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Cheques and balances. It all adds up.

Work towards your CPA designation!

ACC 925 - Introductory Financial Accounting C01

Academic Credit Value:
3 units
Course Delivery Mode:
Hours of Study:
42 hours
Course Prerequisite(s):
Recommended: ACC 830 Basic Bookkeeping or equivalent
Course Anti-requisite(s):
Instructor Name:
Len Hostin, CPA, CA, CIA, CRMA
Course Dates:
01/17/2019 - 04/18/2019

Required Course Materials:
Understanding Financial Accounting, Canadian Edition, by Christopher D.Burnley. Homework problem solutions can be obtained via the course online website at
Optional Course Materials:
CPA Handbook, most recent edition
Course Description:
This course explores the basic principles and techniques underlying the financial statements typically issued to the general public.  Generally accepted accounting principles, the accounting transaction cycle, financial statements and the specific items, which make up the balance sheet are examined.

Introductory Financial Accounting (Course ACC 925) is a McMaster University diploma course.  The course content, its objectives and evaluation structure meet the requirements and standards set by McMaster University’s Undergraduate Council and Senate.  It is important to note that this course may draw upon examples, practice problems, sample test questions, information and/or other general material from a variety of sources including affiliated professional associations and institutes.
Learning Outcomes:
Since ACC 925 is an introductory course, it is expected that you will begin to appreciate the decision-making and conceptual issues that will be introduced.  Your understanding of these issues will develop as you pursue your study and career in accounting. The homework is the minimum amount suggested to enhance your understanding of the course.  You should attempt more problems if you are experiencing difficulties. It is expected that you have read the material and attempted the homework assignment before class.   

The broad aims of the course are to provide you with a sound introduction to the:
•general concepts of financial accounting
•procedures used in the preparation of financial statements, and the
•use of accounting information in financial decision making

Financial accounting is the scorekeeping system of a business.  It is a system of accumulating data on past business activities and events and reporting them to decision making parties (primarily external to the organization) upon which they make their decisions; therefore, the accountant has a very important role and responsibility in the operations of a business.
Course Evaluation
The final grade is calculated based on the following components:
Test #1 25%
Test #2 25%
Final Exam 50%
Course Format:
This course is designed to present the fundamental concepts and theories in Introductory Financial Accounting and promote the application to the workplace and professional practice. Course activities will include instructor presentations, required readings and experiential learning activities (i.e. case studies, group discussions, projects, etc.).
Assignment Submission:
Late Coursework:
Late assignments will be subject to a 2% per day late penalty (includes weekends and holidays) for up to seven (7) days. After this date, no assignments will be accepted and a grade of zero (0) will be applied. Extensions for course work must be approved by the instructor before the due date (see Academic Regulations below), and will be granted for illness or emergencies only. Students may be asked to submit supporting documentation for an extension request.  

Policy & Procedures:

Academic Regulations (Attendance, Coursework, Tests/Exams):
In accordance to McMaster University’s General Academic Regulations, “it is imperative that students make every effort to meet the originally scheduled course requirements and it is a student’s responsibility to write examinations as scheduled.” Therefore, all students are expected to attend and complete the specific course requirements (i.e. attendance, assignments, and tests/exams) listed in the course outline on or by the date specified. Students who need to arrange for coursework accommodation, as a result of medical, personal or family reasons, must contact the course instructor within 48 hours of the originally scheduled due date. It is the student’s responsibility to contact the Program Manager to discuss accommodations and procedures related to deferred tests and/or examinations within 48 hours of the originally scheduled test/exam, as per policy. Failure to contact the course instructor, in the case of missed coursework, or the Program Manager, in the case of a missed test/examination, within the specified 48-hour window will result in a grade of zero (0) on the coursework/exam and no further consideration will be granted.

*Note: Supporting documentation will be required but will not ensure approval of accommodation(s).

Academic Integrity
You are expected to exhibit honesty and use ethical behaviour in all aspects of the learning process. Academic credentials you earn are rooted in principles of honesty and academic integrity. Academic dishonesty is to knowingly act or fail to act in a way that results or could result in unearned academic credit or advantage. This behaviour can result in serious consequences, e.g. the grade of zero on an assignment, loss of credit with a notation on the transcript (notation reads: “Grade of F assigned for academic dishonesty”), and/or suspension or expulsion from the university.

It is your responsibility to understand what constitutes academic dishonesty. For information on the various types of academic dishonesty please refer to the Academic Integrity Policy, located at

The following illustrates only three forms of academic dishonesty:

  1. Plagiarism, e.g. the submission of work that is not one’s own or for which other credit has been obtained.
  2. Improper collaboration in-group work.
  3. Copying or using unauthorized aids in tests and examinations.
Academic Accommodations:
Students with disabilities who require academic accommodations must contact the Student Accessibility Centre (SAS) to meet with an appropriate Disability Services Coordinator. To contact SAS, phone 905-525-9140 ext. 28652, or email For further information, consult McMaster University’s Policy for Academic Accommodation for Students with Disabilities.
On-line Elements:
In this course, we will be using on-line elements, which may include email, Avenue to Learn, WebEX, and external web sites.  Students should be aware that, when they access the electronic components of this course, private information such as first and last names, user names for the McMaster e-mail accounts, and program affiliation may become apparent to all other students in the same course. The available information is dependent on the technology used. Continuation in this course will be deemed consent to this disclosure. If you have any questions or concerns about such disclosure please discuss this with the course instructor.

Accessing the CPA Handbook (available through the McMaster University Library System):

To access the CPA Handbook, please follow these steps:

  • Go to
  • Click on the URL for McMaster Users Only
  • Log in using your MacID and password
  • Under subscriptions find the CPA Standards and Guidance Collection and click to access this resource ​
Course Changes:
The instructor reserves the right to modify elements of the course and will notify students accordingly.
Course Withdrawal Policy:
Policies related to dropping a course and course withdrawals are posted to the Centre for Continuing Education’s program webpage, FAQs & Policies (
Storm Closure Policy:

In the event of inclement weather, the Centre for Continuing Education will abide by the University’s Storm Closure Policy:, and will only close if the University is closed.  All in-class courses, exams and room bookings by internal and external clients will be cancelled if the Centre for Continuing Education is closed.  On-line courses will take place as scheduled.

Grading Scale:
 Grade Equivalent
Grade Point
Equivalent Percentages
A+ 12 90-100
A 11 85-89
A- 10 80-84
B+ 9 77-79
B 8 73-76
B- 7 70-72
C+ 6 67-69
C 5 63-66
C- 4 60-62
D+ 3 57-59
D 2 53-56
D- 1 50-52
F 0 0-49
Course Schedule:
Chapter 1 Overview of Corporate Financial Reporting

Learning Outcomes:

  • define financial accounting and understand its relationship to economic decision-making
  • identify the main users of financial accounting information and explain how they use this   information
  • describe the major forms of business organization and explain the key distinctions between them
  • explain the three categories of business activities and identify examples of transactions related to each category
  • identify and explain the content and reporting objectives of the four basic financial statements and the notes to the financial statements

Chapter 2 Analyzing Transactions and Their Effects on Financial Statements

Learning Outcomes:

  • identify the accounting standards used by Canadian companies
  • identify and explain the qualitative characteristics of useful financial information and how the cost constraint affects these
  • explain the difference between the cash basis of accounting and the accrual basis of accounting
  • analyze basic transactions and record their effects on the accounting equation
  • explain the limitations of using the accounting equation template approach to record transactions
  • summarize the effects of transactions on the accounting equation and prepare and interpret a simple set of financial statements

Chapter 3 Double-Entry Accounting and the Accounting Cycle

Learning Outcomes:

  • explain how the double-entry accounting system works, including how it overcomes the limitations of the template approach
  • explain the normal balance concept and how it is used within the double-entry accounting system
  • identify and explain the steps in the accounting cycle
  • explain the significance of a company’s decisions regarding its chart of accounts and the implications of subsequent changes
  • explain the difference between permanent and temporary accounts
  • identify and record transactions in the general journal and general ledger
  • explain why adjusting entries are necessary and prepare them
  • explain why closing entries are necessary and prepare them

Chapter 4 Revenue Recognition and the Statement of Income

Learning Outcomes:

  • explain the nature of revenue and why revenue is of significance to users
  • identify and explain the general criteria for revenue recognition and the specific revenue recognition
  • criteria related to the sale of goods, the provision of services, and the receipt of interest, royalties, and dividends
  • explain how revenues are measured
  • understand the difference between a single-step statement of income and a multi-step statement of income
  • understand the difference between comprehensive income and net income
  • understand the difference between presenting expenses by function or by nature of the item on the statement of income
  • calculate and interpret a company’s basic earnings per share

Chapter 6 Cash and Accounts Receivable 

Learning Outcomes:

  • explain why cash and accounts receivable are of significance to users
  • describe the valuation methods for cash
  • explain the main principles of internal control
  • explain the purpose of bank reconciliations, including their preparation and the treatment of related adjustments
  • explain why companies sell on account and identify the additional costs that result from this decision
  • describe the valuation methods for accounts receivable
  • explain the allowance method of accounting for bad debts
  • identify the two methods of estimating bad debts under the allowance method and describe the circumstances for using each method
  • explain the direct write-off method of accounting for bad debts and when it is acceptable to use it
  • explain alternative ways in which companies shorten their cash-to-cash cycle
  • explain the concept of liquidity, and calculate the current ratio, quick ratio, accounts receivable turnover ratio, and average collection period ratio and assess the results

Chapter 7 Inventory (include appendix at the end of the chapter)

Learning Outcomes:

  • discuss the importance of inventory to a company’s overall success
  • distinguish between the different inventory classifications and determine which goods should be included in a company’s inventory
  • explain the difference between perpetual inventory systems and periodic inventory systems
  • explain why cost formulas are necessary and calculate the cost of goods sold and ending inventory under the specific identification, weighted-average, and FIFO cost formulas
  • explain the value at which inventory is carried on the statement of financial position
  • explain how a company’s gross margin is determined and why it is an important measure
  • describe management’s responsibility for internal control measures related to inventory
  • calculate the inventory turnover ratio and the days to sell inventory and explain how they can be interpreted by user

Chapter 8 Long-Term Assets

Learning Outcomes:

  • identify and distinguish between the various types of long-term assets
  • describe the valuation methods for property, plant, and equipment, including the identification of costs that are usually capitalized
  • explain why property, plant, and equipment assets are depreciated
  • identify the factors that influence the choice of depreciation method and implement the most common methods of depreciation
  • describe and implement changes in depreciation estimates and methods
  • explain what it means if property, plant, and equipment assets are impaired
  • account for the disposal of property, plant, and equipment
  • explain the effect of depreciation on income taxes

Chapter 9 Current Liabilities 

Learning Outcomes:

  • explain why current liabilities are of significance to users
  • describe the valuation methods for current liabilities
  • identify the current liabilities that arise from transactions with lenders, suppliers, customers and employees, and explain how they are accounted for

Chapter 10 Long-Term Liabilities

Learning Outcomes:

  • explain why long-term liabilities are of significance to users
  • identify the long-term liabilities that arise from transactions with lenders, other creditors, and employees and explain how they are accounted for
  • identify the long-term liabilities that arise from differences between accounting standards and income tax regulations or law
  • explain what commitments and guarantees are and how they are treated
  • explain contingencies and how they are accounted for
  • calculate leverage and coverage ratios and use the information from these ratios to assess a company’s financial health

Chapter 11 Shareholders’ Equity (to end of stock splits)

Learning Outcomes:

  • explain why the shareholders’ equity section is significant to users
  • explain the components of the shareholders’ equity section of the statement of financial position
  • describe the different types of dividends, explain why one type of dividend may be used rather than another, and describe how dividends are recorded
  • describe what a stock split is and explain how it is accounted for