University of Texas at Dallas

AIM 6201 – Financial Accounting

Fall 2005
Section 555: Mon 6:00-10:00 (SOM 2.115)
Section 556: Tue 6:00-10:00 (SOM 2.115)
Section 557: Wed 6:00-10:00 (SOM 2.115)
Section 558: Thu 6:00-10:00 (SOM 2.115)

Instructor: Mark E. Vargus

Office: SOM 4.422
Phone: 972-883-4772
Email: vargus@utdallas.edu
Web: www.utdallas.edu/~vargus
Office Hours: M-Th 5:15-6:00 or by appointment.

Course Description and Objectives:

The presentation will consist of moderately technical expositions of concepts and material, however, the
primary focus will be that of the user, rather than the preparer of accounting information. Throughout the
course we will illustrate applications of accounting principles with real examples(e.g. AOL, Boston Chicken,
etc.) and through the use of actual company filings

Course Prerequisites:
The course has no formal pre-requisites and no special skills are necessary. The quantitative aspects of the
course will require only elementary computational skills; however a calculator will be required. The project
will require elementary statistics, however, I will provide a tutorial for any students who do not have the
requisite expertise.

Course Materials
The following textbook is recommended: Financial Accounting-A Business Process Approach by Jane
Reimers (ISBN 0-13-078482-6) Any associated study guides are optional. I do not teach out of the
book, it is mainly for reference and additional exposition of the material covered in class.

Policies on Grading and Attendance

This course meets for only 7 weeks, with only one session per week. It is critical to your success that you
attend each session – if you cannot attend most of the classes then you should consider enrolling in the online
version of the course. It is better to come to class late, then to skip class all together. Office hours are not a
substitute for coming to class, therefore, I will not go over material covered in class with you if you have
missed class. More importantly, there will be numerous handouts (sample problems) distributed in class
which you may use on the exams. Unless you have prior approval from the instructor, you must
attend the section for which you are registered.
 Determination of Course Grades
Your overall score in the course will be computed using the following weights:
Three Projects ..... 15 %
Midterm Exam ... 25 %
Final Exam ..... 60 %
TOTAL 100 %

Your course grade is computed THREE ways:

Curve Method #1 : Based on Overall Course Score

Top 35 % = A Next lowest 35 % = B Bottom 30 % = C, D, or F

Curve Method #2 : Based on FINAL EXAM only

Top 35 % = A Next lowest 40 % = B Bottom 25 % = C, D, or F

Method #3 : NO CURVE - based on exams only

90-100 % = A 80-89 % = B 70-79 % = C Below 70% = D, or F

Your course grade is the HIGHEST grade under any of the three methods

Projects
The first project is an individual project and will take approximately 10 minutes for you to accomplish. In
order to do the other projects you will need to have a NETID from the university so you can access the
computers in the School of Management. You are going to have to get your NETID sometime at UTD, you
might as well do it now. It is also a good idea to get a university ID if you don’t have one by now. These
projects are meant to be group projects. You can decide how large you want your group to be as long as it
is greater than one. I will not assign you to a group, as graduate students I have faith you can accomplish this
on your own.

EXAMS

1. All exams will be in-class, open-notes exams. “Open-notes” means that you may utilize any handwritten
notes taken in class as well as out of class materials (such as homework problems) and any handouts from
class. The use of the text or any photocopied materials (including notes and study guides) will not be
permitted on exams. Unless you have prior approval from the instructor, you must take the exam in the
section for which you are registered.

2. You are not permitted to use any electronic communications devices during the exam. This explicitly
includes cell phones and pagers. You are not permitted to use a portable computer on the exam. You are
strongly urged to leave any electronic devices (except calculators) at home or in a locker on the day of the
exam.

3. Exams may be given in the auditorium, room SOM 1.118. If so, I will notify you the prior week.
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4. All students are required to present proof of identification at the time of the exams and quizzes.
Acceptable documentation must be a picture identification such as official UTD Comet Card, Passport, or
State approved drivers license.

Missed Exams:
5a. To receive a passing grade in the course, students MUST take all exams and quizzes. Under no
circumstances, none, zero, will a student be allowed to “substitute” one exam for a missed exam.

5b. Students missing an exam should contact me prior to the scheduled exam time (unless an emergency
situation arises which makes it impossible). Students with anticipated absences should contact me prior to
the absence. Failure to take the make-up exam at the agreed time and place will result in a grade of zero.

5c. If the makeup exam is not taken within 6 days, the student will receive a grade of zero. If the students
fails to take the makeup exam at the rescheduled time they will receive a grade of zero.

5d. Students are not permitted to attend class until they have taken the make-up exam.

5e. Students are only allowed to take one make-up exam during the semester. A student who misses a
second exam will not be allowed to take a make-up exam and will receive a zero on the missed exam.

6. M AKE-UP EXAMS WILL BE A DIFFERENT EXAM THAN THE ONE GIVEN IN CLASS AND WILL BE CLOSED -
BOOK, CLOSED NOTES .

Disposition of Exams
7. As per school policy, exams will be retained for one year and then destroyed.

Use of Computers and Recording Devices

Audio or videotaping of class lectures is prohibited. Students may use laptops
to record their notes, however, the computer must be silent with speakers muted. Students failing to follow
these rules will be asked to leave the classroom. Under no circumstances will students be allowed to use
their computers on exams. Students may print one copy of their notes for their exclusive use on the exam if
they desire, but they are prohibited from distributing their notes.

Academic Dishonesty
Candidates are expected to be above reproach in scholastic activities. Candidates who engage in scholastic
dishonesty are subject to disciplinary penalties, including the possibility of failure in the course and dismissal
from the University. “Scholastic dishonesty includes, but is not limited to cheating, plagiarism,
collusion, the submission for credit of any work or materials that are attributable in whole or in part
to another person, taking an examination for another person, any act designed to give unfair
advantage to a student or the attempt to commit such acts.” 1 Since scholastic dishonesty harms the

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(Regents’ Rules and Regulations, Part One, Chapter VI, Section 3, Subsection3.2, Subdivision 3.22

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individual, all candidates, and the integrity of the University, policies on scholastic dishonesty will be strictly
enforced.

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 Course Schedule

Week Topic Class Assignment

1 INTRODUCTION TO FINANCIAL STATEMENTS
- Regulatory Framework (SEC, FASB, GAAP) Chapter 1
Case: Continental Airlines
TRANSACTION ANALYSIS

2 REVENUE RECOGNITION
- Accrual Concept Chapter 2
- Capitalization and Amortization Case: Costco

INCOME STATEMENT Chapter 3

- Articulation with Balance Sheet Case: America Online
3

MIDTERM EXAM
6:15 – 7:45
EDGAR Project Due

ACCOUNTING ESTIMATES and ALLOWANCES Chapter 5

- Depreciation Case: Waste Management
- Accounts Receivable Chapter 7

TIME VALUE OF MONEY Handout

- Present Value
- Annuities
4 EARNINGS QUALITY Case: Boston Chicken
- Incentives for earnings management

PROJECT #2 EARNINGS QUALITY

Handout

MULTI-YEAR TRANSACTIONS
- Discount Rates Case: Transaction Systems Architects
- Leases
5
PROJECT #2 DUE
Discussion

FINANCING and CAPITAL STRUCTURE Chapter 8

-Bonds Chapter 9
-Equity
Ask me for Project 3 If you want to start on it

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 Topic Class Assignment
Week Syllabus
6 STATEMENT OF CASHFLOWS Chapter 10
- Indirect Method Case: American Airlines
Case: America Online

PROJECT #3 Financial Statement Analysis

Handout

FINANCIAL STATEMENT ANALYSIS

- Ratio Analysis Chapter 11
- Bankruptcy Analysis Case: Airline Industry
7
Financial Statement Project Due
Discussion

CORPORATE GOVERNANCE
- Sarbanes/Oxley
- Fraud Detection
REVIEW/ Course Evaluations

FINAL EXAM
October 6 – October 12
6:15 – 8:15