Contents of the subject

1.    Accounting Information and Financial Reporting
•    Users of accounting information
•    Objectives of financial accounting and financial reporting
•    International and national GAAP
•    Bookkeeping and accounting, accounting cycle

2.    Double entry bookkeeping
•    Accounting equation; double entry system for assets, liabilities and capital
•    Stock-taking, inventory    
•    Double entry system for expenses and revenues
•    Balancing-off accounts, trial balance, financial statements
•    VAT

3.    Separate financial statements of merchandising companies
•    Impact of trading on income statement and capital accounts
•    Valuation of inventory

4.    Adjustments for financial statements (year-end closing)
•    Bad debts and allowance for doubtful debts
•    Depreciation of non-current assets
•    Accruals, prepayments and provisions

Qualification aims of the subject

The course provides an overview of the tasks, principles and legal basis of double-entry bookkeeping. Students learn how to record basic accounting transactions and how to prepare the main financial reports, such as Income Statement and Balance Sheet. They learn to prepare the separate financial statements of merchandising companies. Furthermore, students become familiar with year-end closing entries (depreciation, accruals and deferrals, provisions, bad debts).

After successful completion of this module, students will have acquired the following competencies:

ILO 1: Students demonstrate an understanding of the foundational principles and objectives of accounting.

ILO 2: They apply the accounting equation to illustrate the impact of business transactions. They identify specific debits and credits, t-accounts, record basic transactions and derive a trial balance. Students explain and execute the closing process for a specified accounting cycle. They demonstrate an understanding of VAT topic and enter up VAT in all necessary accounts.

ILO 3: Students identify, analyze and record transactions of a merchandising company.

ILO 4: Students explain and execute entries for allowances for bad debts and depreciate property, plant and equipment. They demonstrate an understanding of why accruals and provisions are necessary and execute related entries.

Applicability of the subject

Prerequisite in particular for specialisation in Accounting. The module is available for students of the following programs: Business Administration, Economics, IBAEX, Wirtschaftsrecht, Wirtschaftsinformatik, Gründung und Nachfolge, Deutsch-Französischer Studiengang.

The nature of the examination / requirements for the award of credit points

The assessment is an exam (90 minutes). This exam consists of several questions, which test different areas of knowledge and competencies:

- Knowledge questions require students to describe definitions, concepts or facts (ILO 1, ILO 2).

The lecturers of the module can carry out assignments in the form of a short written examination within the course of the semester. In this case  a successful completion of this assignment is a pre-requisite for registration for an examination.
- Questions containing calculations and booking entries for specified transactions. The ability to categorize and understand given transactions and apply appropriate booking entries to record them is tested (ILO 2, ILO 3, ILO 4).

- Questions that require students to interpret or compare facts, statements or previously found solutions. Such questions test the ability to analyze concepts and methods (recognition and measurement requirements) regarding their impact on the performance presentation of the entity in the financial statements (ILO 4).

Literature and learning resources

Core text

Frank Wood and Alan Sangster: Business Accounting 1, Prentice Hall/Pearson Education, newest edition    

Additional resources

Reimers, J.G.: Financial Accounting, New Jersey, newest edition; Libby/Libby/Short: Financial Accounting, New York, newest edition; Slater, J.: College Accounting, New York, newest edition

Teaching and learning forms

Seminar

Participation requirements

none