Overview

The course is structured around the following major uses of accounting data by managers, financial analysts, consultants, and other professionals as described below:

Important Stern Policy Document

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Behavior expected from you in the classroom

We expect you to behave as adults attending a professional meeting.

The difference between the Finance and Non-Finance versions of the accounting course

Based on requests from students over the years, Stern has split the accounting core course into two sets of sections: two sections for students taking Foundations of Finance in fall and two sections for students who will take Finance in spring. The only difference between the finance and non-finance sections is that the non-finance sections are smaller and they cover the concepts of Time Value of Money at a slower pace. Otherwise, the content, pace, and exams will be identical for the two sections, and they will be graded on a common curve.

Grading

Help

Materials

Practice

Midterm

Final

Schedule

Date Topic
Sept 9, W
  • Accounting terms, transactions, and systems
Sept 8, M
  • Performance measures: Cash flows vs. income flows; design of incentive systems
Sept 10, W
  • Relationships between the three financial statements
Sept 15, M
  • Salient ratios related to each statement: margins, asset and liability turnover, cash flow generation
Sept 17, W
  • When revenues lead receipts: Accrued revenues or receivables --Transactions, ratios, and projections
Sept 22, M
  • When revenues lags receipts: Deferred revenues or advances -- Transactions, ratios, and projections
Sept 24, W
  • When expenses lead payments: Accrued expenses or payables -- Transactions, ratios, and projections
Sept 29, M
  • When expenses lag payments: Deferred expenses or prepayments -- Transactions, ratios, and projections
Oct 1, W
  • No class
Oct 6, M
  • Examples: Inventories and Payables -- Transactions, ratios, and projections; cost flow assumptions -- LIFO vs. FIFO
Oct 8, W
  • Examples: Property, plant, and Equipment -- Transactions, ratios, and projections; investing vs. operating activities
Oct 13, M
  • When receipts and payments are not revenues and expenses: Debt financing
Oct 15, W
  • The 10:30 AM class will be held in KMC 3-55.
  • When receipts and payments are not revenues and expenses: Equity financing:
Oct 20, M
  • An integrative framework for analysis: The DuPont model and the value drivers
Oct 22, W
  • No class; midterm on the Sunday
Oct 26, SUNDAY Midterm: 1-4 PM.
Oct 27, M
  • How growth affects financial statements and ratios; The “canceling differences”theorem
Oct 29, W
  • Handling uncertainty: Allowances and reserves as liabilities
Nov 3, M
  • Handling uncertainty: Allowances and reserves as contra-assets
Nov 5, W
  • When managers manipulate statements; A different perspective on understanding the links between the three major statements
Nov 10, M
  • When cash flows stretch over time
  • Non-finance section: Time value of money
  • Finance section: Accounting for bonds and long-term liabilities
Nov 12, W
  • Non-finance section: Mortgages and bonds
  • Finance section: Leases
Nov 17, M
  • Non-finance section: Accounting for interest
  • Finance section: Deferred taxes
Nov 19, W
  • Non-finance section: An introduction to equities
  • Finance section: Deferred taxes
Nov 24, M
  • Non-finance section: Dividends and buybacks
  • Finance section: Investments in debt; trading, held-for-sale, and held-to-maturity securities; controversies with fair value accounting
Nov 26, W
  • No class; Thanksgiving
Dec 1, W
  • Non-finance section: Mergers and acquisitions
  • Finance section: Investments in equities; equity method and strategic interactions; Mergers and acquisitions -- Goodwill
Dec 3, M
  • Another look at cash flows and interrelations between financial statements (both sections)
Dec 8, W
  • Another look at an integrative framework for analysis (both sections)
Dec 15, M
  • Final: 9 AM to Noon. 2-60, 1-70, 2-65 and 2-70