May 28, 2024  
2020-2021 Course Catalog 
2020-2021 Course Catalog [ARCHIVED CATALOG]

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ACC 132 - Principles of Accounting II

Credits: 4
Lecture Hours: 4
Lab Hours: 0
Practicum Hours: 0
Work Experience: 0
Course Type: General

A continuation of Principles of Accounting I. Introduces accounting procedures related to corporations, manufacturing and branch operations. Course also includes an introduction to capital budgeting, analysis of financial statements and decision-making by managers.
Prerequisite: Successful completion of ACC 131  with a grade of “C” or above
  1. Assess the impact of long term financing
    1. Calculate the potential effect of long-term borrowing on the earnings per share of a corporation
    2. Describe the characteristics of bonds
    3. List advantages and disadvantages of financing with long-term debt
    4. Explain how interest rates affect bond prices
    5. Explain why bonds sell at premium or a discount
    6. Calculate the present value of bonds payable
    7. Prepare an amortization table
    8. Journalize entries for bonds payable
    9. Describe bond sinking funds
    10. Journalize entries for bond redemptions
    11. Journalize entries for the purchase, interest, discount and premium amortization, and sale of bond investments
    12. Prepare a corporation balance sheet
    13. Calculate the number of times interest charges are earned
    14. Interpret the number of times interest charges are earned
  2. Develop a statement of cash flows
    1. Explain the purpose of the statement of cash flows
    2. Classify cash receipts and cash payments as operating, investing or financing activities in the statement of cash flows
    3. Analyze accounting transactions to determine affects on cash flows
    4. Compute the amount of net cash provided by operating activities using the indirect method
    5. Explain steps used to prepare a statement of cash flows
    6. Prepare a statement of cash flows
    7. Calculate the free cash flow
    8. Interpret the free cash flow
  3. Assess application of financial statement analysis in determination of solvency and profitability
    1. List basic financial statement analytical procedures
    2. Identify sources of information for financial statement analysis
    3. Explain and prepare a vertical analysis of financial statements
    4. Explain and prepare a horizontal analysis of financial statements
    5. Identify and compute ratios used to evaluate short-term liquidity, profitability, and solvency
    6. Prepare a written report using financial statement analysis on the data of a publically traded company
  4. Differentiate managerial accounting from financial accounting
    1. Evaluate the organizational role of management accountants
    2. Explain the difference between product costs and period costs
    3. Define and illustrate materials, factory labor and factory overhead costs
    4. Describe accounting systems used by manufacturing businesses
  5. Distinguish between the two major types of cost accumulation systems employed by manufacturing companies, including job order, process costing and activity-based costing
    1. Distinguish between job order costing and process costing system
    2. Explain and illustrate the physical flows and cost flows for a job order cost manufacturer and a process cost manufacturer
    3. Describe the concepts of underapplied and overapplied manufacturing overhead 
    4. Prepare job order cost reports and information
    5. Define equivalent units of production for the process costing systems
    6. Prepare and use a production cost report to calculate completed and partially completed equivalent units and allocate costs in ending inventory and work in process under a process costing system
    7. Prepare journal entries for transactions of a manufacturer
    8. Describe the concepts, benefits and limitations of activity-based costing
    9. Calculate and compare unit manufacturing costs under traditional and activity-based costing systems
    10. Prepare and use costing information for decision making

6. Explain the analysis of cost behavior and cost-volume-profit relationships in planning operations

  1. Classify costs by their behavior as variable, fixed or mixed costs
  2. Differentiate variable, fixed, and mixed costs
  3. Calculate the contribution margin, the contribution margin ratio and the unit contribution margin
  4. Explain how the contribution margin, the contribution margin ratio and the unit contribution margin may be useful to managers
  5. Calculate the break-even point using the unit contribution margin
  6. Calculate the volume necessary to achieve a target profit
  7. Chart the break-even point and the volume necessary to achieve a target profit
  8. Compute the margin of safety and the operating leverage
  9. Explain how managers use cost-volume-profit analysis to consider changes in the business environment
  10. Explain the differences between absorption costing and variable costing
  11. Compare income statements and net income under absorption and variable costing systems and describe situations where each may be used

7. Analyze budgeting

  1. Define budgeting
  2. List the objective of budgeting
  3. Describe the impact of budgeting on human behavior
  4. Identify the basic elements of the budget process
  5. Differentiate between operating and financial budgets
  6. Explain flexible budgeting
  7. Construct a flexible budget
  8. Use computers in budgeting
  9. Prepare a master budget for manufacturing business
  10. Prepare the basic income statement budgets for a manufacturing business
  11. Prepare balance sheet budgets for a manufacturing business

8. Conduct performance evaluation using variances from standard costs

  1. Differentiate between ideal and normal standard costs
  2. Explain and illustrate how standards are established for businesses
  3. Calculate and interpret direct materials price and quantity variances
  4. Calculate and interpret direct labor rate and time variances
  5. Calculate and interpret factory overhead controllable and volume variances
  6. Journalize the entries for recording standards in the accounts
  7. Prepare an income statement that includes variances from standard
  8. Explain how standards may be used for nonmanufacturing expenses
  9. Provide examples of nonfinacial performance measures
  10. Explain examples of nonfinacial performance measures

9. Develop performance evaluation for decentralized operations

  1. Explain the advantages and disadvantages of decentralized operations
  2. Prepare a responsibility accounting report for a cost center
  3. Prepare responsibility accounting reports for a profit center
  4. Calculate and interpret the rate of return on investment
  5. Calculate the residual income and the balanced scorecard for an investment center
  6. Interpret the residual income and the balanced scorecard for an investment center

10.Analyze management’s decision making process and incremental analysis

  1. Prepare differential analysis reports for management decisions
  2. Make decisions involving orders at a special price
  3. Make decisions involving selling or processing further
  4. Make decisions involving discontinuing an unprofitable segment
  5. Make decisions between manufacturing or purchasing a part
  6. Make decisions to retain or replace equipment
  7. Make decisions accepting additional business at a special price

11. Evaluate tools and techniques used to analyze and interpret capital investments

  1. Explain the nature and importance of capital investment analysis
  2. Evaluate capital investment proposals using annual rate of return, cash payback, and discounted cash flow methods
  3. Describe factors that complicate capital investment analysis


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