BUSI 106: Financial Accounting

Course Description

This course provides an introduction to financial accounting, a system that collects and processes financial information about an organization and reports that information to decision makers. The decision makers include investors, financial analysts, creditors, governmental units, and a wide array of people who have a stake in the success of the organization. Financial accounting is a comprehensive function that involves analyzing, measuring (both objective and subjective), recording, and reporting financial information about a company or not-for-profit organization.

Every public company ("public" means that it sells stock publicly) and most private companies use financial accounting in an attempt to measure the value of their operations and of the entity at a given point in time. Financial accounting reports attempt to answer the questions: "How well did we do this past year?" and "What is our company worth right now?"

The information captured by financial accounting is conveyed in financial statements that include three reports: the balance sheet, income statement, and statement of cash flows. By examining these statements, one can gain valuable insights about the details of the company's performance. For example, one could learn how much of a company's accounts receivable are likely to be collected, how much the company pays its top executives, and how and where the company is expanding, among other information.

Managers, competitors, investors, and regulatory bodies such as the Securities Exchange Commission are all privy to the financial statements of public companies. These users carefully interpret financial statements and use their findings as the basis for important business decisions.

The goal of this course is for you to develop a solid, basic understanding of the fundamentals of financial accounting through the identification and examination of the key concepts and methodologies used in the field. Additionally, we will consider the impact of these concepts and methodologies on the use of financial statements by both managers and public investors. This course is intended for students with no prior exposure to accounting or financial statements, and does not require significant exposure to the general business world. It will provide a basic accounting foundation for students who may later seek a career in marketing, management, finance, banking, manufacturing, human resources, and, of course, accounting.

Accounting is a challenging course because it requires precision in the recording, summarizing, and reporting of the business transactions a company engages in. These transactions must be reported accurately and consistently from period to period. It could be said that accounting is "unforgiving" in this respect, and many students find it a challenge to carefully and consistently "tend to the details." You should allow yourself plenty of time to complete the homework assignments, and keep in mind that exam questions that require numerical calculations will have a single correct numerical answer.

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Required Text

Libby, Libby, and Short, Financial Accounting, 5th edition (2006)

The text can be obtained from the Higher Grounds bookstore at the Friday Center either by ordering online or by printing and mailing the book order form.

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Course Goals

This course is essentially broken into four main parts with an evaluation at the end of each part.

The goal of Part I is to develop an overall understanding of the function of financial accounting. The balance sheet and income statement, as well as the recording and adjusting processes, will be introduced. This part ends with Quiz 1.

In Part II we take a closer look at the reporting for revenue and other assets, both short term and long term. This part ends with Quiz 2.

In Part III we will cover the liability and owners' equity accounts. Part III also includes the cash flow statement--the final financial statement that we will be examining. This part ends with Quiz 3.

In Part IV, we will wrap up the course and tie together everything we have learned by using this knowledge to analyze a specific company's financial position. For your final assignment, you will be given a comprehensive case where you will be looking at specific accounts to reach an overall financial assessment of the company.

As you can see, the course is varied in that we will be looking at both the mechanics of financial accounting and the larger concepts as well. In Parts I and IV, we are flying above the financial accounting forest where we see three basic financial statements and the role they play in business decision making. In Parts II and III, we are cruising through the forest looking at specific balance sheet and income statement accounts. Throughout the course, timely accounting issues such as fraudulent reporting of revenue will be considered.

These themes are pervasive in the four specific goals for students in the course, each of which is covered in sequence in the four parts of the course:

1. Understand the fundamentals of financial accounting, including its function, the balance sheet, the income statement, and the accrual recording process.
2. Learn to account for revenues, expenses, and assets and to recognize relevant issues.
3. Learn to account for liabilities and owners' equity. Understand the statement of cash flow.
4. Incorporate new knowledge and key financial ratios into financial analysis.

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Course Requirements

This course consists primarily of readings, problems, and some quizzes. Additionally, you will be required to participate in a discussion forum throughout the semester and a final comprehensive case will be assigned at the end of the semester.

The readings develop the background for understanding the fundamental elements of financial accounting, how they are accounted for, and their effect on management planning.

The homework problems are exercises that focus on the mechanics of financial accounting.

The discussion forum serves as a means of exchanging views on important emerging issues that relate to the topics we will be covering.

The quizzes will ensure your comprehension of the concepts from the text and the homework problems.

The final case involves a review of the mechanics covered throughout the semester and a big-picture analysis of what these details reveal about the selected company's financial situation.

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Grading

The graded portion of the course is based on your performance on the following:

• homework problems (40 percent total)
• three quizzes (15 percent each = 45 percent total)
• final case (10 percent)
• participation in the discussion forum (5 percent)

Homework problems

Each lesson will require you to complete several problems and submit these to me by e-mail attachment. There will be thirteen homework assignments worth 3 points each. The grading will focus on both effort and accuracy.

Submitting your homework: Please submit homework assignments to me in an e-mail with the subject line in the following format: BUSI 106 yourlastname, yourfirstname-HW#X. Please use Microsoft Word for the file you turn in. If you use Microsoft Excel to do your work, please copy this work into a Word file and then turn it in. In all cases, turn in only one file for a particular homework assignment. Also, make sure your name is at the top of the first page of the Word file.

Your homework is due by 5 pm Friday of each week (unless otherwise specified in the lesson). Unexcused late assignments will receive no credit. A link to the solutions for the homework problems will be provided in the Blackboard "Homework Solutions" section at 6 pm each Friday, which is one hour after the time they are due.

Participation in the discussion forums

Participation will be evaluated based on the quality of items you submit to the forums as required. A good submission to a forum will reflect a thorough familiarity with the current discussion forum topic, showing that you have read the relevant materials, considered them carefully, weighed all sides to the argument, and formed an opinion--or at least that you see why people have differing opinions on the topic. Some of the discussion forum topics may seem a little difficult, so please feel free in your submissions to highlight areas that are confusing to you. There will be six discussion forums where you post assignments, with the first serving for practice, so only five will be graded. Each discussion forum is worth one point. If you submit a posting of appropriate length (see below) that presents good ideas, you will receive one point. If you make no submission at all or one that is of poor quality and reflects little effort, you will receive no credit.

Quizzes

There are three quizzes; each is worth 15 percent of your grade and consists of thirty multiple-choice questions. Since homework problems and discussion forum entries will be graded on effort, the goal of the quizzes is to test your mastery of the concepts we cover. The quizzes will be a mix of calculation-type problems and conceptual questions. The quizzes will be open book and open notes, but you must not receive help from another person.

You will take your multiple-choice quizzes on the Blackboard site. See Course Mechanics for information on accessing Blackboard.

The quizzes will be available for a three-day period (noted on the schedule below), but you must complete the quiz within 90 minutes of the time you access the quiz. Blackboard indicates whether students exceed the time limit. In accordance with the Honor Code, you may neither give nor receive any help on these quizzes.

Final comprehensive case

The final assignment of the course is a single integrative case that will involve both quantitative and qualitative aspects. This case assignment takes the place of a final exam and will be available in the "Final Case" section of Blackboard on the date indicated in the course schedule below. There will be no discussion forum for the final case, and each student is expected to work independently on this case. The solution for the final case will be available in the "Final Case" section of Blackboard after the due date (see the course schedule).

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Discussion Forums

You should participate in each discussion forum assignment. The forum will facilitate "classroom" discussion on emerging issues that relate to topics we will be covering. View the discussion forum as your opportunity to "raise your hand" and make a point as if you were in a classroom. The nature of your participation can be varied, just as it would be in a typical classroom:

1. Point out some important aspect of the issue or concept for the forum, that is, how you see the issue potentially impacting management's decisions, potential implementation problems, and so forth. You will get credit for the idea as it appears on the discussion forum. If that idea appears in many of the written assignments of the other students, you and the class will have validation of the importance of your idea, and you will get credit for that. However, original thoughts (that are also relevant) are strongly encouraged.
2. Ask a thought-provoking question about the current discussion forum topic. For example, raise additional issues that you feel are relevant when evaluating the current topic.

Discussion forum postings must be made during the lesson period in which they are assigned (lesson dates are indicated at the top of each lesson page). The discussion forum topics are explained on the Web pages for that specific lesson. You will access the discussion forum via the Blackboard site. Although the postings to the forums will still be available for your review, postings made after end of the lesson period will not be considered for grading. The recommended length for each response is 250-350 words. In order for you to get a better idea of how to respond on the discussion forums, the first one (in Lesson 1) will be for practice. I will give you feedback on this practice discussion forum, and the graded discussion forums will begin with Lesson 2.

The "Ask Any Question" forum is a place where you can ask questions about the course at any time, including questions about issues that do not have specific forums. I will read this forum regularly and respond promptly (many times I will be able to respond the day you post, but other times, I will be traveling or out of the office and will respond as soon as possible). In addition, all students are expected to read the Ask Any Question forum regularly and to respond to the questions of other students (this counts towards participation credit). This discussion forum is one of the important ways you can learn from the course--by sharing your questions and answers with other students, just as you might in a typical class meeting.

The main goal of the Ask Any Question discussion forum is to provide a place for you to post any type of question that comes to you in the progress of the semester. Most often this will be questions about the assignments. Posting your question here will allow everyone to see the answer to your question and will comfort many that you have the same question that they do. I will be watching the forum regularly (I may miss a day or two from time to time when I am out of town) and watch for your posts.

I want each of you to look at the questions and to try to answer them with a follow-up post. This is like someone asking a question in class and I ask for someone in the class to answer. Asking and answering questions about the material is very important because I'm sure you will all have questions at some point, and likely someone else will have the same question. So using the Ask Any Question forum is a key way to make progress in the course and to speed up your learning. It is the closest thing we have to the classroom setting.

I will usually add something to the answers that are posted as well. Answering these questions on the forum is a key way to get class participation points. You might view it as a computer-based study group, where you are sharing questions and answers.

I've also included a forum called "Items in the News," where I will post and comment on news items and articles that are related to our course material. These will be posted as relevant news item occur and not on a specific regular basis. You are welcome to add your comments or questions regarding these news items. If you see a news item you would like to include, you are welcome to post it as well, including its link, and a few of your comments. Participation in this forum is NOT required and will NOT affect your course grade in any way. This is a free resource for you. The purpose of this new discussion forum is to provide you an opportunity to increase your understanding of the course material by discussing it in the context of current events.

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Honor Code

The UNC-Chapel Hill Honor Code will be applicable for all assignments. The work on all assignments, including participation in the discussion forum, is expected to be your individual work. I encourage you to study with others if possible and use the discussion forum to develop and refine your ideas, but the ideas posted on the forums and the assignment solutions and quiz answers you submit to me must be your individual efforts.

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Hints for Success

1. To begin each lesson, read the objectives and overview sections and do the textbook reading assignment. Then, read the "Resources" section on the lesson Web page and begin to work on your solutions. The Resources section usually includes a selection of worked problems from the text. The worked problems will give you an idea of what a good solution would look like for the problems in the lesson. Use them as models for your own solutions.
2. Discuss general questions and relevant issues with your fellow students on the discussion forum.
3. Don't get behind. It is hard to catch up because we deal with many different, essential concepts and techniques, and much of the material later in the course builds on material covered early in the course.
4. Don't hesitate to use e-mail or the "Ask Any Question" discussion forum to get help as soon as you need it.

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Course Mechanics

Blackboard

Some of your class components (announcements, discussion forums, quizzes, homework solutions, and gradebook) are accessed through a software package called Blackboard. You will need to log onto Blackboard using a unique identifier known as your UNC Onyen (Only Name You'll Ever Need) and Onyen password.

There is a link to the Blackboard site in the gray navigation bar at the top of every page in this course. Click on that link, and then use your Onyen to login to Blackboard. Click on the "BUSI 106" link and then you will see navigation buttons on the left taking you to the Announcements, Discussion Forum, and so on.

If you experience problems accessing Blackboard, this is what you should do:

• If you do not already have a UNC Onyen, go to the Onyen Web site and follow the instructions for creating an Onyen.
• If you have an Onyen but have forgotten it (or the password), go to the Onyen Web site.
• If your Onyen password has expired, go to the Onyen Web site and change it.
• If you have your Onyen but can't log in to Blackboard, contact Janice Durham at the Friday Center.
• If you can log in to Blackboard but can't find this course listed, contact Janice Durham at the Friday Center.
• If you can't locate an exam or discussion forum in Blackboard, contact the Instructional Designer.
• If you have other technical problems while using Blackboard, contact Blackboard Help (use the Help button in Blackboard, or call 919-962-HELP).

Library Services

Students enrolled in Carolina Courses Online can access online library resources from the UNC Library System by linking to Library Services for Distance Education Students. This site includes information on using general online reference works.

If you are using an off-campus computer, you will need to enter your UNC Onyen to access readings that are available through the library system. The UNC library staff is available to assist any students who have difficulties accessing online library resources. If you encounter difficulties, please visit this Web page for reporting a problem.

Using E-mail

You are responsible for checking your UNC e-mail account for messages from your instructor and the Friday Center. Off-campus users can access their UNC e-mail account using Webmail. You can have your UNC e-mail forwarded to a different e-mail address by clicking "Forward e-mail" at the Onyen Web site. Your UNC e-mail address is also the one UNC will use to alert you that you need to change your Onyen password when it is about to expire.

If you use a filter on your e-mail account, you are responsible for ensuring that it does not prevent you from receiving messages from me, the course listserv, or Friday Center staff. Hotmail users should be aware that Hotmail will block messages sent from within Blackboard because Blackboard uses "blind carbon copy" to protect privacy. We recommend that you use your UNC Onyen e-mail account rather than Hotmail for this course.

Submitting Assignments

It is extremely important for you to save copies of any work you send to me via e-mail. If I don't receive your work, you must have a duplicate copy, indicating the date sent, to prove that you submitted the assignment on time. It is your responsibility to maintain copies of your sent e-mails, as there is no way to guarantee that any e-mail message will be delivered.

Please check your e-mail software to see how it manages sent and saved messages. Some software automatically deletes messages one month after they have been sent; others only save messages if they are filed in folders; others save messages received but not those sent. You may need to send yourself a copy of your e-mailed assignment at the same time you send it to me, or you may need to print a copy of the e-mail message and any attachments to keep in your paper files. No matter how your system works, make sure you know how to save a copy of all work that you submit to me and that you save the copy for several months beyond the end of the course.

Other Questions

If you have questions regarding the content of the course and your progress, contact me (your instructor). There is a link to my e-mail address at the top of every lesson page. Please include "BUSI 106" in the subject line of your e-mail.

If you find a problem with this Web site, including links that don't work, contact the Instructional Designer at the Friday Center.

If you have any questions about enrollment, Onyen, credits, withdrawal, and so on, contact the Student Services staff at the Friday Center for Continuing Education (phone 919-962-1134 or 800-862-5669).

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Course Schedule

Pay close attention to the schedule. It is crucial to keep up with the assignments in order to complete the various components of this course. When the regular lessons end, you will be presented with your final case project.

Click on the Lesson links below to access the lessons.

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Part I