Comprehensive Introduction to Financial Accounting and Course Policies

For-Profit vs. Governmental Entities: A company focuses on profit by maximizing revenue (making money). In contrast, an entity like the City of Denton does not generate revenue primarily through business sales but through taxes. This is referred to as governmental activity.
Manufacturing and Factory Perspective: Machines and factories involve different financial planning. They must account for production units and shipping volume. A critical financial consideration is whether an item is worth making: for example, if an item sells for $50.00$ but costs $70.00$ to produce, it is not financially viable.
Financial Accounting Focus: The primary focus of this course is managing financial data for for-profit entities (such as Microsoft) to determine profit, manage team costs (salaries/expenses), and understand the million facets of assets.

Primary Financial Statements: * Income Statement: Determines profit or loss. It tracks how much a company made. * Balance Sheet: Determines net worth or how much a company is worth by subtracting what you owe from what you have.
Stakeholders of Financial Information: * Investors: Look for profitability and potential for dividends or stock price appreciation. * The Media: Monitors metrics like net income, CEO compensation, and taxes paid. * Debt Holders (Banks): Lenders, such as a bank lending to Walmart, care about the company's financial health to ensure the loan can be repaid.

Nomenclature: First name is Pradeep (mnemonic: probability, frog, deep); last name is Sapkota (mnemonic: North/South Dakota).
Academic Rank: Assistant Professor; recently received tenure and will become an Associate Professor in the fall.
Education: * PhD in Accounting from Louisiana State University (LSU). * Master’s in Accounting and Graduate Certificate in Tax from University of Arkansas at Little Rock. * Undergraduate double major in Accounting and Finance from Southern Arkansas University.
Professional Certification: Certified Public Accountant (CPA). Currently inactive as of last December; the instructor decided to go inactive after getting tired of paying the annual $100.00$ renewal fee.
Industry Experience: * Two years in public accounting (primarily tax) in Dallas. * Five years as a Controller after completing a Master’s degree.

Success Rate: This is considered a difficult course. On average, approximately one-third ( $33\%$ ) of students fail or drop out. Business majors require at least a "C" grade to move forward.
Coordinated Nature: The course is coordinated across roughly 15 sections. Because of this, the instructor has limited control over certain structures, such as quiz opening windows (typically only one day).
Assignments: Consist of three assignments per chapter (Dynamic Study Modules, Homework, and Quizzes) managed through Pearson MyLab.
Extenuating Circumstances: Extensions may be granted if requested before a deadline, regardless of the reason. No extensions are granted once the deadline has passed.
Exam Breakdown: * Four midterm exams are administered; the lowest score is dropped. * The final exam is comprehensive and constitutes $22\%$ of the total course grade.

Attendance Policy: Students must meet a minimum attendance requirement. If a student scores less than $70\%$ on an exam, they are mandatory attendees for Supplemental Instruction (SI) sessions. Failure to attend results in a $2.5$ point deduction from attendance points.
Support Resources: * Supplemental Instruction (SI): Three hours of sessions per week led by a student leader who has previously passed the course. * Accounting Lab: Available in-person and via Zoom. * Direct Support: The instructor, graders, and doctoral students.
Communication: All communication after the first week occurs through Canvas. Email responses are typically provided within 24 hours.

Asset Accounts and Definitions: * Cash: Physical currency and equivalents. * Accounts Receivable: Money owed to the company by customers for services already performed (e.g., tutoring performed but paid next month). * Inventory: Products held for sale (e.g., cereal on a Walmart shelf). * Prepaid Expense: Payments made in advance for future benefits (e.g., a $25.00$ prepaid phone card or insurance). * Property and Equipment: Long-term assets like vehicles and buildings.
Liability Accounts: * Accounts Payable: Short-term money owed to creditors (e.g., a utility bill from the City of Denton).
Stockholders' Equity: The owner's claims to the assets of the business. Includes Common Stock and Retained Earnings (profit kept in the company rather than paid as dividends).
The Accounting Equation: * $Assets = Liabilities + Stockholders' Equity$ * Rearranged for Net Worth: $Assets - Liabilities = Stockholders' Equity$
Historical Cost Principle: Assets must be recorded at their actual cost on the date of purchase. For example, if a car is purchased for $35,000.00$ and its market value drops to $20,000.00$ the next year, it remains in the books at the historical cost of $35,000.00$ .

Raising Capital: To start a business (e.g., a car dealership needing $5.00$ ), capital is raised through Debt (loans/liabilities) or Equity (selling ownership/common stock).
Common Stock vs. Preferred Stock: Common stock is the standard form of ownership traded publicly. Preferred stock often carries different weights in voting or dividend priority.
Investor Returns: Investors earn money through: * Dividends: A share of the company's profit paid to shareholders. * Capital Appreciation: Selling a stock for a higher price than the purchase price (e.g., buying at $118.41$ and selling for more later).
Market Examples: Walmart (WMT), Tesla (TSLA), Lucid, and Berkshire Hathaway (managed by Warren Buffett).

Device Policy: Laptops and cell phones are prohibited unless used for taking notes. Note-taking requires signing a specific policy agreement and instructor verification. Students working on other classes must sit in the back row to avoid distracting others.
Quizzes: Administered via Lockdown Browser and Monitor (webcam and microphone required). They are open-note but must be completed individually without help from other people or devices.
PowerPoints: The instructor provides printed PowerPoints in class. Important exam content is explicitly highlighted with yellow backgrounds during lectures.

Student Question: Are investments considered accounts receivable?
Response: No. Accounts receivable represent money owed by a specific person for a service. Investments (like an S&P 500 index fund) are separate asset accounts that the owner can choose to buy or sell.
Student Question: If you get above a $90$ on all four midterms, can you drop the final?
Response: No. The final exam is mandatory and worth $22\%$ of the grade. Only one of the four midterms can be dropped.
Student Question: Does the instructor allow the use of laptops?
Response: Only for note-taking if the registration sheet is signed. Laptops and IPs are tracked for quizzes to prevent academic dishonesty.