This course introduces students to basic terminology, concepts, and practices of financial accounting. The goals are for students to be able to read correctly the primary financial statements, to understand the procedures used to prepare them, and to start to exploit their potential for analyzing the economic status and performance of companies.
Course Orientation
Lectures, exercises, cases, simulation games, computer tutorial.
Required texts
Diamond, Stice & Stice, Ginancial Accounting; Reporting and Analysis, South-Western, 5th edition, 1999.
Plan General de Contabilidad 1991, for example by McGraw-Hill.
Additionally recommended texts
Sutton, Corporate Financial Accounting and Reporting, Prentice Hall
Anthony, Reece & Hertenstein, Accounting: Text and Cases, Irwin.
Urías, Introducción a la contabilidad; Teoria y supuestos, Pirámide (if you prefer something in Spanish).
Course outline
1. Introduction to accounting: Uses and users of accounting information, accounting information systems, accounting principles
Overview of financial statements: Accounting Entity, balance sheet, income statement, statement of retained earnings, and cash flow statement
2. Balance sheet transactions: Assets, liabilities and equity, impact of business transactions, format of the balance sheet
3. Income statement transactions: Revenues, expenses, profit and dividends, gains and losses, accrual and matching principle, format of the income statement
4. The recording process and accounting cycle: Accounts, journals and ledgers, debits and credits
5. Completing the accounting cycle: Trial balances, adjusting and closing entries, financial statement preparation
Accounting in Spain: Regulations, general plan of accounting, accounting principles, balances, accounting definitions and relations, annual balances, norms of valuation, appraisal
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