Tags
[BSc], BE, En
Admission requirements
- Classes of 2013-2016: similarly-tagged 100/200-level courses, or permission from the instructor.
Course description
Accounting is the lingua franca of the financial world and impacts all aspects of management and financial decision making. Professionals in all fields of sciences whether working in research, industry or non-profit organizations will be confronted with concepts of financial management. Financial management is divided into financial accounting, management accounting and corporate finance. This course contains financial accounting and management accounting. Advanced financial management contains corporate finance.
Financial accounting and management accounting are the pillars of business decision making. Financial accounting refers to information describing the resources, equity and liabilities, and activities of an economic entity. Financial accounting information is designed primarily to assist investors and creditors including banks. Investors and their advisers are concerned with the risk inherent in, and return provided by, their investments. They need information to help them determine whether they should buy, hold or sell the shares. Creditors and banks are interested in information that enables them to determine whether their loans, and the interest attached to them, will be paid when due. Management Accounting involves the development and interpretation of accounting information intended specifically to assist management in running the business. The concepts of management accounting are applicable to a big or a small business entity, a not-for-profit-organization or a sole proprietorship.
Financial accounting deals with the annual report. The three basic financial statements the balance sheet, the profit and loss account and the cash flow statement are discussed as well as themes as the measurement of assets and liabilities, and accounting conventions. Management accounting deals with budgeting and management information. The relationship between cost of production, volume of sales and profit is analyzed. Budgets are used to help exercise control over the business to try to ensure that its objectives are achieved.
Mode of instruction
Five weeks (1, 2, 3 ,4, 6) consist of lectures of two hours and assignments and cases of two hours. In these sessions the focus is on the basics of management and financial accounting. Students have to prepare accounting questions and cases which will be discussed during the sessions.
In week 4 and 7 the meetings consist of presentations of scientific papers and annual reports. There will be a test consisting of multiple-choice questions before the presentations.
Learning objectives
Understand the basic concepts of financial and management accounting;
Recognise specific financial and management accounting problems;
Understand, interpret and apply financial and management accounting cases and methods in real world situations;
Acquire accounting skills in drawing up a simple balance sheet, an income statement and a cash flow statement;
Able to perform and report a financial statement analysis;
Able to study relevant documents and research papers;
Demonstrate a critical and independent view when confronted with financial and managerial accounting issues, to reach his or her own conclusions, and present or report the findings.
Assessment
Multiple-choice texts, 30%, Weeks 4+7
Presentations, 30% Weeks 5+7
Written exam contains cases and questions, 40%, Week 8
Compulsory literature
McLaney E. and P. Atrill, Accounting an Introduction, 6/e Prentice hall
Contact information
t.l.m.Verdoes@law.leidenuniv.nl