ACCT 1090 - Principles of Accounting 2
Credit Hours: 4.00
Prerequisites: ACCT 1080
Continuation of financial accounting and introduction to managerial accounting. Topics include statement of cash flow, statement analysis, accounting for a manufacturing concern, cost-volume-profit relationships, and budgeting.
Contact Hours: 4
Billable Contact Hours: 4
OUTCOMES AND OBJECTIVES
Outcome 1: Upon completion of this course, students will be able to identify accounting theory at an introductory level.
- Identify how depreciation expense would be used in a cash flow statement under the indirect method.
- Identify the relevant information for a special business decision.
- Identify how changes in volume affect costs.
- Distinguish financial accounting from management accounting.
- Distinguish among operating, investing, and financing cash flows.
Outcome 2: Upon completion of this course, students will be able to apply accounting techniques at an introductory level.
- Using financial ratios, compute the acid-test ratio for a given year.
- Compute the ending balance in the work in process inventory account.
- Compute the number of units that must be sold to earn a targeted operating income.
- Compute the budgeted cash collections from customers for a given month
- Compute the accounting rate of return on an investment.
COMMON DEGREE OUTCOMES
(Bulleted outcomes apply to the course)
- 1. The graduate can integrate the knowledge and technological skills necessary to be a successful learner.
- 2. The graduate can demonstrate how to think competently.
- 3. The graduate can demonstrate how to employ mathematical knowledge.
- 4. The graduate can demonstrate how to communicate competently.
- The graduate is sensitive to issues relating to a diverse, global society.
COURSE CONTENT OUTLINE
The Statement of Cash Flow
- Identify the purposes of the Statement.
- Distinguish among operating, investing, and financing flows.
- Prepare the statement by the direct method. (Appendix 1A)
- Prepare the statement by the indirect method.
Financial Statement Analysis
- Explain how financial statements are used to analyze a business.
- Perform a horizontal analysis of financial statements.
- Perform a vertical analysis of financial statements.
- Compute and evaluate the standard financial ratios.
- Complete a corporate income statement including earnings per share (Appendix 2A).
Introduction to Managerial Accounting
- Define managerial accounting and understand how it is used.
- Classify costs for service, merchandising, and manufacturing companies.
- Prepare an income statement and schedule of goods manufactured for a manufacturing company and calculate cost per item.
- Calculate cost per service for a service company and cost per item for a merchandising company.
Job Order Costing
- Distinguish between job order costing and process costing.
- Record materials and labor costs in a job order costing system.
- Calculate the predetermined overhead allocation rate and allocate overhead costs.
- Record the completion and sales of finished goods.
- Adjust for over allocated and under allocated overhead.
- Calculate job costs for a service company.
- Calculate equivalent units of production for direct materials and conversion costs.
- Prepare a production cost report using the weighted-average method.
- Prepare journal entries for a process costing system.
- Use a production cost report to make decisions.
- Determine how changes in volume affect costs.
- Calculate operating income using contribution margin and contribution margin ratio.
- Use cost-volume-profit (CVP) analysis for profit planning.
- Use CVP analysis to perform sensitivity analysis.
- Use CVP analysis to calculate margin of safety, operating leverage, and multiproduct breakeven points.
- Describe budgeting objectives, benefits, and procedures and how human behavior influences budgeting.
- Define budget types and the components of the master budget.
- Prepare an operating budget for a manufacturing company.
- Prepare a financial budget for a manufacturing company.
Flexible Budgets and Standard Costs Systems
- Prepare flexible budgets and performance reports using static and flexible budgets.
- Identify the benefits of a standard cost system and understand how standards are set.
- Compute the standard cost variances for direct materials and direct labor.
- Compute the standard cost variances for manufacturing overhead.
- Describe the relationship among and responsibility for the product cost variances.
- Record transactions in a standard cost system and prepare a standard cost income statement.
Cost Allocation and Responsibility Accounting
- Assign direct costs and allocate indirect costs using predetermined overhead allocation rates with single and multiple allocation bases.
- Explain why companies decentralize and use responsibility accounting.
- Describe the purpose of performance evaluation systems and how the balanced scorecard helps companies evaluate performance.
- Use responsibility reports to evaluate cost, revenue, and profit centers.
- Use return on investment (ROI) and residual income (RI) to evaluate investment centers.
Short-Term Business Decisions
- Identify information that is relevant for making short-term decisions.
- Make regular and special pricing decisions.
- Make decisions about dropping a product, product mix, and sales mix.
- Make outsourcing and processing further decisions.
Chapter 11. Capital Investment Decisions
- Describe the importance of capital investments and the capital budgeting process.
- Use the payback and the accounting rate of return methods to make capital investment decisions.
- Use the time value of money to compute the present values of lump sums and annuities.
- Use discounted cash flow methods to make capital investment decisions
Official Course Syllabus - Macomb Community College, 14500 E 12 Mile Road, Warren, MI 48088
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