30404 - ACCOUNTING
Course taught in English
Go to class group/s: 25
Lezioni della classe erogate in presenza
Accounting is the language of business as it measures economic activity for decision-making. Financial statements are a key product of such measurement process and they play a key role in the communication between the company and business parties. External information users, such as investors, financial analysts and banks, use accounting information disclosed in financial statements to make their decisions and evaluations. Given that, it is important to understand key accounting concepts and principles according to which financial statement are prepared. The mission of this course is to provide the basic skills necessary to understand, prepare and analyze financial statements helping students become informed users of financial statements.
The most important topics that are covered during the course are the following:
- General accounting: double entry and accrual accounting systems basics.
- Accounting representation of operating (i.e., revenues, accounts receivable, cost of goods sold and inventories) and investing activities (i.e., property, plant and equipment as well as intangible assets).
- Accounting representation of transactions relative to debt, bonds, equity and dividend payment.
- Accounting representation of investment in other corporations.
- Preparation of financial statements (balance sheet, income statement and cash flow statement).
- Basic analysis of financial statements to assess firms’ performance and financial position.
- Understand the basic accounting concepts, key accounting principles, the rationale for the different accounting methods as well as discretion allowed in accounting choices and estimates.
- Apply the basic accounting concepts and key accounting principles in the preparation of the main financial statements.
- Recognize key elements in financial statements and the judgment underlying accounting choices and estimates to properly analyze financial statements for investment, credit and other evaluation decisions.
- Apply the double entry system to report accounting transactions as prescribed by general accounting rules (mainly by U.S. GAAP).
- Use accounting terminology to represent business transactions.
- Read and prepare basic financial statements.
- Analyze the accounting information presented in financial statements and apply effective analytic skills and tools to make business decisions or solve problems.
- Face-to-face lectures
- Exercises (exercises, database, software etc.)
- Case studies /Incidents (traditional, online)
The learning experience of this course includes face-to-face lectures, case discussions, real examples and distance learning. Distance learnings involves both short videos during which theoretical concepts are explained and live sessions during which the theory is applied to solve exercises.
Kellogg’s Annual Report is used throughout the course to provide context to the concepts we cover.
In addition to Kellogg’s, several real examples are used in class to facilitate the learning experience, illustrate how firms deal with accounting issues in reality and explore firms’ disclosure strategies. By using real financial statements, students also learn how to read annual reports and identify relevant information in a long and often hard-to-read document. As properly dealing with large volumes of written material is a key skill in the business world nowadays, enhancing students’ ability to handle a large amount of information and sift through it is useful in their future career.
Moreover, in additional to traditional exercises, students use Excel to prepare journal entries as well as financial statements. The usage of Excel facilitates their understanding of the accounting system and interconnections among accounting journal, ledger and financial statements. In addition, it helps students to develop their peculiar programming skills in relation to accounting issues. The ability of applying programming skills to business problems is crucial in today’s business world where coding and programming represent the new language of business.
Lastly, the course fosters active participation and discussion thus triggering students’ use of their communication skills to debate on technical issues. In particular, the usage of live sessions ensures that students can participate and interact at moment of solving exercises and discussing real examples.
With the purpose of measuring the acquisition of the above-mentioned learning outcomes, the students’ assessment is based on a written exam (100% of the final grade), consisting of exercises aimed to assess student's ability to:
- Apply the main accounting concepts and principles leart during the couse to properly represent business transactions.
- Apply analytical tools illustrated during the course to prepare financial statements..
- Analyze financial statements in a critical ways identifying managers' accounting choices and issues that can affect outsiders' valuation.
- Take, explain and discuss business decisions and investment choices using accounting information.
The exam also includes multiple choice questions to discuss, aimed to assess:
- Students learning level of the theoretical concepts and principles shared in the course.
- Students' ability to identify, explain and discuss complex accounting choices and measurement estimates.
- Students can take a partial written exam and complete the written exam at the end of the course. In this case the weight is: 50% for the partial exam and 50% for the end of term exam. Alternatively, students can take a final written exam that accounts for 100% of the final grade.
- In addition, during the course tests to get additional points are scheduled. As practice and continuous study are fundamental to properly learn and digest accounting concepts, the goal of the tests is to incentivize students to study on a regularly basis and identify potential gaps in their preparation. The additional points then are added to the final grade.
The main course material, for both attending and non-attending students, is:
- LIBBY, LIBBY, SHORT, Financial Accounting, McGraw-Hill, International Edition, 2013, 9th edition (the textbook is not mandatory but highly recommended).
In addition to the textbook, slides, teaching handouts and other materials (i.e., academic articles, newspaper articles, exercises and useful links, etc.) are provided during the course. Students need to refer to the Bboard platform.