Accounting II

Students for whom this course is intended: Principles of Accounting II is required for students enrolled in the Associate of Arts program in Business Administration and also the Associate of Applied Science in Business Management. This course is also useful for anyone who may need knowledge of accounting for the corporate environment.

Catalog Description: BAN 223 Principles of Accounting II

3 hrs. 3 credits

Prerequisite: BAN 213 or departmental approval.

A continuation of BAN 213. Emphasis will be placed on partnerships and corporations. Cost and budget accounting will be introduced as well as analysis and interpretation of corporate financial statements. Fall, spring, and summer semesters.

Course Objectives: Upon completion of Principles of Accounting II, the student should be competent in the following subjects:

Principles of internal control over cash
Accounting issues related to accounts receivable and notes receivable
Topics of inventories, including the effects of inventory errors, internal controls, inventory costing methods, lower-of-cost-or-market adjustments, and estimating inventory
Fixed assets, intangible assets, natural resources, and the accounting issues related to these assets
Obligations included in the Current Liabilities section of the balance sheet: notes payable, contingent liabilities, payroll, employee fringe benefits, and ratios
Characteristics of a corporation including topics related to stock
Comparisons and contrasts of proprietorships, corporations, partnerships, and limited liability corporations
Accounting treatment for both short-term and long-term investments
Present a and amortization of bond discounts and premiums

Learning Objectives:

After students have completed activities and exercises assigned for each chapter, they should be able to:

Chapter 7 - Objectives
Cash

	1. Describe the nature of cash and the importance of internal control over cash.
	2. Summarize basic procedures for achieving internal control over cash receipts.
	3. Summarize basic procedures for achieving internal control over cash payments including the use of a voucher system.
	4. Describe the nature of a bank account and its use in controlling cash.
	5. Prepare a bank reconciliation and journalize any necessary entries.
	6. Account for small cash transactions using a petty cash fund.
	7. Summarize how cash is presented on the balance sheet.
	8. Compute and interpret the ratio of cash to current liabilities.

Chapter 8 – Objectives
Receivables

	1. List the common classifications of receivables.
	2. Summarize and provide examples of internal control procedures that apply to receivables.
	3. Describe the nature of and the accounting for uncollectible receivables.
	4. Journalize the entries for the allowance method of accounting for uncollectibles, and estimate uncollectible receivables based on sales and on an analysis of receivables.
	5. Journalize the entries for the direct write-off of uncollectible receivables.
	6. Describe the nature and characteristics of promissory notes.
	7. Journalize the entries for notes receivable transactions.
	8. Prepare the Current Assets presentation of receivables on the balance sheet.
	9. Compute and interpret the accounts receivable turnover and the number of days’ sales in receivables.

Chapter 9 – Objectives
Inventories

	1. Summarize and provide examples of internal control procedures that apply to inventories.
	2. Describe the effect of inventory errors on the financial statements.
	3. Describe three inventory cost flow assumptions and how they impact the income statement and balance sheet.
	4. Compute the cost of inventory under the perpetual inventory system, using the following costing methods: first-in, first-out; last-in, first-out; and average cost.
	5. Compute the cost of inventory under the periodic inventory system, using the following costing methods: first-in, first-out; last-in, first-out; and average cost.
	6. Compare and contrast the use of the three inventory costing methods.
	7. Compute the proper valuation of inventory at other than cost, using the lower-of-cost-or-market and net realizable value concepts.
	8. Prepare a balance sheet presentation of merchandise inventory.
	9. Estimate the cost of inventory, using the retail method and the gross profit method.
	10. Compute and interpret the inventory turnover ratio and the number of days’ sales in inventory.

Chapter 10 – Objectives
Fixed Assets and Intangible Assets

	1. Define fixed assets and describe the accounting for their cost.
	2. Compute depreciation, using the following methods: straight-line method, units-of-production method, and declining-balance method.
	3. Classify fixed asset costs as either capital expenditures or revenue expenditures.
	4. Journalize entries for the disposal of fixed assets.
	5. Define a lease and summarize the accounting rules related to the leasing of fixed assets.
	6. Describe internal controls over fixed assets.
	7. Compute depletion and journalize the entry for depletion.
	8. Describe the accounting for intangible assets, such as patents, copyrights, and goodwill.
	9. Describe how depreciation expense is reported in an income statement, and prepare a balance sheet that includes fixed assets and intangible assets.
	1 Compute and interpret the ratio of fixed assets to long-term liabilities. Chapter 11 – Objectives Current Liabilities
	1. Define and give examples of current liabilities.
	2. Prepare journalize entries for short-term notes payable and for the disclosure for the current portion of long-term debt.
	3. Describe the accounting treatment for contingent liabilities and journalize entries for product warranties.
	4. Determine employer liabilities for payroll, including liabilities arising from employee earnings and deductions from earnings.
	5. Describe payroll accounting systems that use a payroll register, employee earnings records, and a general journal.
	6. Journalize entries for employee fringe benefits, including vacation pay and pensions.
	7. Use the quick ratio to analyze the ability of a business to pay its current liabilities. Chapter 12 – Objectives Corporations: Organization, Capital Stock Transactions, and Dividends
	1. Describe the nature of the corporate form of organization.
	2. List the two main sources of stockholders’ equity.
	3. List the major sources of paid-in capital, including the various classes of stock.
	4. Journalize the entries for issuing stock.
	5. Journalize the entries for treasury stock transactions.
	6. State the effect of stock splits on corporate financial statements.
	7. Journalize the entries for cash dividends and stock dividends.
	8. Describe and illustrate the reporting of stockholders’ equity.
	9. Compute and interpret the dividend yield on common stock.

Chapter 13 – Objectives
Partnerships and Limited Liability Corporations

	1. Describe the basic characteristics of proprietorships, corporations, partnerships, and limited liability corporations.
	2. Describe and illustrate the equity reporting for proprietorships, corporations, partnerships, and limited liability corporations.
	3. Describe and illustrate the accounting for forming a partnership.
	4. Describe and illustrate the accounting for dividing the net income and net loss of a partnership.
	5. Describe and illustrate the accounting for dissolution of a partnership.
	6. Describe and illustrate the accounting for liquidating a partnership.
	7. Describe the lifecycle of a business, including the role of venture capitalists, initial public offerings, and underwriters.

Chapter 14 – Objectives
Income Taxes, Unusual Income Items, and Investments in Stocks

	1. Journalize the entries for corporate income taxes, including deferred income taxes.
	2. Prepare an income statement reporting the following unusual items: fixed asset impairments, restructuring charges, discontinued operations, extraordinary items, and cumulative changes in accounting principles.
	3. Prepare an income statement reporting earnings per share data.
	4. Describe the concept and the reporting of comprehensive income.
	5. Describe the accounting for investments in stocks.
	6. Describe alternative methods of combining businesses and how consolidated financial statements are prepared.
	7. Compute and interpret the price-earnings ratio.

Chapter 15 Objectives
Bonds Payable and Investments in Bonds

	1. Compute the potential impact of long-term borrowing on the earnings per share of a corporation.
	2. Describe the characteristics of bonds.
	3. Compute the present value of bonds payable.
	4. Journalize entries for bonds payable.
	5. Describe bond sinking funds.
	6. Journalize entries for bond redemptions.
	7. Journalize entries for the purchase, interest, discount and premium amortization, and sale of bond investments.
	8. Prepare a corporation balance sheet.

Compute and interpret the number of times interest charges earned.

Course Policies

Attendance:

The classroom attendance policy is designed to foster student success. PROMPT and REGULAR attendance is the responsibility, and expected of, each student. You are responsible for all work missed and completing your assignments at the earliest possible dates.

Class Attendance Policy

Classes Meeting 3 Times a Week

Students are permitted three (3) absences. On the fourth absence you will receive a 5-point reduction on you final grade and on the fifth you will receive an additional 5-point reduction on your final grade. When you have missed 6 classes, you will receive an EW or F and you may not return to class.

Classes Meeting 2 Times a Week

Students are permitted two (2) absences. On the third absence you will receive a 5-point reduction on your final grade and on the fourth you will receive an additional 5-point reduction on your final grade. When you have missed 5 classes, you will receive an EW or F and you may not return to class.

Classes Meeting 1 Time a Week

Students are permitted one (1) absence. On the second absence you will receive a 5-point reduction on your final grade. When you have missed 3 classes you will receive an EW or F and you may not return to class.

The instructor will warn a student in danger of becoming excessively absent by sending a warning notice to the student’s advisor so that the student can be contacted by either phone or in writing.

If a student is unable to attend a class regularly, regardless of the reason or circumstances, he/she should withdraw from that class before an EW or F is assigned.

Exceptions to this attendance rule may be based on individual circumstances and the instructor’s assessment of the student’s ability to finish course requirements. The final decision concerning absences is left to the instructor’s discretion. A student’s attendance will affect their grade in this course.

Punctuality:

There are no tardies—students are expected to arrive at their classrooms prior to the beginning of classroom activities. Since late arrivals and early departures do disrupt the class, you are hereby put on notice that you can and most likely will be dropped from this course if you are consistently late or leave early or have more than the allowed absences. Any student entering the classroom after the class roll has been taken will be considered absent. There is one exception to this rule: Students who have been held over by their instructor.

Quizzes and Tests:

Missed Quizzes:	Quizzes are given to award those students who *are in class*. No quizzes can be made up.
Testing Policy:	Testing is a vital part of this course. The student is expected to attend the day of testing. Tests are scheduled on the course syllabus and will be announced in class. If a student should miss a scheduled test, there will be no make-up test and the student will receive a zero unless the student has made prior arrangements with the instructor.
Mid-Term and Final Exams:	Mid-term and final exams will not be administered at another time unless under extreme emergencies. This will be left to the discretion of the instructor.

Academic Integrity:

Cheating Policy

Students are expected to uphold the school’s standard of conduct relating to academic honesty. Students assume full responsibility for the content and integrity of the academic work they submit. The guiding principle of academic integrity shall be that a student’s submitted work, examinations, reports, and projects must be that of the student’s own work. Students shall be guilty of violating the honor code if they:

1. Represent the work of others as their own.

2. Use or obtain unauthorized assistance in any academic work.

3. Give unauthorized assistance to other students.

4. Modify, without instructor approval, an examination, paper, record, or report for the purpose of obtaining additional credit.

5. Misrepresent the content of submitted work.

Administrative Procedure Number: 404.05

Cheating in any form (including using unauthorized materials, information, or study aids in any academic exercise; plagiarism; falsification of records; unauthorized possession of examinations; any and all other actions that may improperly affect the evaluation of a student's academic performance or achievement; and assisting others in any such act) is forbidden. An instructor who has proof that a student is guilty of cheating may take appropriate action up to and including assigning the student a grade of "F" for the course and suspending the student from class. A description of the incident and the action taken will be reported through the dean to the Vice Chancellor for Instruction and placed in the student's file in the Office of Admissions and Records. The student may appeal either the finding of cheating or the penalty, or both, as described in Administrative Procedure No.

404.06, Academic Appeal Procedure.

Cheating in this class:

Cheating will not be tolerated. If you are cheating on one occasion, you will receive an “F” for the whole project’s work (not limited to that one assignment). If found cheating on a second occasion, you will be asked to drop the class. If the cheating occurs after the drop date, or if you choose not to drop, you will receive an “F” for this class. All work must be on your disk or in your notebook unless the instructor directs you to destroy them.

Classroom Policies

Standards of Behavior:

It is this instructor’s desire that every student succeed in this class. Students are hindered in this success if there are classroom distractions. Students are to adhere to the standards of behavior described in the Student Handbook. Students who do not adhere to this policy will be dropped from the class.

No food or drinks are allowed in the computer lab.
Computer settings are not to be changed. Personal wallpaper, screen savers, shortcuts, etc. are not to be added to the desktop.
Access to objectionable websites is prohibited.
According to the student handbook: A student may not have unauthorized persons (children or adults) on campus.
Cell phones and pagers must be turned off when entering the classroom.

Assignments and Grading

This course emphasizes learning through doing. It is imperative that you read the text carefully, do the assigned homework and prepare assigned cases/topics.

Assignments often build on previous assignments. If you do half‑hearted work in Chapter 7, you may have difficulty in Chapter 8, and be lost in Chapter 9. Tutoring may be available for students who desire additional help.

Phillips Community College Core Competencies:

Phillips Community College believes students need both technical knowledge and skills and core abilities in order to succeed in a career and in life. The following 6 core abilities are the general attitudes and skills promoted and assessed in all Phillips Community College programs. The competencies marked with * asterisks are promoted and assessed in this course:

1. Students will be able to communicate effectively in a written or oral manner in the business environment.

2. Students will acknowledge diverse groups of individuals possessing different beliefs, values, attitudes, and customs.

3. Students will demonstrate a legal/ethical behavior that is appropriate for the business professional in today’s society. *

4. Students will analyze, interpret, and evaluate data necessary to solve problems and support business decisions. *

5. Students will perform computational skills and financial analysis appropriate to the business environment. *

6. Students will demonstrate the ability to use computer technology. *

Grading

Grading will be based on the following assessments:

*Tests*: A test will be given at the completion of chapters 7-8, 9-11, and 13-15. The tests will consist of matching, multiple choice, short answer, and problem type questions.	50%
*Comprehensive Problems*: At the end of chapters 11 & 15, there is a comprehensive problem. These will be assigned and given due dates to be completed on your own during the course. These problems will illustrate how each of the chapters and objectives learned work together into a finished product. Questions pertaining the comprehensive problem will be included on the test for Chapters 9-11 and 13-15.	20%
*Chapter Quizzes, Homework Exercises and Problems:* Homework assignments will be given with each chapter and will be done through Personal Trainer. I will be able to check your progress to see how you are doing. Don’t get behind! Late homework will not be accepted.	20%
Quizzes: Quizzes will be taken online and sent by e-mail to the instructor. These are to be e-mailed by the due date and will not be accepted late. These on-line quizzes are due before the Chapter Test.	10%
Total	100
Grading Scale
90 - 100% = A 80 - 89% = B 70 - 79% = C 60 - 69% = D Below 60 = F

*The instructor reserves the right to change this syllabus in order to meet the needs of the students