THE HONG KONG

POLYTECHNIC UNIVERSITY

10

School of Accounting and Finance

Subject Outline

Accounting Concepts for

Decision Making
Accounting Concepts and Applications
(Subject Code: AF2111)

Semester 2, 2016/2017
AF2111-Accounting Concepts for Decision Making Subject Outline

Contents

GENERAL INFORMATION......................................................................................2
ROLE AND PURPOSE...............................................................................................2
LEARNING OUTCOME............................................................................................3
COURSE MATERIAL AND INFORMATION.........................................................3
TEXTBOOK & REFERENCES.................................................................................4
TOPICAL COVERAGE & TEACHING/LEARNING APPROACH.....................5
TENTATIVE TEACHING SCHEDULE & WEEKLY ASSIGNMENTS...........6-9
METHOD OF ASSESSMENT/OVERALL GRADE ..........................................9-12

GENERAL INFORMATION

Weekday
Lecture Friday 830 - 1020 FJ303
Tutorial 1 Monday 1230 - 1320 R508
Tutorial 2 Monday 1030 1120 R601
Tutorial 3 Thursday1730 - 1820 V314
Tutorial 4 Tuesday 1130 1220 DE303

Lecturer / Tutor Ms. Sarah Cheng/ Ms Teresa Kwok

Office: M754/ M832a

Telephone: 2766-7027/ 2766-7030

E-mail: afsarah@polyu.edu.hk/ Teresa.v.kwok@polyu.edu.hk

Consultation Hours: Monday 1600 - 1800

Or by appointment

ROLE AND PURPOSE

This subject provides students with a framework to understand the accounting process in
organizations. It also introduces tools to students to understand and interpret financial
information. Students should be capable of making informed decisions, including but not limited
to accounting decision making.

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AF2111-Accounting Concepts for Decision Making Subject Outline

LEARNING OUTCOME

In general, they are expected to be able to integrate with other courses in the programme to

1. understand accounting roles and functions; and be able to apply diverse conceptual
and theoretical frameworks in analyzing and solving organizational problems;

2. synthesize accounting theories and practices as applicable to the planning, organizing,

execution, monitoring, evaluation, motivation and change management functions of
organizations;

3. contribute effectively in a cross-functional team environment to the alignment of your

own functional objectives with business and strategic objectives.

Specifically students should be able to

Describe the role and importance of management and financial accounting

information in decision-making in a business environment.
Identify assumptions, principles and conventions underlying financial reports as well as
the potential ethical issues in organizations.
Interpret and analyze financial reports.

Use cost and management accounting information in business decision-making.

COURSE MATERIAL AND INFORMATION

General information and study materials for the subject are available online through the
universitys blackboard web page. These include PowerPoint for lectures, answers to exercises /
assignments. You should access the page regularly for announcements and e-mail.

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AF2111-Accounting Concepts for Decision Making Subject Outline

TEXTBOOK & REFERENCES

Required Textbook:
Kimmel, Weygandt and Kieso, 2012, Accounting: Tools for Business Decision Making, 5 th
Edition, ISBN: 9781118128169.

Recommended References:

Weygandt, J & et al, 2012, Accounting Principles, 10th Edition, John Wiley & Sons, (Asia) Pte
Ltd.

Larson & Chiapetta, 2013, Fundamental Accounting Principles, McGraw-Hill Irwin.

Marshall, McManus & Viele, 2014, Accounting - What the Numbers Mean, McGraw-Hill
Irwin.

Dyson, J. R. 2010. Accounting for Non-Accounting Students, Financial Times Prentice Hall.

Useful Websites:
USA accounting standards (FASB): www.fasb.org
Hong Kong accounting standards (HKICPA): www.hkicpa.org.hk
International accounting standards (IASB): www.iasb.org.uk
(IAS Plus): www.iasplus.com

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AF2111-Accounting Concepts for Decision Making Subject Outline

TOPICAL COVERAGE

Understanding Accounting
- Why accounting matters
- What is accounting
- The building blocks
- The recording process
- The basics of adjusting entries
- The accounting cycle
- The financial statements
- The accounting rules (GAAPs)
- Internal control and corporate governance

Interpretation of Accounts
- The need for comparative analysis
- Tools of financial statement analysis
- Understanding the uses and limitations of the tools
- Gaining meaningful insights from the numbers

Managerial accounting concepts & techniques

- Understanding costs
- Costing techniques
- Tracking costs and ABC
- Cost of goods manufactured
- Cost-Volume-Profit Analysis
- Incremental Analysis
- Capital Budgeting

Accounting is interesting
- A case study of the preparation of financial statements

TEACHING/LEARNING APPROACH

A two-hour weekly lecture will be conducted to introduce the key issues and concepts of each
topic. The exposure to these issues and concepts is then reinforced by the weekly tutorial, which
provides a forum for discussion of assigned exercises and for resolution of problems arising
from lectures and readings.

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AF2111-Accounting Concepts for Decision Making Subject Outline

TENTATIVE TEACHING SCHEDULE

Topic Outline** for each week:

Week Date Chapter Topic Focus

1 20 Jan 1 Introduction to Financial -purpose and its use

Statements

2 27 Jan 2 Further Look at Financial -accounting assumptions and

Statements principles
-revenues, expenses, assets and
liabilities
-classified balance sheet

3 3 February 3 The Accounting -building blocks of accounting

Information System information system
-application of transaction
analysis

4 10 February 4 Accrual Accounting -cash and accrual accounting

Concepts -adjusting entries
-earnings management

5 17 February 5 Merchandising Operations -accounting for merchandising

and the Multiple-Step operations under perpetual
Income Statement
inventory approach

6 24 Feb 9 Long-Lived Assets -plant assets and intangible assets

-buy or lease
-implications of depreciation
method choice

7 10 March 12 Statement of Cash Flows -purpose and usefulness

-the indirect and direct approach
-free cash flow, current cash debt
coverage and cash debt coverage

8 17 March 13 Financial Analysis -tools of financial statement

analysis
-sustainable income and quality
of earnings
-horizontal and vertical analysis

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AF2111-Accounting Concepts for Decision Making Subject Outline

9 24 March 17 Activity-Based Costing -automation reduces the efficacy

of direct-labor based cost drivers
-machine-hour and plausible
drivers of costs
-multiple activity cost pools
-hierarchy of activity levels

10 31 March 18 Cost-Volume-Profit -variable and fixed costs

Relationships -contribution margin
-break-even analysis
-margin of safety

11 7 April 20 Incremental Analysis -incremental analysis applied in

make/buy or stop process/further
process decisions

12 14 April EASTER holiday

13 21 April REVISION

**Subject to the progress of student learning and the schedule may be changed

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AF2111-Accounting Concepts for Decision Making Subject Outline

Practice Assignment:
Each student is expected to work on some/all of the questions outlined below:
The Self-study Questions are multiple choice type questions to facilitate a quick review of the
objectives learned. The Questions offer students other perspectives of looking at the issues.
These are meant for a revision of the concepts learned when reading the textbook is not feasible
for some students. No recall of the answers to Questions is required in the examination. The
Brief Exercises display straight-forward and computational type of questions. The Do it!
Review exercises give students a quick recap of the key concepts covered in the chapter. The
Exercises build on the Brief Exercises and extend the concepts used in Brief Exercises to
tackle the issues. The Problems are more difficult questions requiring more thorough
understanding and therefore should be attempted after revision has been done. These
questions/exercises help reinforce and test students understanding of the topics. Solutions will
be given for all assigned questions/exercises.

End-of-chapter assignment grid for each topic

Week Cha Self-Study Questions Brief Do it! Exercises Problems Tutorial
pter Questions discussion
Exercises Review questions
1 Introduction
2 1 1 15 2, 9, 14, 1, 2, 4 - 2, 3 4, 9, 11, 1-5A Ex 1-9,
15, 18- 6, 8, 9 14 1-11, 1-
20 14
(P1-5A
not
required)

3 2 1 15 1, 2, 4, 5, 1, 2, 4, 1, 4 3, 4, 6, 2-2A, 2- Ex 2-4,
8, 10, 13, 10 12, 13 3A 2-6
15, 16,
18, 20
4 3 1 15 1 - 6, 8, 2 - 4, 8, 1-3 1 - 3, 5, 3-2A, 3- Ex 3-7,
10, 11, 12 6,7,8,14 3A 3-8, 3-14
12 P3-3A
5 4 1 15 1, 3, 4, 8, 1, 3, 6, 7 n/a 1, 2, 4, 5, 4-2A (c), Ex 4-12,
10 - 12, 8, 10, 12 4-3A (c) 4-3A (c)
15, 16,
24
6 5 1 14 6, 7, 8, 2-5, 1-3 1 - 3, 5- 5-5A Ex 5-5,
11, 14 6, 5-8(a), 5-
8(a),9(a) 9(a)
P5-5A
7 9 1 15 1, 2, 4, 7, 1 8 2, 3 58 9-3A Ex 9-5,
12, 19, 9-7, 9-8
20, 24, P9-3A
26

8 12 1 16 5-9, 12, 1 7, 11 1, 2 1 - 6, 12-9A Ex 12-

13 8(a) 8(a)
P12-9A

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AF2111-Accounting Concepts for Decision Making Subject Outline

Week Chapter Self- Questions Brief Do it! Exercises Problems Tutorial

Study Exerci Review discussion
Quest ses questions
ions
9 13 1 1, 3, 4, 8 1, 2, 4 2, 3 1, 5, 6, 9- 13-1A Ex 13-9,
17 11, 12, 15- 15 11 13-10, 13-
18, 20 11
P13-1A
10 17 1-12 7-19 2, 3, 6, 2 1, 3, 4 17-3A BE 12,
10, 12 Ex 3, 4
P17-3A
11 18 1 3 - 5, 8, 12 4 6, 1-4 1, 4 11 18-3A, Ex 18-8,
14 -17 8 12 18-4A 18-10, 18-
11
P18-3A
12 20 1 5 -12 5-8 1-4 2 17 20-2A Ex 20-2,
14 (a), (b) 20-3,
& (c) P20-2A
(a,b,c)
13 24** 3 - 13 7, 10, 11, 1, 3 - 9 1, 4 1, 2, 4, 5, 24-2A Ex 2, 4, 8
16 7, 8, 10

**Will not be covered as we have one week less.

In-Class Discussion and Participation:

Some of the Brief Exercises, Do-it Review and Exercises will be used as examples to
illustrate the issues discussed in class and to facilitate students learning. Each student is
expected to participate actively in class discussion.

Assessment:
Coursework
Quiz 20%
Analytical writing assignment 18%
Weekly tutorial assignments (total = 12 assignments) 12%

50%
Final examination 50%
Total 100%

You must pass both components of assessment, namely coursework and final examination to get
a pass in the subject.

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AF2111-Accounting Concepts for Decision Making Subject Outline

Quiz (20%):

There will be 4 quizzes on topics listed below. The quiz will be conducted during the following
dates (outlined below). Each quiz lasts for 25minutes. The format of the quiz will be based on 1
to 2 questions that have been discussed in the previous tutorials. You are advised to study the
questions outlined in the assignment grid (especially those under tutorial discussion
questions) to help prepare yourself for the quiz. Only the best three scores will be
aggregated to form the grade for this component. No make-up will be provided even a medical
certificate is submitted as only the best three scores out of four will be counted.

The remaining 25 minutes will be devoted to a discussion of the questions listed below:

QUIZ:
25 minutes
Week Date Chapter Topic Referenced Referenced
Questions Questions
4 tutorial 1 Introduction to Financial Ex 1-9, 1-11
class Statements
time
6 tutorial 2&3 Further look at F/Ss & The Ex 2-4, 2-6 Ex 3-7, 3-8,
class Accounting Information 3-14
time
System P3-3A
8 tutorial 4&5 Accrual Accounting Ex 4-12, 4- Ex 5-5, 5-
class Concepts & Merchandising 3A (c) 8(a), 5-9(a)
time
Operations P5-5A
10 tutorial 9 & 12 Reporting and Analyzing Ex 9-5, 9-7, Ex 12-8(a)
class Long-Lived Assets & 9-8 P12-9A
time
Statement of cash flows P9-3A

Analytical writing assignment (18%):

The analytical writing assignment consists of a written report on a case in which you will take
up the role of a management accountant for a firm. You have to logon to BB to download the
case materials and work on the analysis and calculations. The deadline for submission of the
hard copy is April 25, 2017 (MONDAY), which is after the end of the semester. You have to
indicate your name, tutorial time and your class register number (same as your weekly
assignment number) on the template.

Weekly tutorial assignments (12%)

Students are required to work on at least ONE tutorial discussion question after attending the
respective lecture and tutorial in the following week. Students will be given 1 mark (11 marks
for submitting 11 assignments) for submitting the assignment on or before the deadline even the
work done may not be completely correct.

There will be a bonus mark of 1 if you have submitted continuously throughout the 11 weeks
from week 2 to week 12.

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AF2111-Accounting Concepts for Decision Making Subject Outline

The first assignment will be due on 27th January 2017 (week 2, Friday). The tutor will provide
the solutions to chapter one assignment in week 3. Thereafter, the weekly assignment will be
due on each Friday and the solution will be provided in the subsequent week. All students
should submit their work on or before Friday 17:00 into the envelopes (labelled
according to class number and tutorial no) outside M754 (tutorial 1-
3) or Teresas office (M832a). No assessment will be provided after
the due dates.

Since April 14th 2017 (Friday) is a public holiday, the due date for the last assignment has been
brought forward to 23:59 on April 13th 2017 (Thursday) for chapter 20 discussion question(s).

Students will get back the assignments during the tutorial class in the following week.

You may download the weekly assignments from BB and check figures are
provided on some questions.

Please put down your name, student ID, tutorial class time, your class number
(sequence number on the attendance register) on the assignment.

Outline on Final Examination:

This is a CLOSED BOOK Examination. Short questions on selected topics will be asked in the
examination. An outline will be distributed in week 11.

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AF2111-Accounting Concepts for Decision Making Subject Outline

Criterion-Referenced Assessment:

A+ to A B+ to B C+ to C D+ to D F
Quiz Demonstrate a Demonstrate a Demonstrate an Demonstrate a Fail to
strong good acceptable minimum understand
understanding understanding understanding understanding the topics
of the topics of the topics of the topics of the topics

Individual - Demonstrate - Demonstrate - Demonstrate - Demonstrate - Fail to

writing a strong a good an acceptable a minimum understand
assignment understandi understanding understanding understanding the topic
ng of the of the topics of the topics of the topics
topics - Show a good - Show an - Show a - Fail to
- Show an level of acceptable minimal level demonstrate
exceptional analytical skills level of of analytical any
level of analytical skills skills analytical
analytical - Good writing skills
skills skills - Acceptable - Marginally -
- Excellent writing skills acceptable Unacceptable
writing skills writing skills writing skills

Weekly Submitted all Submitted at Submitted at Submitted at Submitted

Tutorial assignments least 80% least 60% least 50% less than 40%
Assignments assignments assignments assignments assignments

Examination Meet a Meet a Meet a standard Meet a Fail to meet

standard of standard of of acceptable standard of the standard
excellent good performance marginally for passing
performance performance acceptable the
performance examination

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