Semester- I /AFM/ /(Jun-Oct, 2013)

Course Handout Accounting For Managers (AFM) Semester-I (June -October, 2013) Course Overview The course is designed to provide the students with a sound understanding of the basic accounting principles, concepts and standards and skill in the preparation and presentation of financial statements. Moreover this course a blend of financial accounting and management accounting. At the end of this course, students will be capable of preparing and understanding financial statements and use financial and management accounting information for taking business decisions. Course Objectives To acquaint the students with the principles, concepts and standards of accounting. To develop the students understanding of the conceptual framework of accounting and the principles, and procedures that govern the preparation of financial statements. To acquire the essential skills to deal with the decisions involving cost control and profit planning. To use management and cost accounting information in planning, controlling, and decisions making. Reading Material: 1. Accounting Text and Cases by Robert Anthony, David Hawkins and Kenneth Merchant (AHM) 2. Framework for Preparation and Presentation of Financial Statements Issued by ICAI 3. Accounting Standards Issued by ICAI

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Semester- I /AFM/ /(Jun-Oct, 2013)

Supplementary Reading Material: 1. Accounting for Decision Making by Belverd Needles, Marian Powers and Susan Crosson, Cengage Learning 2. Introduction to Financial Accounting by Charles Horngren, Gart Sundem, John Elliott and Donna Philbrick (9th Edition), Pearson 3. Introduction to Management Accounting by Horngren, Sundem, Stratton, Burgstahler and Schatzberg (14th Edition), Pearson 4. Financial Accounting for Business Managers by Ashish K Bhattacharyya (3rd Edition), PHI Learning Evaluation: The evaluation for the course will be based on Class Participation, Written Tests and End Term Exam. Activity 1 Class Participation Round I Round II Round III 2 NCP Test Test I Test II 3 End term Examination TOTAL Session Marks 1-11 13-22 24-33 12th 23rd 10% 10% 10% 15% 15% 40% 100%

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Semester- I /AFM/ /(Jun-Oct, 2013)

Delivery Schedule Session Detailed Syllabus 1 Need for Accounting Information Financial Accounting Framework Financial Statements Overview Basic Accounting Concepts: Balance Sheet Overview Assets, Liabilities and Owners Equity Basic Concepts Money Measurement Concept Entity Concept Going Concern Concept Cost Concept The Dual Aspect Concept Basic Accounting Concepts: Income Statement Basic Concepts The Accounting Period Concept Conservatism Realization Concept Matching Concept Consistency Concept Materiality Concept Recognition of Expenses Criteria for Expense Recognition Expenses and Expenditure Gains and Losses The Income Statement Revenues, Cost of Sales, Gross Chapters in Cases to be Discussed AHM Chapter 1 Case 1-2 Kim Fuller Framework (issued by ICAI) Chapter 2 Case 2-2 Music Mart Inc Framework Case 2-1 Maynard (issued by Company (A) ICAI) . Source AHM

2-3

AHM

4-5

Chapter 3 Framework (issued by ICAI)

Case 3-3 Dispensers of California, Inc. Case 3-4 Pinetree Motel

AHM AHM

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Semester- I /AFM/ /(Jun-Oct, 2013)

6-7 8-9

Margin, Expenses, Net Income Concept Relationship between Balance Sheet and Income Statement Accrual versus Cash Based Accounting Comprehensive Case Revenue Recognition Chapter 5 Concept Gross versus Net AS 9 (issued by Timing of Revenue Recognition ICAI) Delivery / Sales Method Collection Method Production Method Percentage of Completion Method Installment Method Amount of Revenue Recognition Cash Discounts Revenue Adjustment versus Expense Warranty Costs Inventory valuation in Merchandising / Chapter 6 Manufacturing / Service Companies AS 2 (issued by Full Cost of Inventory ICAI) Product versus Period Cost Periodic versus Perpetual Inventory method Methods of Inventory Costing Specific Identification Method First in First Out

Case 4-3 Copies Express Surendar Pal Case 5-3 Joan Holtz (A)

AHM INTERNAL AHM

10-11

Case 6-2 Lewis Corporation Case 6-4 Joan Holtz (B)

AHM

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Semester- I /AFM/ /(Jun-Oct, 2013)

12 13-15

16-18

19

20-22
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Last in First Out Average Cost Method Valuation Principle (Lower of Cost or Net Realizable value) NCP Test I (15%) Fixed Assets Asset versus Expense Self Constructed Depreciation Disposal Depleting Assets Depletion and Appreciation Intangible Assets Goodwill Patents and Copyrights Research and Development Cost Purpose of Cash Flow Statement Utility, Liquidity versus Profitability Contents of Cash Flow Statement Cash flow from Operating Activities Cash flow from Investing Activities Cash flow from Financing Activities Direct method versus Indirect method Non Cash transactions (Depreciation, Amortization, provisions, etc) Understanding Annual Report Notes, Schedules, Auditors Report, Directors Report, M D & A, Off Balance Sheet Items Relation of Cost to Volume Variable and Fixed Costs

Chapter 7 AS 6, 7, 10, 16, 26 (issued by ICAI)

Case 7-3 Stafford Press Case 7-2 Joan Holtz (C).

AHM

Chapter 11 AS 3 (issued by ICAI)

Cash Flow at BTTL

INTERNAL

Chapter 14 AS 1 (issued by ICAI) Chapter 16

Infosys

Case 16-1 Hospital Supply, Inc.

AHM

Semester- I /AFM/ /(Jun-Oct, 2013)

23 24-28

Unit Costs Break Even Analysis & Applications Break Even Point Target Profit Operating Leverage Contribution NCP Test II (15%) Full Cost Concept & Uses Measurement of Direct Costs Allocation of Indirect Costs Activity Based Costing Cross-Subsidies

Case 16-3 Bill French

AHM

Chapter 17 Chapter 18

29-33

Decisions Involving Alternative Chapter 26 Choices Dropping a product line Shut down / Subcontract Acceptance of Special Order

Pepe Denim Case 18-1 Huron Automotive Company Case 18-2 Califonia Creamery Case 18-3 Wilkerson Company Case 26-1 Import Distributors Inc. Case 26-2 Forner Carpet Company Case 26-3 Precision Worldwide Inc.

INTERNAL AHM AHM AHM AHM AHM AHM

End term Case based Examination (40%)

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