Financial Accounting

Course instructor
Raveesh Krishnankutty 1, PGDM, A and C raveesh@rajagiri.edu
Dr. Minimol M.C. 1, PGDM, B minimol@rajagiri.edu

About the Course

The role of accounting is to provide information to investors, policy-makers, regulators, and other
decision-makers to facilitate the allocation of resources in society. The purpose of this course is to
understand the accounting process and to develop skills necessary to evaluate an enterprise’s financial
position. The accounting course will emphasis on these two viewpoints

1. What the user of accounting information needs to know about financial accounting
2. What the preparer of accounting information needs to know about financial accounting

The course gives students the necessary background to: (a) understand the concepts and
measurements that underlie financial statements, (b) develop the skills needed to analyze financial
statements effectively, and (c) gain an understanding of the choices enterprises make in reporting the
results of their business activities.

Course learning objectives

CLO-1: Describe the purpose of financial reporting and identify the primary financial
statements.
CLO-2: Identify and explain the steps in book keeping in accrual basis using journal entries,
ledgers and trial balance and to learn how the accounting cycle is completed using
adjusting entries, financial statements and closing entries.
CLO-3: Prepare income statement, balance sheet and statement of stockholders’ equity.
CLO-4: Outline the structure of cash flow statement with detailed reporting of the three
main categories of the cash flow statement: operating, investing, and financing.
CLO-5: Understand - classification, valuation and accounting for inventory. valuation and
presentation of receivables, fixed assets and depreciation
CLO-6: Learn how financial statement analysis is done using ratio, time series and common
size analysis.

Session Plan
Session Topics Reading Methodology
AHM Lecturing with
Nature and purpose of accounting, major financial
Chapter-1 PPT
1-2 statements, what is financial accounting and how it is
WKK
different from cost and management accounting.
Chapter-1,
AHM Case:
Introduction to basic accounting concept and financial Chapter-1 Can you help
3-4
statement (AS1,AS 5 and IAS1) WKK Ajay?
Chapter-1,
Use of accounting concepts( business entity, going AHM Case:
concern, dual aspect, money measurement and cost Chapter-2, Music Mart,
5-6
concept) in preparation of balance sheet using WKK Inc.
accounting equations Chapter-4

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Session Topics Reading Methodology

Use of accounting concepts( accounting period, AHM Case : Diarelief
conservatism matching, realization, consistency and Chapter-3,
7-8
materiality)in preparation of income statement using WKK
accounting equations Chapter-3
The recording process, debits and credits and their use Case: PC Depot
AHM
in recording business transactions and journal and how
Chapter -4
9-10 it helps in the recording process. Time period
WKK
assumption, accrual basis of accounting, reasons and
Chapter 2
major types of adjusting entries. Closing entries
AHM Individual
Ledger and posting and how it helps in the recording
Chapter -4 Assignment-1
11-12 process. Trial balance and explain its purposes.
WKK
Preparation of income statement and balance sheet
Chapter 2
AHM Exercises
Distinguish among operating, investing, and financing Chapter -11
13-14
activities.(AS3 and IAS 7) WKK
Chapter 17
Prepare a statement of cash flows using the indirect AHM Case:
method. Assess a firm’s financial strength by analyzing Chapter -11 Amerbran
15-16
the relationships among cash flows from operating, WKK Company(A)
investing, and financing activities. Chapter 17
Explain the accounting for inventories, inventory cost AHM Exercises
flow methods, its financial effects and assumptions. Chapter -6 Case : Lewis
17-18
Inventory valuation and accounting standard for WKK Corporation
inventory(AS2 and IAS2) Chapter 6
Case:
AHM
1.Stern
Receivables – types, recognition, valuation and Chapter -5
19-20 Corporation,(A)
presentation of receivables( AS9 and IAS18) WKK
2. Joan
Chapter 9
Holtz(A)
Long lived assets: fixed assets, natural resources and Case:
intangible assets – cost principle – concepts of AHM Stafford press
depreciation, depletion and amortization – disposal of Chapter -7
21-22
fixed assets - accounting standards on fixed assets, WKK
natural resources and intangible assets (AS6,AS10 and Chapter 10
IAS16)
AHM Lecture,
Analyzing firms performance using liquidity, Chapter -13 Exercises
23-24
profitability, activity solvency and valuation ratios WKK
Chapter 18
Comparative analysis, horizontal analysis, vertical WKK Lecture,
25-26
analysis Chapter 18 Exercises
Concept of quality of earnings – concept of earnings Lecture
WKK
27-28 power – irregular items - discontinued operations and
Chapter 18
extraordinary items
difficulties associated with financial statement analysis Lecture
WKK
29-30 treatment of irregular items under different
Chapter 18
accounting standards

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References/Books
i. Accounting Principles 12E, Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, John Wiley &
Sons, Inc. (WKK)
ii. Accounting Text and Cases 13E (Indian) Robert N Anthony, David F. Hawkins, Kenneth A.
Merchant McGraw Hill Education. (AHM)
iii. Intermediate Accounting, 17E, Earl K. Stice, James D. Stice, K. Fred Skousen South-Western
Cengage learning (SSS)
iv. Financial and Management Accounting. T.S. Reddy, Y Hari Prasad Reddy. Margham
Publications (TSR).
v. Corporate Accounting 3E, S N Maheshwari, Vikas Publishing House.

Grading Structure
Evaluation tool Marks
Individual Assignment 15
Mid-term examination 20
Quiz 15
Project 15
Attendance 5
End term examination 30
Total 100 marks

Evaluation Tools other than Examinations

Assignments: a) The student need to write down the solution of numerical problems and submit
through QAIMC. b) The student need to analyze the case study and write down the appropriate
solution with working and justification and submit through QAIMC .One among the two type of
assignment will be asked to perform on individual basis.

Quiz: The quizzes will be conducted through Moodle®. User overrides will be at the discretion of
the course instructor. Quizzes will have a mix of multiple choice and short answer questions. Prior
notice regarding quizzes will not be given by the instructor.

Project: There will be three parts of project.

Individual report-1: The faculty will assign an industry to a group of six students. Each student need
to select a company from the industry and discuss the way its financial statement are presented
in the annual report. The hand written report has to be submitted through QAIMC.
Individual report-2: The students need to analysis the performance of the company selected by
them using ratio analysis with previous 5 years data. They need to submit the assignment as MS
excel worksheet through Moodle.
Group Presentation: The students need to do a comparative analysis of the companies within the
group and present the same with the help of PowerPoint.

Course policies
Please refer student guidelines

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Assignment/presentation…. Schedule
Date Assignment/presentation Due date
Session 11 Individual Assignment Session 14
Session 16 Quiz Session 20
Session 20 Project : Individual report 1 Session 22
Session 24 Project : Individual report 2 Session 27
Session 29 Project : Group presentation Session 30

Course requirements and Prerequisites

The students are expected to maintain a separate folder with all their class files for this course.
Student may be asked to submit their folder through the academic office for class participation
assessment purposes.

The students shall access Moodle and make used of readings and cases posted.

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