Syllabus
Intermediate Accounting I - ACCT 304
Fall 2003
The Professor Formerly Known as Dr. Kenneth J. Smith

This course will extend depth and breadth of the financial theory and practice presented in the principles level of accounting. It builds on accounting principles by examining in detail topics that are critical to the process of understanding, preparing, interpreting, and using financial statements that comply with generally accepted accounting principles (GAAP). It will entail study and application of GAAP for income measurement, asset and liability valuation, and financial statement presentation, and the requisite processes involved therein. The case method of instruction will be used extensively in this course.

Students will be assigned to teams of four in which they will often work together both inside and outside of class to deal with the accounting issues under study and present their conclusions to the rest of the class. Specifically, student teams be work to correct financial statements of a fictitious company, and in doing so, learn about accounting for income taxes, accounting for leases and pensions, book and tax depreciation, debt amortization, segment reporting, and note disclosures. Upon completion of the course, students should be able to read, understand, prepare, explain, and critically evaluate information contained in the financial statements of a small to medium sized company. This approach should better prepare each student to take a leadership role in preparing, reading, understanding, explaining, and critically evaluating information contained in the financial statements of small to medium sized companies. These skills are critical to succeeding in a number of professions including financial consulting, public accounting, information systems, banking and investment banking, and any other profession that involves financial statement analysis. Table 1 below presents the accounting and reporting topics presented in the Business Activity Model this semester.

The objective of this course is to prepare students for careers in public and private accounting, financial consulting, management, and management advisory services. Specifically, the goals are to: 1) promote technical competency; 2) advance critical thinking; 3) develop portable research skills; 4) develop oral and written communication skills; and, 5) motivate students for their chosen profession. See Table 2 below for a detailed listing of Business Activity Model Goals and Action Plan.

This class will extensively use e-mail and the course home page to promote communication between the professor and the students and to facilitate the progression of the course. Students are encouraged to use e-mail to ask me questions that may arise concerning the subject matter of the course, particularly if they cannot meet with me during scheduled office hours ,and mutually convenience alternative hours cannot be scheduled.

In order to ensure timely response to pressing questions, please go to Computer Services and obtain an e-mail account at your earliest convenience. If you need to contact me regarding anything you may contact me by e-mail at profks@juno.com. I monitor my incoming messages seven days a week, so may feel free to send me a message any time, any day with any questions that you may have.

Extensive class participation in case discussion and presentation of answers to classroom exercises is required for successful completion of the course. Class members must read all of the assigned exercises, problems, cases, and requirements and to prepare for class as requested.

At the instructor's discretion, students may be asked to present their material to the class for discussion. A grade will be assigned to the participation based on the quality of the presentation. Daily preparation is required as your participation grade will be significantly impacted by your performance during the discussions as either a presenter or as a member of the audience.

Insightful comments or questions that relate to class material will be rewarded with higher participation grades, lower grades will be assigned for simple clarification questions, and grade deductions will be charged to those who attempt to delay, confuse, or embarrass the professor. Those who consistently participate will be assigned higher grades than those who participate on an infrequent basis.

In the event that the professor notices that a significant number of students are coming to class unprepared to discuss assigned exercises or cases, he may, at his option, administer unannounced quizzes that will be factored into the calculation of the final course grade. Attendance will also be factored into the final course grade.

Regular class attendance is mandatory for successful assimilation of the subject matter presented in this course. Attendance will be checked daily. If you have fewer than three unexcused absences during the semester, you will be eligible for the curves that I put on each test. (That is, if you have two or fewer unexcused absences, the curves that are incorporated into each test will be added to your final grade, otherwise, they will not be added.) A written doctor's note is required to obtain an excused absence. NO OTHER REASON FOR MISSING CLASS WILL BE EXCUSED. (That is why you are allowed two unexcused absences.) Homework will be regularly checked with no submission of late papers allowed. In addition, no make-up examinations will be administered without a written doctor's note. It is strongly suggested that you obtain the telephone number of a classmate to promptly receive any missed assignments. If you are so inclined not to attend class regularly, I say to you: "GO AHEAD...MAKE MY SEMESTER!!"

Also, in accordance with the SSU "Ghost Policy", if you miss the first two classes of the semester and fail to provide me with a legitimate reason for failing to attend class, you will be deregistered.

It is expected that students have a reasonable understanding of the material covered in principles of financial accounting. Conduct and courtesy requirements are those expected of professionals in the actual business world. Students will be required to sign a statement acknowledging their understanding of the requirements of this course and a willingness to abide by the university's academic integrity policy.

Commencing the Fall, 1995 semester, the Department of Accounting and Legal Studies placed in effect a new prerequisite for all students wishing to matriculate in Intermediate Accounting II ‑ successful completion of the Accounting Program Admission Test (APAT). The Candidate Information Booklet distributed by the Psychological Corporation notes on page 11 that �The primary purpose of the Accounting Program Admission Test is to provide colleges and universities with a standardized measure of achievement in elementary accounting. Institutions may use this measure to evaluate their first‑year accounting programs as well as individual student performance relative to a national norm. Some schools may require APAT scores as part of their admissions requirements to upper division accounting programs� (emphasis added).

The APAT test was developed by the Psychological Corporation and a committee of accounting professionals and educators. The examination�s focus is on elementary financial and managerial accounting principles typically found in an elementary accounting textbook. The test consists of 75 multiple choice questions, each of which has four response options. Students have approximately two hours to complete the entire test. Any student desiring additional information on the test is encouraged to contact the professor.

During the Fall 2003 semester, the test will be (tentatively) administered on MARCH 18th at 9:00 A.M. in Holloway Hall 114, and December 6th at 9:00 A.M. in Holloway Hall 114. Students may take the test as many times as they desire until they receive a passing grade. However, under no circumstances will a student be allowed to matriculate in Intermediate Accounting II until they have successfully completed the APAT. Failure to complete the APAT does not preclude a student from enrolling in either cost or tax accounting. These requirements apply to all native and transfer students. Anyone desiring additional information should call Professor Ken Smith at extension 85563.

The fee to sit for the APAT examination is $45 payable by check or money order made out to Salisbury University Foundation. You may register for the exam in HH 313 times to be announced shortly.

If you are interested in purchasing review materials for the APAT, McGraw-Hill has two Schaum's Outlines books that may be helpful: Financial Accounting (order code 057304-2) and Managerial Accounting (order code 057305-0). These may be ordered by telephone at 1-800-338-3987. This is not an admonishment to purchase these materials. Your basic financial accounting and managerial accounting texts have all of the material that is tested on the APAT. However, the Outline's books offer a condensed presentation of the material for those who want a quick refresher on the subject matter.

^a Course materials consist of 24 requirements presented over two semesters (11 in the first and 12 in the second).

^b Aguamaint, Inc. begins operations. The company attempts to secure an equipment loan, but the bank requires CPA reviewed financial statements.

^c Company operations grow, requiring equipment purchases and additional bank financing.

^d The company continues to mature and to generate significant cash flow. Idle cash balances are invested and the company adopts a retirement benefits plan to retain good employees.

Aguamaint Fiscal Year	Requirement Number(s)^a	Accounting and Reporting Issues
One^b	1, 2	Issuance of common stock
		Accounting for start-up costs
		Capitalization vs. expense treatment
		Revenue recognition including income deferral
		Accounting for net operating losses
		Earnings per share
		Introduction to note disclosure (policies, format, structure)

Two^c	8, 9	Accounting for bad debts
		Property depreciation (fractional and tax depreciation methods)
		Introduction to deferred taxes
		Notes payable (amortization schedules and expense accruals)
		New disclosures (comparative financial statements and taxes)
Three^d	10, 11	Capital lease accounting
		Investment securities accounting
		Pension accounting (defined benefit plans)
		Bookkeeping errors (missed accruals)
		New disclosures (leases, securities, and pensions)

Accounting and Reporting Issues