COMSATS University Islamabad,

Sahiwal Campus

Course Outline & Lecture Plan

Accounting II
MGT230

Faculty of Business Administration

Department of Management Sciences
 Accounting II

Course Information

Course Title: Accounting II Course Code: MGT 230

Program: BBA Semester: 3rd
Teacher Name: Dr Khurram Abbas E-mail: [email protected]

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 Accounting II

A: Description

Accounting helps in recording day-to-day financial activities of an organization. Financial

Accounting on basis of its conceptual and regulatory framework summarizes this information as
financial statements for evaluation of the organization. International Financial Reporting
Standards (IFRS) provide the necessary framework for external reporting. Financial accounting
primarily discusses balance sheet, income statement and statement of cash flows. Asset, liability
and equity are defined, recognized and presented as financial position of a company. Profit
calculation and its disclosure in the financial statements of a reporting entity are covered. Cash
basis accounting and Statement of Cash Flows as its reporting entity are discussed. Criteria
provided in IFRS framework for each relevant account as International Accounting Standards
(IAS) is also discussed.

B: Prerequisites

This is a 3-credit hour course, comprising 3 hours of teaching per week. The students who
studied MGT132 Accounting I can take the course.

C: Learning Objectives

This course will introduce you to the key concepts of Accounting. You will learn to prepare
financial statements and will also be equipped to analyze them. After taking this course, you
will be able to:

1. Describe the nature, uses and purposes of financial accounting, and outline both the
conceptual and regulatory frameworks that govern the preparation and reporting of
financial information
2. Describe the key concepts and conventions that underlie financial accounting
3. Explain and apply the recognition and measurement principles relating to current
assets, current liabilities (including receivables and bad debts, prepayments, accounts
payable and accruals, etc.) and inventories (including methods for inventory costing).
4. Explain and apply the recognition and measurement principles relating to: non‐current
assets (including depreciation and amortization) non‐current liabilities and equity,
5. Explain the characteristics of a sole proprietor vis‐à‐vis a company; and prepare
financial statements for both forms of entities
6. Explain the nature of cash flow statement
7. Discuss the techniques for incomplete records
8. Explain the characteristics of a partnership, prepare financial information for a
partnership including the admission of a partner and the dissolution of a partnership

D: Learning Outcomes

Upon successful completion of the course, the students will be able to:
 Understand the purpose of conceptual framework of IFRS and ICAP
 Prepare financial statements according to the prescribed standards

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 Accounting II

 If financial information is incomplete, then devise a mechanism for completing it to

be further used in financial summary
 Comprehend the standards used in this process
 Understand the cash flows for the business

E: Teaching and Learning Strategies

The Course of Accounting II is designed to provide conceptual and analytical skills to help
prepare students to effectively prepare financial statements according to standards issues
IASB and ICAP. The learning is based on combination of textbook readings, attending
lectures and seminars, tutorials, and project.

F: Books and Resources

 Horngren, Charles T., et al. Introduction to Financial Accounting. Prentice Hall, 1996.
 May, George O. Financial Accounting. Mac Millan Company, 1946.
 CIMA, Fundamentals of Financial Accounting by Kaplan Publishing
 ACCA F3 Complete Learning Solution Financial Accounting

G: Assessment Scheme

Quiz/Assignment 25%
Mid Term Exam 25%
Final Exam 50%

H: Outline and Lecture Plan

Week # Lecture# Topic (Chapter/Topics covered) Evolution Remarks

1 1 Conceptual Framework for Financial

Reporting
 Introduction to Framework for
financial reporting
 Concepts of Relevance and Fair
Representation of financial
reporting
 Concept of Recognition and
Measurement
 Evaluating Characteristics of
Comparability & Verifiability

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Accounting II

2 Conceptual Framework for Financial

Reporting Continued
 Accounting as a view of legal and
Commercial
 Substitute Models and Practices of
Accounting
2 3 Regulatory Framework and Standard
Setting Process
 Define Standard Setting Process
 Reasons for the existence of a
Regulatory Framework
 International Financial Reporting
Standards (IFRS)
4 Regulatory Framework and Standard
Setting Process Continued
 Institute of Chartered Accountants
of Pakistan (ICAP)
 Specialized not-for-Profit and
Public Sector Entities
3 5 Account Receivable
 Classification of receivable
(Account & Note Receivable,
Other Receivable)
 Uncollectable Receivable
 Journalize the entries for the
allowance’s method of
uncollectable
6 Account Receivable
 Estimate uncollectable receivables
based on sales and aging principles
 Journalize the entries for the direct
write-off of uncollectable
receivable
 Journalize the entries for note
receivable transaction
 Current assets presentation of
receivables on balance sheet
4 7 Inventories
 Define Inventories
 Principles of Inventory Valuation
 Record Opening and Closing
Inventory
8 Inventories
 Identification of Methods of
Valuing Inventory
 Relevant Accounting Standards
Related to Inventories

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Accounting II

5 9 Current Liabilities
 Define and give examples of
current liabilities
 Prepare journal entries for short-
term accounts and note payables
 Disclosure for the current portion
of long-term debt
10 Current Liabilities
 Accounting treatment for
contingent liabilities
 Journalize entries for product
warranties
 Determine employer liabilities for
payroll
 Journalize entries for employee
fringe benefits.
6 11 Fixed Assets
 Define fixed assets
 Accounting for fixed assets cost
12 Fixed Assets
Compute depreciation (Straight-line, unit-
of-production and declining-balance
method)
Classify fixed asset costs as either capital
or revenue expenditure
7 13 Fixed Assets
 Journalize entries for disposal
 Journalize entries for exchange of
fixed assets
 Define lease and summarize the
accounting rules related to the
leasing of fixed assets
14 Fixed Assets
 Compute depletion and journalize
the entry for depletion
 Describe the accounting for
intangible assets such as patents,
copyrights and goodwill.
8 15 Corporation: Organization, Capital
Stock Transaction and Dividends
 Describe the nature of corporation
form of organization
 Main sources of stockholders’
equity
 Journalize the entries for issuing
stock

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Accounting II

16 Corporation: Organization, Capital

Stock Transaction and Dividends
 Journalize the entries treasury stock
transaction
 Effect of stock splits on corporate
financial statement
 Journalize the entries for cash and
stock dividends
 Reporting of stockholders’ equity

9 17 Introduction to Financial Statements for

Companies: Balance Sheet
 Types of Companies & Financial
Statements
 Basics for Balance sheet &
Procedure for Company formation

18 Introduction to Financial Statements for

Companies: Balance Sheet
 Preparing and Interpreting Balance
Sheet for Companies
 Compare Balance Sheet for
Companies & Sole-Proprietorships

10 19 Introduction to Financial Statements for

Companies: Income Statement
 Define Income Statement
 Basics for Income Statement
 Multi versus Single-Step Income
Statements

20 Introduction to Financial Statements for

Companies: Income Statement
 Preparing and Interpreting Income
Statement for Companies
 Compare Income Statement for
Companies & Sole-Proprietorships

11 21 Preparing Statement of Cash Flows

 Define Statement of Cash Flows
 Basics for Statement of Cash Flows
 Importance of Statement of Cash
Flows

22 Preparing Statement of Cash Flows

 Statement of Cash Flows
Methods
 Direct and indirect methods of
preparing statement of Cash
Flows

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Accounting II

12 23 Comparing Cash Flows with Profit &

Loss Statement
 Defining Cash Flows
 Classification of Cash flow in
Accounting
 Revenue Recognition in Accrual
Accounting
 Differentiate between
Profit/Expenses and Cash
Inflows/Outflows
24 Comparing Cash Flows with Profit &
Loss Statement
 Shortcomings of Accrual
Accounting
 Benefits and Drawbacks of
Statement of Cash Flows
13 25 Incomplete Records
 Defining Incomplete Records
 Reasons for Incomplete Record
26 Incomplete Records
 Techniques Used in Incomplete
Records
 Construction of Opening & Closing
Balance Sheets
14 27 Techniques Used in Incomplete Records
 Use of Control Accounts for
Construction of Sales and Purchase
Figures
 Use of Gross/Net Profit Percentage
28 Techniques Used in Incomplete Records
 Construction of Cash and Bank
Summary
 Preparing Statement of Profit and
Loss from Incomplete Records
15 29 Accounting for Partnership
 Describe characteristics of
partnership
 Accounting for forming a
partnership
 Accounting for dividing the net
income and net loss of a partnership
30 Accounting for Partnership
 Accounting for the dissolution of a
partnership
 Accounting for liquidating a
partnership

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 Accounting II

16 31 Financial Statement Analysis

 Basic financial statement analytical
procedure
 Financial statement analysis to
assess the profitability of a business

32 Financial Statement Analysis

 Contents of corporate annual
reports
17 Terminal Exam

Prepared by Verified by Approved By

Dr Khurram Abbas (Course Moderator) (Head of the Department)

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