
    5. cash dividends
    6. market value, liquidation value, and book value of stock
    7. income taxes by corporations
    8. stock dividends, stock splits, and treasury stock
    9. retirement of stock
    10. restriction on retained earnings
    11. corporate income statement
      1. continuing operations
      2. discontinue operations and extraordinary items
      3. earnings per share
    12. reporting comprehensive income
  5. Measuring cash flow
    1. operating activities
      1. direct method
      2. indirect method
    2. investing activities
    3. financing activities
    4. noncash investing and financing activities
    5. free cash flow
  6. Financial statements and statement analysis
    1. horizontal and vertical analysis
    2. trend analysis
    3. common size analysis
    4. benchmarking
    5. using ratios to make decisions
      1. profitability ratios
      2. liquidity ratios
    6. using ratios to make decisions
    7. red flags in financial statement analyses
Methods of Evaluation -
The student will demonstrate proficiency by:
  1. Class participation.
  2. Problem-Solving Assignments
  3. Assignments requiring the use of general ledger software, spreadsheet, word-processor, and presentation applications such as Quickbooks, MS Excel, MS Word, and MS Powerpoint, respectively
  4. Quizzes
  5. Exams
  6. Team projects
  7. Research assignments
  8. Case study analyses
  9. Oral and/or Written Presentations
Representative Text(s) -
Horngren,Harrison Jr. & Oliver Accounting. 10th ed. Upper Saddle River, New Jersey: Pearson Publishing, 2014.
Pasewark, William R. Understanding Corporate Annual Reports. 7th ed. Burr Ridge, Illinois: Irwin McGraw-Hill, 2010.

Disciplines -
Method of Instruction -
Lecture, Discussion, Oral presentations, Electronic discussions/chat, group work, Excel and homework assignments.
Lab Content -
Not applicable.
Types and/or Examples of Required Reading, Writing and Outside of Class Assignments -
  1. Reading of corporate annual reports
  2. Written Research Paper and/or Project
  3. Written Presentation
  4. Reading of internet articles and writing on accounting topics or accounting-related current events and/or careers