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UNIVERSITY OF SOUTHERN CALIFORNIA
LeventhalSchool of Accounting
Fall 2007
ACCT 410x – Foundations of Accounting (Section 14096R – 2:00 section)
Instructor:Professor Sarah Bonner – USC Accounting Associates Professor of
Accounting; Professor of Management and Organization
Class Hours:2:00 – 3:50 TTh, HOH 422
Course Website:
Office:HOH 622
Office Phone:(213) 740-5025
Email Address:
Office Hours:10:00 – 11:30 TuTh, 12:30 – 2:30 Wed; additional hours before quizzes and exams (see schedule below for these hours); and by appt.*
Emergencies:Call (213) 740-4321 (for a personal emergency) or (213) 740-9233 or
listen to 91.5 KUSC radio (for emergency information)
USC Information:(213) 740-2311
Prerequisites:None
Corequisites:None
* Also please feel free to send me an email at any time. I will respond to you as quickly as I can.
I. COURSE DESCRIPTION
This course provides an introduction to both financial and management accounting. Accounting, in general, is a system that provides quantitative information to people for decision-making purposes. Financial accounting information summarizes the events and transactions of businesses for external users, such as banks and investors. Management accounting information summarizes important phenomena for internal users, such as marketing managers. There is greater emphasis in this class on financial accounting because many of you will use financial accounting information at some point in your lives, e.g., when making decisions about stocks to buy. The presentation will consist of moderately technical expositions of concepts and material, but the primary focus will be that of the user (rather than the preparer) of accounting information.
This course is intended for those with limited or no prior business coursework. The course is not open to students who have credit for other accounting courses, including BUAD 250A and 250B (or a similar course at another 4-year university). This course satisfies the requirement for the business minor (and for other departments’ majors); however, it cannot be used toward a degree in accounting or business. Students who successfully complete the course are eligible to apply to the Leventhal School of Accounting’s Masters programs.
II. COURSE PREREQUISITE KNOWLEDGE
The course has no prerequisites and requires no special skills. The quantitative aspects of the course require only elementary math skills, and you are allowed to use a calculator.
III. COURSE GOAL AND LEARNING OBJECTIVES; COURSE FORMAT
The overall goal of this course, as mentioned above, is to introduce you to financial accounting and management accounting. Subsumed under this goal are several specific learning objectives and desired outcomes:
- You should gain factual knowledge of important financial and management accounting terminology, including, for example: asset, liability, equity, balance sheet, income statement, statement of cash flows, net income, current ratio, debt ratio, accounts receivable, inventory, revenues, costs of goods sold, FIFO, LIFO, fixed cost, variable cost, job order costing, and activity-based costing.
-- The desired outcome for this objective is that you be able to define and describe these terms. For example, you might be asked to define the term “asset” and give an example.
- You should gain factual knowledge of the placement of various items in annual reports, including, for example, the auditor’s report, dividends paid, and operating cash flows. That is, you should learn on which financial statement these items appear and where, if applicable, or in which part of the annual report the item appears.
-- The desired outcome for this objective is that you be able to state where items appear in the annual report. For example, you might be asked to state on which financial statement you would find dividends paid.
- You should learn fundamental financial and management accounting principles. For example, you should learn the balance sheet equation; the effects of transactions and events on asset, liability, and equity accounts; revenue and expense recognition principles; effects of transactions and events on cash flows; various methods of calculating inventory values and depreciation; methods for calculating breakeven point; methods for calculating product costs; and so forth.
-- The desired outcome for this objective is that you be able to describe these principles. For example, you might be asked whether a particular transaction increases or decreases a particular account’s balance.
- You should learn to apply the above factual knowledge to novel situations. That is, you should be able to apply the definitions and descriptions of important terms, and apply your knowledge of placement of items in financial statements.
-- The desired outcome for this objective is that you be able to classify
examples of concepts, and locate items in annual reports. For example, you
might be asked to determine whether a particular item is an asset or a liability
(or neither), or locate dividends paid in a set of financial statements.
- You should learn to apply the above accounting principles to novel situations. For example, you should be able to state (and/or calculate) the dollar effects of a particular transaction (like purchase of materials on credit) on particular accounts (like inventory and accounts payable). As another example, you should also be able to calculate the total cost of a manufactured product.
-- The desired outcome for this objective is that you be able to calculate
various accounting figures (e.g., account balances, costs, etc.) using
fundamental accounting principles. For example you might be told
that a company borrowed funds from a bank and asked to record the dollar
increases or decreases to specific accounts caused by this transaction.
- You should begin to learn how to critically analyze financial statements using the above factual knowledge and principles. Specifically, using your understanding of important terms, the effects of transactions and events on accounts, and the definitions and underpinnings of financial ratios, you should begin to be able to make assessments of firms’ economic “well-being” based on their financial statements.
-- The desired outcome for this objective is that you exhibit a rudimentary
understanding of the use of financial ratios for analyzing financial statements.
For example, you might be asked to calculate a series of ratios and compare
two firms as to their profitability. Because this course focuses foremost on the
basics that underlie financial statements, there is only enough time to begin to
achieve this learning objective.
To achieve the above learning objectives, I will employ a combination of background reading, interactive lecture, practice problems with solutions covered in class, in-class quizzes, and prompt feedback on quizzes and exams. I expect questions from you during class, and you should expect questions from me. Research on learning indicates that it is very difficult to gain anything more than a superficial understanding of material without practice and feedback, so this class incorporates a substantial amount of both. Given that you cannot obtain this practice and feedback without attending class, attendance is very important. NOTE: The “Problems to Try” for each class period are optional; I do not collect or grade homework. Some students prefer to do these problems before class, then receive further reinforcement on the material when we cover them in class. Other students feel more comfortable working the problems after we have covered them in class, which we almost always do. You should choose the option that works best for you.
IV. REQUIRED TEXTS, READINGS, AND OTHER TOOLS
The following texts are required for the course:
Stice, E.K. and J.D. Stice, Financial Accounting: Reporting & Analysis (7th edition).
Garrison, R.H., and E.W. Noreen. Managerial Accounting (11th edition) – selected chapters. NOTE: This text is available only at the bookstore since it is customized for this course.
In situations where you need additional readings, I will provide them in the form of handouts (to the extent possible, they also will be available on the course website). Additionally, you will find it useful to bring a simple calculator to class each day as we will work problems during class. No other readings or tools are necessary.
For those of you who feel that you need more information about general business terminology, I recommend Barron’s Dictionary of Business Terms (4thedition), by J. Friedman. It is available on Amazon.com, among other places, and is fairly inexpensive. Barron’s also publishes a more specific dictionary on investing called Dictionary of Finance and Investment Terms (7thedition), by J. Downes and J.E. Goodman, for those of you interested in learning more about these specific areas.
V.GRADING
Grade Composition and Grading Expectations
Total points for this course are 1000. Your letter grade will be determined based on your relative performance (vis-à-vis your peers in your section only). According to LeventhalSchool policy, I must grade to a standard of 3.15.
The 1000 points for this course are divided as follows:
Component / PointsMidterm exam 1
Midterm exam 2
Final exam
Quizzes (total of 5 worth 60 points each;
lowest 2 grades will be dropped) / 300
260
260
180
Total / 1000
My expectations for your performance on quizzes and exams are as follows. Quizzes will include short answer and multiple-choice questions and problems. Because there is little ambiguity as far as the correctness of answers in this course, the expectations are clear – you should answer them as accurately as you can and as thoroughly as you can. Exams will be similar in composition to quizzes (i.e., they will consist of similar types of questions). You will be allowed to use simple calculators on quizzes and exams (these calculators will be provided to you according to LeventhalSchool policy). Also, I will provide you with quizzes and exams from last year’s course to give you additional reference materials.
The first midterm exam, which will be in class on Thursday, October 4, will cover the material from August 28 through October 2. The second midterm exam, which will be in class on Tuesday, November 6, will cover the material from October 9 through November 1. It will not be cumulative per se, except to the extent that thematerial covered from October 9 through November 1 requires knowledge of previously covered material (and this is true to some extent). The final exam, which is scheduled for 2:00 – 4:00 on Thursday, December 13, will cover the material from November 8 through December 6. Again, it will not be cumulative per se, except to the extent that the material covered from November 8 through December 6 requires knowledge of previously covered material (and this is true to a large extent for this section of the course because the material is more advanced financial accounting material).
PLEASE NOTE: It is to your advantage to attend class every day, be well prepared, and act professionally (including being on time). This is true for three reasons. First, and most importantly, the material we cover in class is what is considered most important for this course, and, therefore, will be the material tested on quizzes and exams. Second, quizzes and exams start promptly at the beginning of class; late arrivers will not be given extra time to complete them.
Third, I will make note of class attendance and participation for the following purposes. The top contributors in each section (defined as the best 15% as far as attendance and participation) will receive up to a 1/3 letter grade increase in their final (letter) grade. So, for example, if your total points from quizzes and exams would earn you a B-, you would receive a B if you qualify as one of the top 15% of class contributors. I will determine the top 15% based on the quality of your contributions to class – for example, occasional thoughtful comments and questions that reflect effort are far more important in determining “quality” than are continual comments and questions that do not reflect thoughtfulness. At the end of the term, those who are in the top 15% will receive a note from me. Finally, I reserve the right to lower your final (letter) grade for continued unprofessional conduct. Unprofessional conduct includes, but is not limited to, coming to class late; interrupting class with talking, a mobile phone, pager, etc.; using a laptop for activities unrelated to class; and so forth. If I have a concern about unprofessional conduct, I will talk with you individually first. If the conduct continues, your grade may be lowered 1/3 of a grade. So, for example, if your total points from quizzes and exams would earn you a B-, but you have continued unprofessional conduct, I reserve the right to lower this to a C+.
Policy for Regrading Quizzes and Exams
You will be provided with a solution to each quiz and exam. These solutions will show the point breakdown used in grading the exam as well as the correct answers. If you believe that your quiz or exam has been graded in error, I am happy to regrade your paper if you do the following. First, please explain in writing why you believe a given answer is correct, where “correct” is defined by the solutions you receive. Second, turn in your explanation with your quiz or exam within TEN DAYS of receiving it. If I do not receive a request for regarding within ten days of your receipt of the quiz or exam, the grade will be considered final. Additionally, I reserve the right to regrade the entire quiz or exam.
Policies for Making up Quizzes and Exams
It is to your advantage to take all quizzes and exams at the time they are given. Further, unless you have my prior approval, you must take quizzes and exams in the section for which you are registered (the main reason for this is that each class is full; there are no extra seats!).
Because the lowest two quiz grades are dropped, there will be NO makeup quizzes given if you miss quizzes. Additionally, because quizzes are always given at the beginning of class, you may not take the quiz if you come to class after the quiz is complete. If you come to class late but while the quiz is still in progress, you may not take extra time on a quiz – you must turn it in when time is up, irrespective of when you start.
The policy of the Leventhal School of Accounting is that you should not miss exams unless there is a very serious emergency AND you can properly document this emergency. Also, to the extent possible, you must inform me of the emergency prior to the exam (I understand that this is not always possible). If there is not a serious emergency or you cannot provide proper documentation, you will receive a grade of –0- on the exam. If there is a serious emergency and you can provide proper doumentation and, where possible (most of the time), notify me ahead of time of the situation, I will not give a makeup exam. Instead, I will determine your grade from the remaining exams and the quizzes. That is, I will “gross up” the points from the other components of your grade so that it is as if you are operating on a 1000-point scale. If you arrive late to an exam, you may not take extra time to complete the exam. You must turn in your paper at the end of the exam period, irrespective of when you start the exam.
Finally, you must take the final exam at the scheduled time (Thursday, December 13, 2:00 – 4:00 PM), unless an incomplete contract has previously been approved according to Leventhal School of Accounting standards (or, of course, unless there is an emergency, as above). See the LSOA standards attached to the end of the syllabus for further information.
Policy for Disposition of Quizzes and Exams
I return all quizzes and exams to students after they are graded. If you are not present on the day a quiz or exam is returned, I will continue to bring the quiz or exam for you to pick up for one week after the initial return attempt. After that, I will maintain quizzes and exams in my office for you to pick up during office hours. Any quizzes or exams not picked up will be destroyed at the end of the spring semester.
Policies Regarding IN and W grades
The Leventhal School of Accounting Grading and Academic Standards policies regarding IN and W grades govern my giving of these grades in this course. Please refer to the attached sheets to familiarize yourself with these policies.
VI. STATEMENT FOR STUDENTS WITH DISABILITIES
Any student requesting academic accommodations based on a disability is required to register with Disability Services and Programs (DSP) each semester. A letter of verification for approved accommodations can be obtained from DSP. Please be sure that the letter is delivered to me as early in the semester as possible (and please note that DSP has deadlines for getting the letter back to them – they will not accommodate requests that are delivered after their deadlines). DSP is located in STU 301 and is open 8:30 a.m. – 5:00 p.m., Monday through Friday. The phone number for DSP is (213) 740-0776.
VII. STATEMENT ON ACADEMIC INTEGRITY
USC seeks to maintain an optimal learning environment. General principles of academic honesty include the concept of respect for the intellectual property of others, the expectation that individual work will be submitted unless otherwise allowed by an instructor, and the obligations both to protect one’s own academic work from misuse by others as well as to avoid using another’s work as one’s own. All students are expected to understand and abide by these principles. Scampus, the Student Guidebook, contains the Student Conduct Code in Section 11.00, while the recommended sanctions are located in Appendix A: will be referred to the Office of Student Judicial Affairs and Community Standards for further review, should there be any suspicion of academic dishonesty. The Review process can be found at: