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: khurramabbas@cuisahiwal.edu.pk
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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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