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AC221- Financial Accounting
Course Overview and
Introduction to
Financial Statements

Julie Zhu, AC221 Financial Accounting

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Agenda




Administrative matters
An overview of financial statements
Objectives and key concepts of financial
reporting

Julie Zhu, AC221 Financial Accounting

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Course Overview
Course objectives







Be comfortable looking through a financial
report
Be able to critically evaluate performance of
companies using financial statements.

Class format






Lecture + problem solving
Come to class prepared! Ask questions!

Workload:




Reading and homework assignments
Julie Zhu, AC221 Financial Accounting

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Administrative matters



Textbook: 7th edition of Libby, Libby, and Short
In class:

Please turn off your cell phones

Please refrain from using laptops

Please print out and bring class notes to
each classes

arrive on time and bring a name card

Julie Zhu, AC221 Financial Accounting

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Grading
%








Quiz
10%
Mid-Term Exam I
15% 
Mid-Term Exam II
15% 
Final Exam
40% 
Team Project +
20%
Class Participation + HW
TOTAL
100%*

Date
09/15
10/18
11/15
12/16-12/21

*Out of which 5% is automatically granted upon completion of ALEKS by 9/8

Julie Zhu, AC221 Financial Accounting

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Check Course page on SMGTools daily:
http://smgtools.bu.edu/

Steps:
1. Log in;
2. Select “Financial Acct SMG AC221 C1D1J1”;
3. Select “Resources”.

Julie Zhu, AC221 Financial Accounting

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Have Questions?
1. Ask in class!
2. How to contact me
 E-mail: juliezhu@bu.edu
 Office hours: SMG Rm. 548B
 Tue/Thur 4:00 – 5:00pm or by appointment.

3. Tutor: Mahfuja Malik & Jessica

Chang & Guanan Wang

 TA sessions: Rm. SMG 343 Mon/Wed/Thu
5:00 – 6:30 pm
Julie Zhu, AC221 Financial Accounting

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Why study accounting?

?
Julie Zhu, AC221 Financial Accounting

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What is accounting?
Accounting System

Financial Accounting System

Managerial Accounting System

Periodic financial statements and related
disclosures

Detailed and continuous performance
reports

External Decision Makers

Internal Decision Makers

Investors, creditors,
suppliers, customers, etc.

Managers throughout the
organization

Accounting is a system that analyzes, measures and records financial information about a firm and reports that information to decision makers. Julie Zhu, AC221 Financial Accounting

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Users, external decision makers


Institutional & private investors






Lenders or creditors




Pension funds, mutual funds or trust funds; they control the majority of publicly traded shares of US companies
Small retail investors, often buy shares through brokers

Suppliers, banks and other financial institutions that lend money to companies

Suppliers and customers




Customer evaluate the performance of suppliers to determine
whether they will provide reliable sources of supply.
Supplier evaluate customers to evaluate their future needs and ability to pay debt.

Financial Accounting produces information that
facilitates the exchange of resources.
Julie Zhu, AC221 Financial Accounting

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Where is accounting in these?


LinkedIn sees $3 billion value




Google’s $12.5 Billion Gamble




LinkedIn Corp... set terms for its initial public offering that value the company at more than $3 billion. The company...said Monday it plans to sell 7.84 million shares at an estimated price range of $32 to $35 apiece, raising as much as $274 million. The price range values the entire company between $3 billion and $3.3 billion.

Google, Inc., has made its largest purchase "by far" in acquiring Motorola Mobility Holdings, Inc. The acquisition broadens Google's operations to include "the cutthroat business of making
smartphones, tablet computers and cable set-top boxes"...
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