SCHOOL OF ACCOUNTANCY

COLLEGE OF BUSINESS
UNIVERSITI UTARA MALAYSIA
COURSE CODE
COURSE
PRE-REQUISITE

1.0

:
:
:

BKAF1023
INTRODUCTION TO FINANCIAL ACCOUNTING
NONE

SYNOPSIS
This course aims at introducing students to the fundamentals of bookkeeping and
principles of financial accounting. It explains the accounting equation, identifies
steps to complete the accounting cycle and discusses the role of accounting
records in organization. It further explains the differences between cash and
accrual accounting, the nature of general purpose financial accounting statements,
the role of accounting information in making economic decisions and discusses
the significance of accounting systems in providing relevant and reliable
information. It also exposes students to financial statement analysis and
interpretation of financial ratios.

2.0

3.0

COURSE OBJECTIVES
1.

To enable students to understand accounting principles and the function

of accounting information in assisting the decisions making.

2.

To assist students in financial information analysis and the usage of

financial information extracted from the annual reports from different
types of businesses.

LEARNING OUTCOMES
After completing the course, students should be able to:
1.

Explain and apply the accounting principles, accounting process and the
accounting cycle in business transactions.

4.0

2.

Explain the different types of businesses and prepare financial statements.

3.

Prepare bank reconciliations and explain basic procedures for internal

control of cash .

4.

Perform financial statements analysis using relevant financial ratios and

make appropriate interpretations based on information available.

COURSE CONTENT

NO /
W
E
E
K

TOPIC

REFERENCES

1.0
1.0 ACCOUNTING ENVIRONMENT
(Week 1) 1.1 What is Accounting
1.2 Accounting Profession
1.3 Process and flow of accounting information
1.4 Accounting as a business language
1.5 Internal and External users of Accounting
Information
1.6 Financial accounting vs Management accounting
1.7 Generally Accepted Accounting Principles (GAAP)
1.8 Professional Accounting Bodies and Standard
Setting in Malaysia
1.9 Statutory and Capital market requirements
- Companies Act 1965 (Revised)
- KLSE Listing Requirements
- Financial Reporting Act 1997
1.10 International Accounting Standards Board (IASB)
1.11 Nature, characteristics and type of business
2.0
2 .0 ACCOUNTING EQUATION AND FINANCIAL
(Week 2) STATEMENTS
2.1 Definition of assets, liabilities, owners
equity, revenue and expenses.
2.2 Accounting equation
- Effect of business transaction on accounting
equation
2.3 Financial statement

HOUR

3
Reeve et al. (2012)
(Chap. 1)

3
Reeve at al. (2012)
(Chap. 1)
MFRS 101

Statement of Profit or Loss and Other

Comprehensive Income
Statement of Changes in Equity
Statement of Financial Position
Statement of Cash Flows

3.0
(Week
3&4)

3.0 RECORDING TRANSACTION

3.1 Accounts
3.2 Double-entry system
3.3 Journal
3.4 Ledger accounts
3.5 Balancing off account
3.6 Trial balance

4.0
(Week
4&5)

4.0 MEASUREMENT OF BUSINESS INCOME

4.1 Cash accounting vs accrual accounting
4.2 Expenses and revenues concept
4.3 Permanent and temporary account
4.4 Accounting cycle

5.0
(Week
5&6)

5.0 RECORDING YEAR END ADJUSTMENTS

AND PREPARING FINANCIAL STATEMENTS
(MFRS101)
5.1 Types of adjusting entries
5.2 Adjustment process
5.3 Preparing worksheet: trial balance, adjusting entries,
adjusted trial balance, financial statements
5.4 Correction of Error
- Types of errors
- Errors revealed by trial balance and their
corrections
- Errors requiring more than two entries

6.0
(Week 7 &
8)

6.0 ACCOUNTING FOR MERCHANDISING

6.1 Merchandising Transactions
- Purchase and Sales
- Discounts
- Returns and Allowances
- Freight Costs
6.2 Inventory recording systems
- Periodic Inventory System
- Perpetual Inventory System
6.3 Adjusting Entries
6.4 Financial Statements

4
Reeve at al. (2012)
(Chap.2)

3
Reeve at al. (2012)
(Chap. 3)

5
Reeve at al. (2012)
(Chap. 3 & 4)
MFRS 101

6
Reeve at al. (2012)
(Chap. 5 & 6)

6.5 Closing Entries

6.6 Post-Closing Trial Balance
6.7 Subsidiary Ledgers
- Account Receivable
- Account Payable
6.8 Special Journal
- Sales Journal
- Cash Receipts Journal
- Purchases Journal
- Cash Payments Journal
7.0
(Week
9&10)

7.0 ACCOUNTING FOR MANUFACTURING

OPERATIONS
7.1 Nature of manufacturing operation
7.2 Manufacturing cost concept
7.3 Product cost v. period cost
7.4 Financial statements for manufacturing firms

8.0
(Week
10&11)

8.0 ACCOUNTING FOR PARTNERSHIP

8.1 Characteristics of partnership
8.2 Financial statements of partnership

9.0
(Week
11&12)

9.0 ACCOUNTING FOR COMPANIES

9.1 Classification of companies
9.2 Company formation
9.3 Structure of companys share capital
9.4 Types of shares and debentures

10.0
(Week
12&13)

10.0 INTERNAL CONTROL & CASH

MANAGEMENT
10.1 Characteristics of effective internal control
system and internal control for cash
10.2 Petty cash system
10.3 Bank reconciliation statement

11.0
(Week 13
&14)

11.0 FINANCIAL STATEMENT ANALYSIS

11.1 Basics of Financial Statement Analysis
11.2 Horizontal Analysis
11.3 Vertical Analysis
11.4 Ratio Analysis:
- Liquidity Ratios
- Profitability Ratios
- Solvency Ratios

Wild et al. (2012)

(Chap.18)

Larson et al.(2007)
(Chap. 6)
MFRS 101
3
Reeve at al. (2012)
(Chap.12)
3
Reeve at al. (2012)
(Chap. 13)

3
Reeve at al. (2012)
(Chap. 8)

5
Reeve at al. (2012)
(Chap. 17)
MFRS 101

5.0

11.5 Analysis using Excel

11.6 Interpretation of Analysis Results
11.7 Limitation of ratio analysis
REFERENCES
Main Reference
Reeve, J.M., Warren, C.S. & Duchac, J.E. (2012). Principles of Accounting, 24th
Edition. South Western-Cengage Learning: United States.
Wild,J.J., Shaw, K.W., Chiapetta,B. & Kwok,W. (2013).Principles of Accounting.
Mc Graw Hill: United States.
Larson, K.D., Wild, J.J. & Chiappetta. B, Ropidah, O., Haslinda, H., Aryati, J.S.
& Liana, M. (2007) Accounting Principles, 2nd Edition. Mc Graw Hill: Malaysia
Additional References
Rosli,M., Junaidah, H.A., Noor, A. et. al. (2011). Accounting-A Malaysian
Perspective, 4th Edition (Special Adaptation from Accounting 22e by Warren,
Reeves and Duchac, 2006). Cengage: Singapore.
Malaysian Accounting Standard Board (2011). Malaysian Financial Reporting
Standards (MFRS 101). Kuala Lumpur, Malaysia.
Larson, K.D., Wild, J.J., & Chiappetta.B. (2009). Principles of Accounting, 19th
Edition. McGraw Hill: United States.
Powers, M., & Needles, B.E.J. (2010). Financial Accounting, 10th Edition. SouthWestern Cengage Learning: United States.
Ninth Schedule, Companies Act 1965.

5.0 TEACHING METHODOLOGY

This course is conducted for fourteen weeks, comprising of two hours of lecture
and one and half hour of tutorial class per week. The teaching and learning
activities include group discussion, tutorials, as well as quizzes given from time to
time throughout the semester. Power-point presentation or overhead slides for the
lectures are available on the e-learning website or lecturers web site. Meanwhile
tutorial questions are mostly selected from the textbook.

6.0 ASSESSMENT
Course Work:
Final Examination

40%
60%
100%

7.0 ATTENDANCE
Students are required to fulfill at least 80% of class attendance in order to qualify
them to take the final examination as governed by the Universiti Utara Malaysia
regulations. Students who fail to meet the above requirements for whatsoever
reasons will be barred from taking the final examination.
8.0 ACADEMIC DISHONEST
Candidates who are accused of academic dishonesty will face the University
Board of Academic Misconduct. Students are reminded that academic dishonesty
is the most serious academic offence. Examples of academic dishonesty are
cheating and plagiarism, bringing in notes during examination, taking the
examination on behalf of another student and so on. Once the student is convicted
of the above offence, the examination result will be with-held and annulled and/
or other serious penalties may be taken against the student.