30426 - BILANCIO - MODULO 1 / ACCOUNTING AND FINANCIAL STATEMENT ANALYSIS - MODULE 1

To feel comfortable in this course, students should be familiar with the notions of a management course. At beginning of the course, it is not expected any knowledge about the double-entry accounting system. Please note/1. Few years ago, Accounting 1 was a prerequisite for Accounting 2: id est, in the past you had to pass Accounting 1 exam before or in the same session of Accounting 2 to get the latter grade registered. Nowadays , the “prerequisite sequence” is no longer valid. That said, as Accounting 2 is the second part of an exam divided in two (Accounting), please keep in mind that all the notions you are going to learn in Accounting 1 will be asked and will be assumed as known to pass Accounting 2 exam. In short, although you can pass Accounting 2 before Accounting 1 exam, studying Accounting 1 is necessary to pass Accounting 2. Please note/2: Accounting 1 is not an intermediate exam. The grade of Accounting Module 1 and the grade of Accounting Module 2 will be merged into a single one in the GPA (code 30425, which is the average of Accounting 1 and Accounting 2); nevertheless, please keep in mind that once Accounting 1 is passed, then the grade is registered in the academic career of the student and will never be cancelled in future years (according to the rules in force at the date of drafting this Syllabus).

Accounting is the language of business, an important means of communication among various business parties. Among others, financial accounting speaks mainly to external information users, such as investors and financial analysts, who make decisions for many different purposes using the accounting information revealed in financial statements. Accounting 1 (30426) is the first Module of two (Accounting Module 2 is 30427); the aim of this course, overall, is to let students achieve knowledge and skills in respect of financial statements preparation, covering all basic accounting topics. In particular, students learn: - How to read and interpret main business transactions. - How to apply the double – entry bookkeeping techniques. - How to evaluate the main accounting items. - How to prepare a cash flow statement. - How to prepare a set of separate and consolidated financial statements. How to make a F/S reclassification and analysis. That said, the mission of this specific course is to provide to students the basic Accounting skills, focusing on the double-entry bookkeeping techniques and their application in the main transactions involving the accounts of the entities.  At the end of both courses 30426 and 30427, students should be able to manage, at a basic level, all the issues related to Financial Accounting.

The content of the course, overall (30426 and 30427), can be summarized as follows:

1. Understand the accounting methodology with reference to data gathering, processing, classification and recording using the "accounting equation" (A = L + SE) and then the double-entry accounting system.
2. Understand the techniques at the basis of financial reporting preparation (preparation of journal entries on the basis of the accrual principle, going concern principle,...). 
3. Understand the adjusting entries and identify the areas which are particularly subject to managerial discretion.
4. Correctly evaluate the main financial statement items, according to law and to accounting principles:
   • Accounting for revenues and receivables.
   • Accounting for inventories.
   • Accounting for non-current tangible and intangible assets.
   • Accounting for liabilities and bonds.
   • Accounting for owners'equity.
   • Accounting for investments in other corporations.
5. Compute and account for income taxes.
6. Prepare a cash flow statement.
7. Reclassify the F/S items according to different methodologies.
8. Analyze F/S with ratios.
9. Prepare consolidated financial statements.

The course makes reference, where necessary, to International Financial Reporting Standards (IAS/IFRS) and to the main differences compared to US GAAP.

• Accounting Module 1 30426 covers topics under items 1 to 4 of the above list (up to bonds).
• Accounting Module 2 30427 covers topics under 4 (cont'd from owners'equity) to 9 of the above list.

• Understand the techniques at the basis of financial reporting preparation.
• Describe the accounting methodology with reference to data gathering, processing, classification.
• Identify the critical elements underlying the application of the double-entry accounting system.
• Discern whether there is the need to prepare any adjusting entry on an accrual basis, identifying the areas which are particularly subject to managerial discretion.
• list and explain the general accounting principles underlying the preparation of the set of financial statements.
• Summarize and illustrate the theoretical tools needed to evaluate the following main financial statement items, according to law and to accounting principles:
  • Revenues and receivables.
  • Inventories.
  • Non-current tangible and intangible assets.
  • Liabilities and bonds.

• Use the "accounting equation" and then apply the double-entry accounting system.
• Prepare the periodical and adjusting entries for basic transactions.
• Compose a full set of financial statements on the basis of simple transactions as above listed.
• Understand the techniques at the basis of financial reporting preparation
• Describe the accounting methodology with reference to data gathering, processing, classification
• Analyze, evaluate, calculate and prepare the journal entries related to the following financial statement items, according to law and to accounting principles:
  • Revenues and receivables.
  • Inventories.
  • Non-current tangible and intangible assets.
  • Liabilities and bonds.

• Face-to-face lectures
• Online lectures
• Exercises (exercises, database, software etc.)
• Case studies /Incidents (traditional, online)

It is a "basic" course, hence the learning experience is mainly based on face-to-face lectures.Notwithstanding the above, lessons are interactive, as accounting is a very practical course: real-life cases are presented during teaching, with the goal of linking the explanation to the “real world of business and accounts”.

• After each set of lectures regarding a certain topic, review sessions are discussed in class: the goal of the review session consists in showing the students how to approach the preparation of journal entries and all other tasks concerning Accounting.
• To actively participate to review sessions, students need to use their communication and interpersonal skills.
• Additional materials (exercises, slides, et cetera) useful to get trained for the exam are posted on Bboard.

The final grade of the course 30425 Accounting, which is registered in the GPA, is determined as the average of the 30426 and 30427 exams grade.

All students are graded based on a comprehensive exam (there are no partial exams), which is based on a mix of open questions, closed questions and exercises, which aims to assess the student’s learning level of the theoretical notions and the main concepts, methods and tools shared in the course. Final grade is rounded (please see also below).

The exam is on a 31-point basis. Nevertheless, during the semester students can get (up to) 8 points by carrying out two quizzes via Blackboard, which will be deployed on specific dates. These (up to) 8 points are substitutive of some exercises of the exam.

Please, find hereinafter further details about the assessment and grading methods. Please note: additional further information and details will be provided timely on Blackboard.

           I.            WRITTEN EXAM (valid for both attending and not-attending students)

Students must register to seat for the exam.

At the end of the term, all students have a written exam; also depending on the evolution of the pandemic scenario, it is likely that the exam will be online, given through Blackboard and will use the software Respondus Monitor.

The exam is graded on a 31,00 points basis. The question types can be basically grouped as follows:

Closed-ended questions (Multiple Choice and “fill in the blank” or other types of closed-ended questions) which are worth approx. 10-14 points, aimed at assessing the knowledge and understanding of the students, as follows:

• Knowledge of the accounting methodology with reference to data gathering, processing, classification.
• Ability to identify the critical elements underlying the application of the double-entry accounting system.
• Ability to identify and describe the criteria needed to prepare any adjusting entry on an accrual basis.
• Knowledge of the general accounting principles underlying the preparation of the set of financial statements.
• Ability to summarize and illustrate the theoretical tools needed to evaluate:

-          Revenues and receivables.

-          Inventories.

-          Non-current tangible and intangible assets.

-          Liabilities and bonds.

Open-ended questions (journal entries or other types of open-ended questions, e.g. exercises) which are worth approx. 17-21 points aimed at assessing the application of the knowledge and understanding of the students, as follows:

• Ability to use the "accounting equation" and to apply the double-entry accounting system.
• Ability to prepare the periodical and adjusting entries for basic transactions.
• Ability to compose a full set of financial statements on the basis of simple transactions as above listed.
• Ability to analyze, evaluate, calculate and prepare the journal entries related to the following financial statement items, according to law and to accounting principles:

-          Revenues and receivables.

-          Inventories.

-          Non-current tangible and intangible assets.

-          Liabilities and bonds

        II.            BONUS QUIZZES (valid for both attending and not-attending students)

During the course, 2 short quizzes are given to the students via BlackBoard. These tests consist of either closed-ended and open-ended questions. They approximately last 10-15 minutes and their main goal is to foster continuous assessment.

The quizzes do not require the use of Respondus Monitor.

The release date of the quizzes is scheduled on the following dates:

·         Quiz 1: October 09 (date TBC) and covers chapters 1 to 4 of the book (other details will be provided in a separate file).

·         Quiz 2: December 03 and covers chapters 6 to 9 of the book (other details will be provided in a separate file) (Chapter 10 is not assessed in the quizzes).

The exact hour in which the quiz will be deployed will be announced via Blackboard, after checking with the class representatives that no other academic activities overlap with the timing of the quizzes. It is warmly recommended that you don’t schedule any personal activity on that day (flights, meetings, etc).

Each of the two quizzes is graded between 0,00 and 4,00 points and at end of the course, points of the two quizzes are added up. Hence, a student can achieve up to 8,00 points as “bonus quizzes”.

Such (up to) 8,00 “bonus points” give the following: on the date of the exam, the student is allowed TO SKIP some exercises (chosen by the instructors and clearly visible in the exam) which are automatically graded with the points scored in the quizzes.

In other words, these points are not “in addition to” the grade of the exam, but rather these points are “SUBSTITUTIVE” of exercises in the exam which are weighed 8 points.

In light of the above, all students who are happy with their total points scored in the two quizzes can make a 23-points-exam, as they automatically get a certain, predefined number of “bonus points” which override a number of exercises in the exam.

Otherwise, whether a student is unhappy with the points scored in the “bonus quizzes”, he/she is allowed to choose to make all the exercises given in the exam; in this scenario, accordingly, the points scored in the exam override the points scored in the Bonus Quizzes during the semester. This question (“do you want to take the bonus quizzes points or not?”) is asked at beginning of the exam.

Furthermore, please remember:

·         the exam lasts the same time both for those who are happy with the quizzes points and for those who are unhappy with the quizzes points;

·         partial grading won’t be activated for most of (or all) the Bonus Quizzes questions, so for example if you have a 3-points question, and you have three numbers to answer, and you enter correct two out of three, you likely are getting zero points anyway.

In short, the main advantages of the quizzes are:

·         More time to take the exam

·         A part of the grade is assigned in advance

The “bonus quizzes” may be used in the following exam sessions:

•                      17/01/2022

•                      02/02/2022

•                      12/07/2022

•                      25/08/2022

In any possible scenario (absence, failure, withdraw) occurring in one exam session, the “bonus quizzes” is still valid and still may be used in the subsequent sessions, up to the session dated 25/08/2022 (included).

After 25/08/2022 the bonus quizzes is no longer valid.

      III.            ATTENDANCE (valid only for attending students)

Attendance of students is assessed through the “Attendance” procedure. To be considered “attending”, students are required to be present on more than 75% of lessons (at least 17 lectures over 22). An attendance registered “late” is not valid.

Basically, attendance does NOT give any extra point. There are no differences between the assessment and grading methods for attending and not attending students.

Nevertheless, if in one (or more) exam sessions the grades will be curved upwards, the “attending students” will receive with priority, and/or more consistently, extra points in respect to the “not-attending students”.

This is a decision which rests at the sole discretion of the instructors and on an exam “session-by-session” basis, which means that no expectations of any kind can be claimed on this.

Please note. Following is a clarification about roundings. When adding up the points of the quizzes with the points scored in the exam, the grade of the quiz stays as it is, with only the final grade of the exam 30426 being rounded, and then rounded again with 30427 to make an only grade 30425 in the GPA (please read paragraph “PREREQUISITES” above).

So for example if a student obtains an overall score on the quizzes of 6.5 out of 8, and the points of the exam are 20.25 out of 23, the total grade of the exam is 6.5 + 20.25 = 26.75 which is then rounded to 27 as final grade of Accounting 1 (30426).

If then the same student gets 28 in Accounting 2 (30427), then the final total grade in the GPA of the student will be [(27+28)/2] = 27.50 which is rounded as 28 under the course code 30425 “Accounting”.

The course material is exclusively represented by:

• LIBBY, LIBBY, HODGE, Financial Accounting, McGraw-Hill, International Edition, 2016, 9th edition. More detailed information on chapters included and excluded are posted on Bboard during course.
• Slides - provided through Bboard.
• The course materials (e.g., hands outs and teaching notes) are regularly downloadable from Bboard platform. Teachers make the materials available throughout the course.