A survey of basic accounting theory and the application of accounting principles, this course includes the recording and summarization of business transactions in the form of financial statements under the rules of generally accepted accounting principles. (GAAP). It is designed for students who have little or no prior knowledge of financial accounting, this course corresponds to Principles of Accounting I at other colleges.
- Describe and explain the purpose of each of the three principal financial statements: balance sheet, income statement and statement of cash flows.
- Analyze and record common types of transactions (sales, cash receipts, purchases, cash disbursements, and the like)and complete all the steps in the accounting cycle.
- Differentiate between accrual and cash bases accounting, discuss the purpose of adjusting journal entries, and prepare appropriate adjusting journal entries for common types of accruals and deferrals.
- Apply the principles of internal control for cash.
- Differentiate between direct write off and allowance method of accounting for bad debts and prepare appropriate adjusting entries required under each method.
- Compare perpetual and periodic methods of accounting for inventory and apply alternative methods of costing inventory – FIFO, LIFO, and weighted average including the effects of each method on the financial statements.
- Determine the cost of plant assets, explain ‘depreciation’ in the context of accounting and apply commonly used depreciation methods, including straight line, declining balance, and output or activity method.
- Differentiate between short-term and long-term liabilities and properly classify various types of liabilities on the balance sheet.
- Explain the nature of and prepare appropriate journal entries for the issuance of stocks, declaration and payments/issuance of cash dividends/stock dividends, and treasury stock transactions.
- Analyze and interpret financial statements for decision making utilizing ratios and other techniques to determine the solvency, profitability, and stability of a business enterprise.
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