Financial and Management Accounting (FAMA) Semester 3 2024-2025 PDF

Financial and Management Accounting (FAMA) Semester 3 Aug 2024- Dec 2024  Financial and Management Accounting Course Code Financial and Management Accounting The course is designed to develop students’ b...

Financial and Management Accounting (FAMA) Semester 3 Aug 2024- Dec 2024  Financial and Management Accounting Course Code Financial and Management Accounting The course is designed to develop students’ basic knowledge and understanding of financial accounting and management accounting. The first part is focused on the fundamentals of financial accounting while the second part introduces various concepts in management or cost accounting. Course In financial accounting the course will cover the basics of accounting concepts, accounting equation Description and entries and explains how financial statements are used for analysis. The section on management accounting will focus on different types of costs, formulation of budgets, cost variance analysis and breakeven analysis. The course will explain how management accounting is used for key decision making in an organization.  Financial and Management Accounting Accounting Concepts Decision Making with Financial Management Statements Accounting FAMA Breakeven Accounting Analysis Mechanics Budgets/ Financial Variance Statements Analysis Analysis  Financial and Management Accounting Course Outcome: On successful completion of the course, the students will be able to CO1 Explain the basic accounting concepts and their use in accounting. Explain the basic financial statements: Balance Sheet, Profit CO2 and Loss and Cash Flows and the mechanics of accounting CO3 Interpret financial statements for decision making Explain the formation of the corporate budget and variance CO4 analysis. CO5 Explain the application of breakeven analysis CO6 Apply management accounting for decision making Pedagogy for the course: Lecture, Case Studies, Article Review, Class Discussions  Financial and Management Session Plan: Financial and Management Accounting Accounting Structure : 2:1:0 Tutorial Sessions (One Lecture Sessions (One hour) Theory Topic LO Hour) Tutorial Topic LO Course Introduction/ Basic Accounting Session 1,2 Concepts CO1 - Session 3,4 Accounting Standards, Accounting Principles CO1 Session 17 Article Review - T1 CO1 Session 5,6 Balance Sheet / Profit and loss Statements CO2 Session 18 Article Review - T2 CO1 Session 7,8 Fixed Assets, Depreciation, Inventory, etc CO2 Session 19 Article Review - T3 CO2 Session 9,10 Cash Flow Statement CO2 Session 20 Article Review -T4 CO2 Session 11 Cash Flow Statement CO2 Session 21 Article -T5 CO2 Session 12,13 Accounting Equation and Mechanics CO2 Session 14 Accounting Equation and Mechanics CO2 Quiz 1 CO1/CO2 Session 15 Accounting Equation and Mechanics CO2 Session 16 Accounting Equation and Mechanics CO2 Session 22,23, 24 Financial Statement Analysis CO3 Session 25,26 Financial Statement Analysis CO3 Session 27 Article/Case -T6 CO3 Master Budget/Flexible Budget/Variance Session 29,30 Analysis CO4 Session 28 Article/Case –T7 CO3 Master Budget/Flexible Budget/Variance Session 31,32 Analysis CO4 Session 38 Article/Case –T8 CO4 Quiz 2 CO3 Session 33,34 CVP/Breakeven Analysis CO5 Session 39 Article/Case -T9 CO5 Session 35, 36 CVP/Breakeven Analysis CO5 Session 40 Article/Case -T10. CO6 Decision Making with Management Session 37 Accounting CO6 Session 41 Article/Case -T11. CO6 Session 42 Article/Case -T12 CO6 Session 43 Article/Case -T13. CO6 Session 44 Article/Case-T14 CO6 Session 45 Quiz 3 CO6 CO4/CO5/ CO6  Financial and Management Accounting Assessment End Term Quiz 1 Quiz 2 Quiz 3 Assignment Exam 15% 10% 20% Group 40% Closed book Closed book Closed book Assignments To assess the with MCQs. with MCQs. with MCQs. 15% students understanding of Outcome Outcome Outcome the concepts Tested: Tested: CO3 Tested: covered. CO1/CO2 CO4/CO5/CO6 Outcomes tested: CO1 to CO6 The exam will be of 2-3 hours duration, and will consist of short scenario based questions. Grading As per the Academic Regulations Criteria Lecture notes (Google Classroom) Resources/ Text: 1. Financial Accounting for Management by N Ramachandra & Ram Kumar Kakani – Tata McGraw- Hill Text Book 2. Accounting by Robert N. Anthony, David F. Hawkins, Kenneth A. Merchant 3. Cost Accounting – A Managerial Emphasis by Horngren, Datar and Foster  Financial and Management Accounting Course Tutorial Assignment Students will be formed into 11/12 Groups (each with 2 students) Each assignment will be given to a Group before the tutorial class. Each Group has to present the assignment in the class plus submit a written copy Marks for Assignment: 10 marks Class Participation: 5 marks Assignment The marks will be given based on the rubrics in the next slide.  Financial and Management Accounting Rubric for Assignment Criteria/Evaluation Excellent (10) Good (7) Average (5) Needs Improvement (2) Accuracy and The responses to the The responses to the The responses to the Major inaccuracies exist in Clarity (70%) questions represents the questions represents questions represents the responses submitted article ideas and evidence the article ideas and the article ideas and and does not distinguish accurately. evidence. evidence insufficiently. between the major ideas The answers have also The conclusions have Minor inaccuracies exist given in the article. been based on external been arrived with no in the solutions evidence from the additional external submitted. research conducted. research conducted. Report The response is correctly The response is The response is The response is poorly Presentation(30%) formatted with proper correctly formatted correctly formatted formatted with fonts and normal margins. with proper fonts and with proper fonts and inconsistent fonts and The assignment is written normal margins. normal margins. margins. in consistent style with no The assignment is The assignment is There are several spelling spelling or grammatical written in consistent written in consistent or grammatical errors and errors. Quotations are all style but with few style but with several the quotations are also properly attributed and spelling or spelling or grammatical incorrectly attributed and cited accurately. grammatical errors. errors. cited. Quotations are all Quotations are also properly attributed incorrectly attributed and cited accurately. and citations are inconsistent. Financial and Management Accounting A few points…. Please keep your phone in silent mode else… All presentations in the class will be shared and saved on the CollPol platform before the next session. Financial and Management Accounting Introduction Introduction: Function of Accounting Planning & Control Decision Making Information Flow Comparison and Forecasting Evaluation Measure Interpret Communication Introduction: Types of Accounting Accounting Financial Management Accounting Accounting Used for Reporting Providing Information for Planning and Control Audience: Outside World Audience: Internal (Government bodies, (Managers and Company Societies, Investors etc) Board) Accountant as a Historian Accountant can be perceived as a historian – who keeps records As historian the accountant has the duty to: Respect the facts To ensure the facts reported are accurate Bring into focus, all known and knowable relevant facts Finally, provide an interpretation of the data/facts Financial Accounting – Evolution Product of economic environment and the formation of organizations created to run various businesses Gradually evolved as a profession with the development of economic activity..Industrial Revolution Scope and nature of accounting is closely associated with the gradual changes in the field of organization and management of organizations In the modern IT era, accounting is integrated into software packages and constantly adapting itself (SAP, Oracle, Tally etc) Digital Business has brought about further changes in the nature of transactions and their recordings in accounting. Financial Accounting What is an Organization An organization is a structure manned by a group of individuals who are working together towards a common goal or objective. Types: Profit Examples Not for Profit Examples Helpage India, Teach for India Trust Example Tata trust Society/Association Example Apartments Society or Association Cooperative Society In India, a cooperative society can be formed under provisions of the Co-operative Societies Act, 1912. The provisions state that at least 10 people above 18 years, having the capacity to enter into a contract with common economic objectives, such as farming and weaving among others, can form a cooperative society. Example Government Entities/Departments Financial Accounting Forms of a Business Organization (with profit as objective): Sole Proprietorship Partnership Limited liability partnership Limited liability company Private Company Example Amazon Pvt Ltd Public Limited Company Example TCS Public Sector Example ONGC, HP Financial Accounting Characteristics of Business Organizations in India-Discussed in EBM Number of Accounting Management Type Owner: Liability: Owners: Entity: Control: Sole Founder One Only Separate Proprietor Unlimited Proprietor Min 2 and Partnership Partners Separate Partners Unlimited max 20 Limited Min 2 max no Designated Liability Partners Separate Limited limit Partners Partnership Limited Minimum =7 and Liability maximum no limit Board of company (Pvt/ Shareholders …For Private limited Separate Limited min 2 and max 50 Directors Public) Financial Accounting Characteristics of Business Organizations in India (Contd.) Legal Source of Equity Financial Type Winding up: registration: Funds: Statements Required with Prepared for Proprietor Brings Less legal Sole Proprietor owner and tax tax authorities in the funds procedure authorities Partner(s) Prepared for Required with Less legal Partnership bring(s) in the partners and tax tax authorities procedure funds authorities Submitted to Limited Liability Required by Partner(s) bring Less legal ROC, partners, Partnership ROC in the funds procedure tax authorities Limited Liability Yes, in the form of Required by Shareholders With full legal annual reports in the company (Pvt or Newspapers for public ROC bring in the funds compliance Public) limited companies Financial Accounting Financial Statements are created to answer three basic questions: How much profit was generated by the business over a particular period? What are the assets and liabilities of the business at the end of a particular period? What were the sources and uses of cash over a particular period? ▪ Financial Statements Profit & Loss Statement Balance Sheet Cash Flow Statement