ACCT 1080 - Principles of Accounting 1

Objectives:

1. Define owner’s equity for a sole proprietorship.
2. Identify the effect of an accrual adjustment on the financial statement.
3. Identify an effect of the closing process in the accounting cycle.
4. Identify a liability account and how it is shown on the balance sheet.
5. Identify characteristics of a corporation.

Outcome 2: Upon completion of this course, students will be able to apply accounting techniques at an introductory level.

Objectives:

1. Identify accounts having a normal debit/or credit balance.
2. Make journal entries using the perpetual inventory system.
3. Compute ending inventory using Fifo, Lifo, WA
4. Compute the adjusted book balance regarding a bank reconciliation.
5. Compute depreciation expense using straight-line method of depreciation.

1. Explain why accounting is important and list the users of accounting information
2. Describe the organizations and rules that govern accounting
3. Describe the accounting equation and define assets, liabilities, and equity
4. Use the accounting equation to analyze transactions
5. Prepare financial statements
6. Use financial statements and return on assets (ROA) to evaluate business performance

Recording Business Transactions

1. Explain accounts as they relate to the accounting equation and describe common accounts
2. Define debits, credits, and normal balances using double-entry accounting and T-accounts
3. Record transactions in a journal and post journal entries to the ledger
4. Prepare the trial balance and illustrate how to use the trial balance to prepare financial statements
5. Use the debt ratio to evaluate business performance

The Adjusting Process

1. Differentiate between cash basis accounting and accrual basis accounting
2. Define and apply the time period concept, revenue recognition, and matching principles
3. Explain the purpose of and journalize and post adjusting entries
4. Explain the purpose of and prepare an adjusted trial balance
5. Identify the impact of adjusting entries on the financial statements

Completing the Accounting Cycle

1. Prepare the financial statements including the classified balance sheet
2. Explain the purpose of, journalize, and post closing entries
3. Prepare the post-closing trial balance
4. Describe the accounting cycle
5. Use the current ratio to evaluate business performance

Merchandising Operations

1. Describe merchandising operations and the two types of inventory systems
2. Account for the purchase of merchandise inventory using a perpetual inventory system
3. Account for the sale of merchandise inventory using a perpetual inventory system
4. Adjust and close the accounts of a merchandising business
5. Prepare a merchandiser’s financial statements
6. Use the gross profit percentage to evaluate business performance

Merchandise Inventory

1. Identify accounting principles and controls related to merchandise inventory
2. Account for merchandise inventory costs under a perpetual inventory system
3. Compare the effects on the financial statements when using the different inventory costing methods
4. Apply the lower-of-cost-or-market rule to merchandise inventory
5. Measure the effects of merchandise inventory errors on the financial statements
6. Use inventory turnover and days’ sales in inventory to evaluate business performance

Internal Control & Cash

1. Define internal control and describe the components of internal control and control procedures
2. Apply internal controls to cash receipts
3. Apply internal controls to cash payments
4. Explain and journalize petty cash transactions
5. Demonstrate the use of a bank account as a control device and prepare a bank reconciliation and related journal entries
6. Use the cash ratio to evaluate business performance

Receivables

1. Define and explain common types of receivables and journalize sales on credit, credit card sales, and debit card sales
2. Apply the direct write-off method for uncollectibles
3. Apply the allowance method for uncollectibles and estimate bad debts expense based on the percent-of-sales, percent-of-receivables, and aging-of-receivables methods
4. Account for notes receivable including computing interest and recording honored and dishonored notes
5. Use the acid-test ratio, accounts receivable turnover ratio, and days’ sales in receivables to evaluate business performance

Plant Assets, Natural Resources, & Intangibles

1. Measure the cost of a plant asset.
2. Account for depreciation using the straight-line, units-of-production, and double-declining-balance methods
3. Journalize entries of the disposal of plant assets
4. Account for natural resources
5. Account for intangible assets
6. Use the asset turnover ratio to evaluate performance

Current Liabilities & Payroll

1. Account for current liabilities of known amount
2. Calculate and journalize basic payroll transactions
3. Account for current liabilities that must be estimated
4. Account for contingent liabilities
5. Use the times-interest-earned ratio to evaluate business performance

Long-Term Liabilities

1. Journalize transactions for long-term notes payable and mortgages payable
2. Describe bonds payable
3. Journalize transactions for bonds payable and interest expense using the straight-line amortization method
4. Journalize transactions to retire bonds payable
5. Report liabilities on the balance sheet
6. Use the debt to equity ratio to evaluate business performance

Corporation

1. Identify the characteristics of a corporation
2. Journalize the issuance of stock
3. Account for the purchase and sale of treasury stock
4. Account for cash dividends, stock dividends, and stock splits
5. Explain how net income and equity are reported for a corporation
6. Use earnings per share, rate of return on common stock, and the price/earnings, ratio to evaluate business performance