A/C II

Financial Accounting II

BCA, Second Year, Third Semester

Course Objectives:

This course aims to equip students with the knowledge and skill in handling financial accounting system. Specifically it aims to acquaint students with the

·         Recording, accounting, valuation and disclosure in the financial statements of the inventories and the cost of goods sold:

·         Accounting and disclosure of cash equivalents and receivables;

·         Accounting and disclosure of non-current assets and liabilities.

·         Accounting and disclosure of current liabilities; and

·         Accounting and presentation of owners equity and dividends.

Course Contents:

1.            Accounting for Inventories and cost of Goods Sold                                                       8 hours

The nature of inventory; cost of goods sold model; inventory valuation and income measurement; inventory costing methods; choice of a method; methods of inventory estimation;  effect of inventory valuation method on the cost of goods sold; disclosure in the financial statements

2.            Accounting for cash, Cash Equivalent and receivables                                                  8 hours

Cash and cash equivalent: components of cash and cash equivalents; Preparation of the bank reconciliation statement and the need for adjustments to accounting records; petty cash, balance sheet presentation cash and cash equivalent. Accounts receivable: valuation of accounts receivables, methods to account for uncollectible amount, balance sheet presentation; notes receivable: interest bearing notes, non-interest bearing notes, presentation of the notes receivable and related aspects in the financial statements.

3.            Accounting for Non-current Assets                                                                                  11 hours

Concepts of capital, revenue and deferred revenue expenditure; types of operating assets; acquisition of operating assets and the capitalization process; depreciation: concepts, methods, and accounting (straight line and diminishing balance method including accelerated depreciation method), disposal of assets and accounting for gains and loses; disclosure in the financial statements.

4.            Accounting for Current Liabilities                                                                                   5 hours

Accounts payable; notes payable, tax payable, warranties and accrued liabilities; balance sheet presentation

5.            Accounting for Non-current Liabilities                                                                            9 hours

Bonds payable: issuance of bonds, characteristics of bonds, factors affecting bond price, premium of discount on issuance of bonds, bond amortization, redemption of bonds, disclosure in financial statements. Accounting for lease; Operating and financial lease; balance sheet of presentation.

6.            Accounting for Stockholders' Equity and Dividends                                                     7 hours

Stockholders' Equity: components of the stockholders' equity section of the balance sheet; Stocks; type of stock, issuance of stock, stock issued for cash and non-cash consideration and on a subscription basis, treasury stock, retirement of a stock; presentation in the financial statements; Dividends; Meaning and types of dividend-cash dividend, cash dividend for ordinary stock and preferred stock; stock dividend and stock split, disclosure in financial statements.

Text Book:

1. Porter; Gray A. and Norton, Curtis L, Financial Accounting: The Impact on Decision Makers, The Dryden Press, USA.

Reference Book:

1. Narayanswamy, R., Financial Accounting: A Managerial Perspective, Prentice Hall of India. New Delhi.