FIN3040 Financial Statements

Advanced · 1 credit · BIT - Business, Admin, Finance and IT

Description: Students examine the content and structure of financial statements and prepare customized financial statements for a variety of businesses.
Prerequisite: FIN2030: Retail Accounting 2
Parameters: Access to an appropriate computer work station, the Internet and appropriate software.
Supporting courses: FIN3030: Capital Accounting

Outcomes The student will:

1 examine the purposes of financial statements; e.g., the balance sheet, the income statement
- 1.1 explain how a balance sheet reflects the financial position of a business on a specific date
- 1.2 explain how the income statement reflects the financial operations of a business for a specific period of time
- 1.3 outline and describe the reasons for the accepted formats
- 1.4 describe the purpose of notes to the financial statements
- 1.5 explain the difference between financial statements prepared from audited records and financial statements that have been reviewed by an auditor including:
  - 1.5.1 owner’s equity
- 1.6 identify specific items within each component; e.g., current assets such as petty cash, accounts receivables, allowance for doubtful accounts, inventory
- 1.7 identify specific items within each component; e.g., cost of merchandise sold such as opening inventory, purchases, purchase returns and allowances, purchase discounts
2 adapt the financial statements to various types of businesses
- 2.1 compare various accounts required by different types of businesses; e.g., service, retail, agriculture, manufacturing, construction, processing
- 2.2 prepare financial statements for comparison including:
  - 2.2.1 prepare simple multi-year comparative income statements and balance sheets
  - 2.2.2 prepare common-size income statements and balance sheets
  - 2.2.3 use comparative ratios to analyze changes in financial position including document changes in a financial analysis report
3 demonstrate basic competencies
- 3.1 demonstrate fundamental skills to:
  - 3.1.1 communicate
  - 3.1.2 manage information
  - 3.1.3 use numbers
  - 3.1.4 think and solve problems
- 3.2 demonstrate personal management skills to:
  - 3.2.1 demonstrate positive attitudes and behaviours
  - 3.2.2 be responsible
  - 3.2.3 be adaptable
  - 3.2.4 learn continuously
  - 3.2.5 work safely
- 3.3 demonstrate teamwork skills to:
  - 3.3.1 work with others
  - 3.3.2 participate in projects and tasks
4 create a transitional strategy to accommodate personal changes and build personal values
- 4.1 identify short-term and long-term goals
- 4.2 identify steps to achieve goals