Week One Content Outline : University of Phoenix Tools and Basic Concepts of Accounting

ACC/537 Financial Accounting

Week One Content Outline: University of Phoenix Tools and Basic Concepts of Accounting

OBJECTIVE: Use the tools available to University of Phoenix graduate students.

Resource: University of Phoenix student Web site: https://ecampus.phoenix.edu

Content

·  University Library

·  Center for Writing Excellence

·  Student Web site

OBJECTIVE: Identify the hierarchy of sources for generally accepted accounting principles.

Resource: Ch. 1 of Intermediate Accounting

Content

·  Financial accounting standards board (FASB) standard categorizes the major sources of generally accepted accounting principles (GAAP) as:

o  FASB standards, interpretations, and staff positions

o  Accounting principles board (APB) Opinions

o  American Institute of Certified Public Accountants (AICPA) accounting research bulletins

·  Other sources of GAAP

o  Category A (most authoritative): FASB standards, interpretations, and staff positions; APB Opinions; AICPA Accounting Research Bulletins

o  Category B: FASB Technical Bulletins; AICPA Industry Audit and Accounting Guides; AICPA Statements of Position

o  Category C: FASB Emerging Issues Task Force; AICPA AcSEC Practice Bulletins

o  Category D (least authoritative): AICPA Accounting Interpretations; FASB Implementation Guides (Q&A); widely prevalent and recognized industry practices

OBJECTIVE: Describe the qualities of accounting information.

Resource: Ch. 2 of Intermediate Accounting, Ch. 4 of Financial Accounting

Content

·  Relevance

o  Predictive value

o  Feedback value

o  Timeliness

·  Reliability

o  Verifiability

o  Representational faithfulness

o  Neutrality

·  Comparability

·  Consistency

OBJECTIVE: Compare and contrast accrual basis and cash basis of accounting

Resource: Ch. 4 of Financial Accounting

Content

·  Accrual-basis accounting

o  Revenue recognized on financial statements when earned (revenue recognition principle)

o  Expenses recognized on financial statements when incurred (matching principle)

·  Cash-basis accounting

o  Revenue recognized only when cash is received

o  Prohibited under generally accepted accounting principles

o  Violates the revenue recognition principle

·  Adjusting entries: Ensuring revenue recognition and matching principles are followed

o  Prepayments

·  Prepaid expenses

·  Unearned revenues

o  Accruals

·  Accrued revenues

·  Accrued expenses

OBJECTIVE: Differentiate among various business structures.

Resource: Ch. 1 of Financial Accounting

Content

·  Sole proprietorship

·  Partnership

·  Corporation