Course Description

This course is a continuation of College Financial Accounting I, with an emphasis on advanced financial accounting topics and introductory managerial accounting. It covers accounting for partnerships and corporations, long-term liabilities, investments, and the preparation and analysis of the statement of cash flows. The course also introduces students to financial statement analysis and managerial accounting concepts, including cost-volume-profit analysis, budgeting, standard costing, and capital budgeting. Students will gain the analytical and practical skills necessary for decision-making in both financial and managerial accounting environments.

 

Course Objectives

Upon successful completion of this course, students will be able to:

• Apply advanced accounting procedures for partnerships and corporations.

• Account for stock transactions, retained earnings, and dividend policies.

• Understand and apply accounting methods for long-term liabilities and inter-company investments.

• Prepare and analyze the statement of cash flows using both direct and indirect methods.

• Use financial ratios and comparative analysis to evaluate financial performance.

• Identify and classify manufacturing costs and prepare cost-related financial statements.

• Apply cost-volume-profit analysis for planning and decision-making.

• Prepare operating and financial budgets and interpret standard cost variances.

• Evaluate capital investment decisions using common appraisal methods.

 

Course Learning Outcomes

By the end of the course, students will be able to:

1. Record and analyze partnership formation, distribution of income/loss, and dissolution.

2. Account for corporate equity transactions, including stock issuance, dividends, and treasury stock.

3. Prepare and interpret corporate income statements with earnings per share and irregular items.

4. Analyze and account for bond issuance, amortization, and retirement.

5. Prepare statements of cash flows and perform financial statement analysis using ratios and trend analysis.

6. Distinguish between product and period costs, and compute cost of goods manufactured and sold.

7. Apply break-even and contribution margin analysis to business scenarios.

8. Develop and manage operating budgets and evaluate performance using standard costing techniques.

9. Make informed business decisions using incremental analysis and capital budgeting methods.

 

Recommended Course Materials

• Textbook: Financial & Managerial Accounting by Carl Warren, Jefferson P. Jones, and William Reeve

• Workbook/Problem Sets (as assigned by the instructor)

• Financial Calculator or Spreadsheet Software (e.g., Excel)

• Supplementary Readings: Selected case studies and industry reports

• Access to online accounting simulation tools (optional)

 

Course Content

​

1. Accounting for Partnerships

• Characteristics and formation

• Income/loss distribution

• Dissolution and liquidation procedures

2. Corporate Accounting

• Corporate formation, stockholders’ equity

• Stock types, dividends, treasury stock, stock options

• Stock splits and retained earnings

• Issuance of stock for cash/non-cash assets

3. Corporate Income Statement & Retained Earnings

• Corporate reporting elements

• Discontinued operations, extraordinary items, changes in accounting

• Earnings per share (EPS)

• Statement of stockholders' equity

4. Long-Term Liabilities

• Bonds payable at par, premium, discount

• Present value calculations

• Amortization (straight-line & effective interest methods)

• Bond retirement and conversion

5. Inter-Company Investments

• Non-influential, influential, and controlling investments

• Bond transactions, amortization, and sales

6. Statement of Cash Flows

• Purpose and users

• Operating, investing, and financing activities

• Direct and indirect methods of preparation

7. Financial Statement Analysis

• Horizontal, vertical, and trend analysis

• Ratio analysis: liquidity, profitability, solvency

• Evaluation of cash flow adequacy and earnings quality

8. Introduction to Management Accounting

• Manufacturing cost elements

• Inventory classification and valuation

• Product vs. period costs

• Cost of goods manufactured and sold

9. Cost-Volume-Profit Analysis

• Fixed, variable, and mixed costs

• Contribution margin and break-even point

• Application in service and manufacturing environments

10. Responsibility Accounting and Budgeting

• Organizational structure and accountability

• Budget preparation: master, operating, and financial budgets

• Cash budgets and implementation strategies

11. Standard Costing and Performance Evaluation

• Developing and applying standard costs

• Variance analysis: materials, labor, overhead

• Recording and interpreting variances

• Evaluation of departmental performance

12. Decision-Making and Capital Budgeting

• Relevant costing and strategic planning

• Special decisions: make-or-buy, special orders

• Capital budgeting: payback, ARR, NPV, and other methods

 

Course Assessment & Evaluation

• Class Participation and Homework – 10%

• Midterm Examination – 40%

• Final Examination – 50%