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The Hong Kong University of Science & Technology

Department of Accounting
ACCT2010 Accounting Principle I
Introduction to Financial Accounting
Course Outline L3, L4, L5 Spring 2015
Instructor: Dr. Peter Chen
Room 6011(LKS Building), Tel.2358-7572.
Classes: Monday, Wednesday, and Friday

M 15:00-16:20; F 10:30-11:50 (LSK1010)

W 13:30-14:50; F 13:30-14:50 (LSK1011)
M 12:00-13:20; W12:00-13:20 (LSK1011)

Office Hours: Wednesday 15:00 - 17:00, or by appointment.

Assistant: Leung, Carrie; Tel. 2358-7580
E-mail: ;
I. Course Objectives
Accounting is the language of business. In this course you will learn how to "speak" and "read"
this new language. The course is designed to provide an overview of financial accounting so that,
upon completion of the course, you will be able to read, interpret and analyze corporate financial
reports. In particular, you should:
1. Develop a comprehensive and well-founded knowledge of financial accounting, including
a. Understand the accounting categories: assets, liabilities, equity, revenues and expenses;
b. Understand how an accounting system keeps track of information;
c. Understand how generally accepted accounting principles (GAAP) influence what is
recorded in the books of an entity;
d. Prepare a balance sheet, income statement and cash flow statement;
e. Read, interpret and analyse a set of financial statements.
2. Understand the role of financial accounting in the decision-making process of business
organizations. Apply financial accounting frameworks to business situations.
3. Be able to form critical judgment covering an ability to identify and define accounting and
business problems, apply analytical and quantitative techniques, make and justify decisions;
4. Be effective in communication through collection, analysis and organization of information
and ideas and their clear transmission;
5. Demonstrate teamwork, independence and creativity including working, learning and problem
solving as a team and independently;
6. Demonstrate ethical and social understanding including a knowledge and respect of ethics and
ethical standards in accounting and an understanding of social and civic responsibility.
II. Textbook and Supplementary Readings



Short, Libby, Libby, and Giullian. Financial Accounting, 8th edition (2014), McGrawHill/Irwin. (Required)
Handouts: you will be able to download the PowerPoint slides and/or PDF documents used
in class from the LMES ACCT2010 website. You need to either print the notes/documents
or bring your computer with the files on it to class. The handouts will be posted to the
website by Sunday evening every week.

Grading Scheme:
In-class group exercises
Mid-term exam
Final exam




1. In-class group exercise allows a maximum 4 students to form a group. It is handed in within
the class; late hand-in is not accepted. Only one solution from the group should be handed in.
Students of the group receive the same mark on the handed-in exercise.
2. No make-up exam will be offered for the exams except for medical reasons supported by
proper documentation. You must submit the medical report within 24 hours after the exam
is taken (the weight of the mid-term exam will be added to the final exam).

IV. Conduct of This Course

1. Class Preparation: The general approach of this course is lecture, problem-solving and
discussion of matters relevant to the topic. Students who read the textbook ahead of attending
class will benefit most from the class presentation. During class, various problems will be
reviewed as examples of the material being covered. I strongly encourage you to prepare for
class by attempting these problems prior to arriving at class. A very good guidance for your
self-study of these problems is the demonstration cases at the end of each chapter in the
textbook. Past experience has indicated that those students who work consistently throughout
the term fare better in their overall course grade.
2. Practice Problems: I do not assign homework. Instead, a set of textbook problems from each
chapter are recommended for your practice. Practice problems aim to improve your
understanding of and familiarity with the topics lectured in class. However, the amount of
practice problems assigned is very minimal, you are strongly encouraged to do additional
practice while preparing for the examinations. The full set of solutions to all practice
problems at the end of each chapter will be posted on the course website when the chapter is

3. In-class group exercises. There are approximately ten group exercises to be completed in class.
Group exercises provide a setting where you can ask your fellow students and, better yet,
explain to them how to solve a problem. I will collect one answer per group; all group
exercises are equally weighted.
4. Mid-term exam and Final Exam: The mid-term exam covers chapters (1-6), 2 hours. The
final exam will last 2.5 hours and will cover the chapters (7-12).

Asking Questions on LMES Discussion Board: Please use the discussion board on LMES to
ask questions. I do NOT answer any questions sent by emails. This benefits everyone
concerns the questioner, the instructor and other students. I will check the discussion board
and post replies regularly. You are strongly encouraged to reply to other students questions
on LMES as part of a supportive learning environment.
I strongly encourage you to raise your questions on the discussion board as soon as your
problems arise. Please do not allow your puzzles or confusions to accumulate because it will
be more difficult to solve them later. In this course, each chapter builds on the previous
chapter(s). It is like constructing a building the foundation first, then the ground floor, then
the first floor and so on. If you have problems in the earlier part(s) you will not be able to
understand the later part(s). Moreover, the level of difficulty increases as the course

Course Schedule: The course schedule is given at the end of this course outline. The topics
which are denoted as "SKIP" will not appear in the examinations and will not be covered in
the class. You may familiarize yourselves with the topics denoted as SKIP and you are
welcome to discuss with the instructor if you have any difficulty learning those materials.
Changes to the course schedule may be made, if necessary. It is your sole responsibility to
find out what has been announced during your absence from the class.

7. Office Hours: Regular office hours are on Wednesday afternoon, from 15:00 to 17:00. Please
email the instructor to make an appointment if the office hours do not fit into your schedule.
8. Classroom Behaviour and Participation: Maintaining proper discipline and conducting
yourself in a responsible manner in the class are of utmost importance for not only this course
but also for your own personal development. At the same time, students are encouraged to
raise questions to the instructor, both during the class and outside the class, and to participate
actively in the class discussions.

Tentative Topics for Class Coverage (Subject to Change)



Overview of corporate financial reporting
Class review: E1-8; P1-1

Practice Problems

Feb. 2-6
Feb 9 - 13

Feb 16 - 20

Feb 23 27

March 2 - 6

Adjustments and financial statements

(SKIP trial balance)
Class review: E4-6; E4-14; COMP4-1

March 9-13

E6-3, 8, 12, 13, 16, 18;

P-5; AP6-1, 2, 3.

March 16- 23

Sales revenue, receivables, and cash

(SKIP pp.293-298
Class Review: P6-1; P6-2; E6-16; E6-18; P6-5
Cost of goods sold and inventory
(SKIP pp 352-353; Supplement A)
Class Review: M7-2; M7-4 ; E7-1; E7-11; E7-14; P7-2
(Chapter 1-6) exam venue to be announced

Property, plant, and equipment

(SKIP pp404-410)
Class review: E8-4; E8-8; E8-13; E8-22
Current Liabilities (SKIP Supplements A and B.)
Time value of money
Class review: P9-6; E9-17; E9-18; P9-12; AP9-7

E8-5, 6, 7, 10, 14, 15,

P8-1, 3, 6, 11.

March 25
March 27-April

Investing and financing decisions and the balance sheet

Class review: E2-8; P2-3; E2-17; E2-18
Operating decisions and the income statement
Class Review: E3-2; E3- 9; AP3-4

E1- 4, 5, 9, 12; P1-2;

AP1-1, 2.
E2-5 ,8, 9, 12, 16;
P2-1, 2, 4, 5.
P3-1, 4 (Skip required
5), 7.
E4-7, 10, 12, 14;
P4-2, 4; COMP4-2

E7-3, 7, 8, 12, 18;

P7-1, 4, 5, 9.

April 8April15

April 17-20


Bonds and long-term debts (SKIP pp 510-512;5155170)

Class review: E10-8; E10-16

E10-4, 5, 10;
P10-1, 3

April 22-27


Owners equity (Skip Supplement

E11-4, 6, 8, 11, 15, 18 ;

P11-1, 2, 5, 9.

Class Review: E11-1; E11-9; P11-9

April 29May2,5,7, 9


Statement of cash flows (Skip Supplement A)

Class Review: E13-4; E13-9; E13-14; E13- 17;
P13-4 (required: 2)
Final exam

E9-1, 4, 5, 10; P9-4, 7

E9-14, 19, 25;
P9-11, 13, 14.

E12-3, 7, 10, 12, 15,

16, 21; P12-1, 2.