This module provides students with an introductory level orientation to core accounting principles and their applications, both internal and external, to a business organisation. It aims to provide students with a good grounding in and an appreciation of the financial accounting essentials that any analyst, manager or business owner should possess.
Financial Accounting is concerned with accounting for the financial transactions and activities of a business in a particular financial period, and building the financial story of that period through the subsequent construction and publication of core financial statements: Balance Sheets, Income Statements, and Cash Flow Statements. In so doing it explains why profit and cash measurements of the same transactions and activities differ, and how Income Statements and Cash Flow Statements are constructed. The Accounting Equation of Assets = Liabilities is applied to the construction of the Balance Sheet. Contextually issues in revenue recognition and expense identification, and in the valuation of assets and liabilties are explored. The module shows students how to calculate financial ratios toanalyse and interpret the core financial statements to gain insights into financial health and performance, insights managers and other interested stakeholders, especially shareholders, are particularly interested in. The module also explores core aspects of Corporate Governanceand their implications for corporate reporting.
This module (MSIN0004) is delivered in both Term 1 and 2 with the final examination to take place in the Summer term for both instances.
Upon successful completion of the module, a student will be able to:
- Understand why it is important - indeed often a legal obligation - for commercial businesses, and in particular limited companies, to account for the financial value of transactions, events and activities
- Understand and apply the conceptual framework underpinning financial accounting and reporting systems
- Identify and explore a range of selected issues and challenges within financial reporting
- Be able to record the financial value of transactions, events and activities in financial accounting systems
- Be able to construct key financial statements and recognize their strengths and weaknesses
- Make sense of how accounting systems work
- Calculate and interpret financial ratios for a range of users of financial information
- Recognise the need for financial reporting to include a range of more qualitative matters associated with corporate governance.
- Financial frameworks for financial statements
- Conceptual underpinnings of financial reporting
- Issues in revenue recognition and expense determination
- Issues in valuation of assets and liabilities
- Construction of income and cash flow statements, and balance sheets
- Accounting for limited companies
- The Accounting Equation and double entry bookkeeping
- The trial balance and adjustments
- Financial analysis through ratios
- Financial reporting issues (including selected issues in corporate governance)
There are three summative assessment components:
· Unseen examination exam (3 hours) 70% - undertaken in Term 3 (summer term).
· Moodle Quiz 10% - this is an on-line test in Week 6 (Reading Week). It may be undertaken on or off campus. It lasts for one hour and is automatically marked by Moodle.
· Team based assignment 20% - with teams comprising, in an ideal world, 2 members.
There is a range of formative assessments usually delivered and assessed by Moodle, supplemented by in-class formative assessments.
Current students should refer to Moodle for specific details of the current year’s assessment.
Financial Accounting for Decision Makers, 8th Ed, by Atrill & McLaney, Pearson, ISBN 9781292099040 - this may also be purchased as a e-book.
Any additional readings will be provided via Moodle.