Course Overview:
Accountancy is the process of communicating financial information about a business entity
to various stakeholders. The communication is generally in the form of financial statements
that show in monetary terms, the economic resources under the control of management. The
American Institute of Certified Public Accountants (AICPA) defines accountancy as "the art of
recording, classifying, and summarizing in a significant manner and in terms of money,
transactions and events which are, in part at least, of financial character, and interpreting the
results thereof."
Early accounting, popularly known as Stewardship Accounting, served mainly to assist the
memory of the businessperson and the audience for the account was the proprietor or
record keeper alone. The development of joint stock companies created wider audiences
for accounts. This was because the companys investors without first hand knowledge of its
operations relied on accounts to get the requisite information. Today, accounting is called "the
language of business" because it is the vehicle for reporting financial information about a
business entity to many different groups of people. Accounting that focuses on reporting to
people inside the business entity is called management accounting and is used to provide
information to employees, managers, owners and auditors. Management accounting is concerned
primarily with providing a basis for management or operating decisions.
Accounting that provides information to people outside the business entity is called financial
accounting and provides information to present and potential shareholders, creditors such as
banks or vendors, financial analysts, economists, and government agencies. Because these
users have different needs, the presentation of financial accounts is very structured and
subject to many more rules than management accounting. The body of rules that governs
financial accounting in a given jurisdiction is called Generally Accepted Accounting Principles,
or GAAP.
In this course students are not only exposed to domestic accounting practice and regulation
but are also exposed to International Financial Reporting Standards (IFRS). The major
objective of this course is to develop an understanding of the concepts, principles and
conventions upon which financial accounting is based, and more importantly to provide an
analytical basis upon which financial statements can be interpreted intelligently.
Consideration will be given to accounting techniques and the formulation of financial
reports; however, the course will focus on understanding accounting concepts, their rationale
and the implications for users of the financial accounting information. The course also
emphasizes on how general purpose financial statements communicate information about the
business corporations performance and position to users external to management. Also, the
course case studies will help the student to learn that accounting is not a cut-and-dried subject
with all of its answers clearly indicated by the application of rules.
The first module of the course describes and discusses how the accountant processes and
presents the information. It includes exposure to recording transactions, adjusting balances and
preparing financial statements for various firms according to the established rules and
procedures. The second module of the course examines major elements of the statements
such as cash, receivables, inventory, longlived assets, depreciation, and other liabilities.
Analysis and interpretation of the financial statements using ratios as the tool is dealt in detail in
module 3 while, the last module deals with estimating and analyzing cash flows of business
entities.
Learning Outcomes:
After undergoing this course, the students will be able to:
1. Understand financial statements from the perspective of preparer as well as the users.
(LO1)
2. Comprehend and estimate the individual items of financial statements. (LO2)
3. Analyze & interpret financial Statements for decision-making. (LO3)
List of Topics/ Modules
Topic/ Module
Contents/ Concepts
Module-4: Estimating and Analyzing Cash Cash flow statement: purpose, objectives and structure,
Flows
determination of cash flows from various business
activities and their interpretations.
Component
Group
Assignment
Description
Each group would scan the annual report of a company which will be
allocated to them in the 3rd session of the course. Students in their
study group are individually required to analyze the assigned section
of the report and discuss the same with the other group members.
Presentations followed by a viva-voice will be taken for the same
between 20-24 sessions. The structure of viva-voice would be such
that students will be asked questions from the sections assigned to the
other members of the study group and not from the section assigned to
them. One report per group would be submitted in 22nd session.
Weig
ht
0.20
0.10
0.10
0.20
0.40
Session Plan:
Session
Topic
Requirements:
Cases
Discussions
Ch. 1 pg. 14-25, pg.36-41
Understanding of
accounting Environment.
(LO1)
2.
Knowledge of accounting
treatment of business
transactions. (LO1)
Accounting equation
Knowledge of accounting
treatment of business
transactions. (LO1)
Income measurement,
converting cash to accrual,
adjustment entries.
Understanding income
related concepts and cash &
accrual basis of accounting.
(LO1)
Understanding of P&L
statement concepts and
format. (LO1)
Understanding cash
Statements. (LO1)
flow
10
11
12
Liabilities in perspective,
classification of liabilities:
current liabilities, non-current
liabilities, contingent
liabilities and deferred tax.
13
15
Discussions
Ch.11 Pp. 478-493
Overview of financial
statement analysis and its
techniques. (LO3)
16
17
Analyzing information
Guest Talk
beyond financial statements.
Analyzing information
beyond financial statements
for the purpose of decision
making. (LO3)
19
20
21
22
23
24
Contact Details:
Name of the Instructor:
Office Location:
Telephone:
9929344229 / 9602274367
Email:
bhupendra.hada@jaipuria.ac.in/ babita.parmar@jaipuria.ac.in
Teaching Venue:
Office Hours: