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Actg 2 Fundamentals of Accounting, Part II

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121 views3 pages

Actg 2 Fundamentals of Accounting, Part II

Uploaded by

Vanessa L. Vinluan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Tomas Del Rosario College

Capitol Drive, San Jose, Balanga City, Bataan


Telefax No.: (047)791-6152; Tel. Nos.: (047) 237-3511, 237-0841

BACHELOR OF SCIENCE IN ACCOUNTANCY


(Course Syllabus)

Course: Actg. 2

Course Title: Fundamentals of Accounting, Part II

Course Credit: Six (6) units

Prerequisite: Fundamentals of Accounting, Part I

Course Description
This is a continuation of the first course in accounting. It deals with transactions, financial
statements, and problems peculiar to the operations of partnerships and corporations as distinguished
from sole propriertorships. Topics include: partnership formation and operations including accounting
for the admission of partners, changes in capital, and profit and loss-sharing ratios; the conversion of an
unincorporated enterprise into a corporation; accountin for incorporated enterprises, including corporate
organizations, paid-in capital, accumulated earnings (loss), dividends arid treasury shares.
It will also cover the preparation of financial statements for internal and external purposes,
accounting information systems manual and computerized special journals; understanding balance sheet,
income statement, statement of cash flows and statement of changes in equity; financial statements of
companies in the service, manufacturing and trading industries; and analysis of accounting information
and decision making.

Course Outline:

1. Review of the accounting process


1.1 Definition and nature of accounting
1.2 The accounting cycle (Recording phase. Summarizing phase)
2. Accounting for partnership transactions
2.1 Definition of partnership
2.2 Characteristics of a partnership
2.3 Advantages and disadvantages of a partnership
2.4 Classification of partnerships
2.5 Kinds of partners
2.6 The partnership contract
2.7 Accounting for partnership
2.7.1 Initial investments by partners
2.7.2 Partnership operations
2.7.3 Sharing partnership profits and losses (Sharing based on partners
agreement, Sharing based on capital contribution, Sharing based on capital
contribution and on service, Sharing based on salaries and on interest).
2.7.4 Partners’ drawings
2.7.5 Admission of a partner (Admission by purchasing a partners’ interest,
Admission by investing in the partnership, Admission by investing in the
partnership – bonus to the old partners, Admission by investing in the
partnership – bonus to the new partner).
2.7.6 Withdrawal of a partner (Withdrawal at book value, Withdrawal at less
than book value, Withdrawal at more than book value)
2.7.7 Death of a partner
2.7.8 Liquidation of a partnership [Sale on non-cash assets (At gain; At a loss;
At carrying value). Payment of partnership liabilities, Distribution of
remaining assets to partners]
2.7.9 Partnership financial statements
3. Accounting for corporate transactions
3.1 Definition of corporation
3.2 Characteristics of corporation
3.3 Advantages and disadvantages of corporation
3.4 Classification of corporations
3.5 Steps in organizing a corporation
3.6 Articles if incorporation and by-laws of the corporation
3.7 Rights of shareholders
3.8 Share capital (Ordinary and preference shares, Par value and no-par value shares,
Authorized and unissued capital shares, Issued and outstanding capital shares,
Cumulative and noncumulative preference shares, Participating and non-participating
preference shares)
3.9 Accounting for share capital transactions
3.9.1 Recording by memorandum entry method and by journal entry method of
the authorized share capital
3.9.2 Issuance of share capital for cash and/or other assets (Par value share),
No-par value but with stated value, No-par value and no stated par value)
3.9.3 Share subscriptions (Receipt of subscription, Collection, Subscription
defaults)
3.9.4 Share transactions subsequent to formation [Purchase of treasury shares
(costs method only), Reissue of treasury shares, Share retirement,
Conversion of preference shares into ordinary shares]
3.10 Other components of shareholders’ equity
3.10.1 A Retained earnings I Accumulated profit or loss (Addition of the profit or
loss for the current period, Dividends paid or declared, Transfers to and
from reserves, Changes in accounting policy and errors)
3.10.2 Reserves [for appropriations of retained earnings (additions/reversals),
Asset revaluation surplus, Fair value differences, Foreign currency
translation differences]
3.11 Dividends, book value per share, and earnings per share computation
3.11.1 Journal entries to record the declaration and payment of dividends
3.11.2 Computation of basic earnings per ordinary share
3.11.3 Computation of book value per share of preference and ordinary shares
3.12 Share capital transactions subsequent to formation
3.12.1 Share capital retirement
3.12.2 Treasury shares
3.12.3 Conversion of preference share into ordinary shares
4. Financial reporting and analysis
4.1 Balance sheet
4.1.1 Objective of a balance sheet
4.1.2 Balance sheet classifications [(Current and Noncurrent), Liabilities
(Current and Noncurrent), Equity]
4.1.3 Information required to be presented on the face of the balance sheet or in
the notes
4.1.4 Illustrative balance sheet
4.2 Income statement
4.2.1 Objective of an income statement
4.2.2 Information required to be presented on the face of the income statement
or in the notes
4.2.3 Illustrative income statement
4.3 Statement of changes in equity
4.3.1 Objective of a statement of changes in equity
4.3.2 Information required to be presented on the face of the statement of
changes in equity or in the notes
4.3.3 Illustrative statement of changes in equity
4.4 Cash flow statement
4.4.1 Objective of a cash flow statement
4.4.2 Information required to be presented on the face of the cash flow
statement or in the notes
4.4.3 Illustrative statement of cash flows
4.4.4 Appreciation of cash controls (Bank reconciliation statement; Petty cash
fund)
5. Interpreting financial statements using ration analysis
5.1 Evaluating liquidity (Current ratio; Acid-test ratio; Receivable turnover; Inventory
turnover)
5.2 Evaluating profitability (Rate of return on net sales; Rate of return on total assets; Rate of
return on owner(s) equity)
5.3 Evaluating long-term solvency (Debt ratio; Times interest ratio)
5.4 Evaluating cash flow adequacy (Cash flow liquidity ratio; Defensive interval ratio)
5.5 Evaluating market ratios (Price/earnings ratio; Dividend yield)

Suggested References
 Baysa G.T., and MC.Y. Lupisan. (2004). Accounting for Partnership, and Corporation.
Mandaluyong City: Millennium Books, Inc.
 Valencia, E. (2005). Partnership & Corporation Accounting. Mandaluyong City: Millennium
Books, Inc.
 Vicente, V.V. and V. Calanog. (2006). Accounting for Partnership and Corporation. Manila: GIC
Enterprises.

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