FINANCIAL ACCOUNTING-I

FINANCIAL ACCOUNTING-I
AREA OF STUDY: CORE
BBA-101

Year: 1
Semester: 1

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* Continuous
** Duration: 3 hours

Course Objectives
The core objective of teaching Financial Accounting to BBA students is to enable them to record and report business transactions with a clear understanding of basic financial statements. The course focuses on understanding the basic financial statements and the use of financial statements from different stakeholder's decision perspectives.
Course Contents
Unit 1: An Overview of Financial Accounting L.H.5
Accounting as an Information System and Language of Business; Users of Accounting Information; Functions and Limitations of Financial Accounting; Principal Financial Statements; Elements of Financial Statements; Accounting Equation, Analysis of Transactions, Accounting Cycle and Accounting Methods(Cash Basis and Accrual Basis).
Unit II: Basic Accounting Concepts and Conventions L.H.3
a. Basic Accounting Concepts; Business Equity Concept, Money Measurement Concept, Dual-aspect (Accounting Equation Concept) Going Concern Concept, Accounting Periods Concept, Historical Cost Concepts; Realization Concept, Accrual Concept, and Matching Concept.
b. Basic Accounting Conventions: Conservatism (Prudence), Full disclosure, consistency and Materiality.
c. Generally accepted accounting Principles (GAAP) and Financial Reporting Environment.
Unit III: Preparation of Financial Statement L.H.11
a. Rules for Debit and Credit
b. Journalizing, Posting in Ledgers ('T' Accounts and Self Balancing Ledgers)
c. Preparation of Unadjusted Trial Balance
d. Concept of Capital and Revenue Items
e. Closing Entries
f. The Income Statement (P/L A/C)
g. The Statement of Retained Earnings
h. The Balance Sheet
i. Use of Work sheet to Complete Accounting Cycle
Unit IV: Accounting for Inventory L. H. 5
a. Inventory Systems- Periodic and Perpetual
b. Inventory Valuation Methods- FIFO, LIFO, Weighted Average
c. Impact of Different Methods on Cost of Goods Sold and Profit.
Unit V: Accounting for Cash L. H. 3
a. Cash Book and Bank Statement
b. Bank Re-conciliation Statement
Unit VI: Accounting for Fixed Assets and Depreciation L. H. 5
a. Acquisition of Plant, Property and Equipments
b. Depreciation Methods- Straight Line Method and Written Down Value Method
c. Disposal of Fixed Assets
Unit VII: Cash and Funds Flow Statements L.H. 10
a. Preparation of the Statement of Cash Flow (Direct and Indirect Method)
b. Preparation of the Statement of Funds Flow (working Capital Basis)
Unit VIII: Corporate Reports and Analysis L. H. 6
a. Concept of Corporate Annual Reports
b. Analysis of Corporate Common Size Statements
c. Ratio Analysis- Liquidity, Solvency, Efficiency (Turnover), and Profitability
d. Uses of Ratios for Different Stakeholders' Point of View
Suggested Readings:
1. Porter, Gary A. and Norton, Curtis L.: Financial Accounting: The Impact on Decision Makers, Harcourt College Publishers, Orlando.
2. Narayanswamy, R.: Financial Accounting: A Managerial Perspective, Prentice Hall of India (P.) Ltd., New Delhi.
3. Sharma Narendra: Financial Accounting, Buddha: Financial Accounting, Buddha Academic Enterprises (P) Ltd. Kathmandu (1st Edition).