A86012 Management and Principles of Accounting

In the first part of the course students will have an understanding of:

• the various forms, practical and legal, of business enterprises;
• the role of Accounting as the language of business and a tool to mesure business performance;
• common functions of every business
• administration of a business
• employee evaluation and incentives
• multiple constituencies with which a business interfaces;
• roles of outside advisors, including accountants, lawyers, and bankers;
• capital markets
• critical aspects of international business
• formulation, evolution and application of "The Business Plan"

In the second part of the course the student will be able to apply:

• basic accounting principles as a language to evaluate a company
• double-entry method of bookkeeping through a series of practical exercises
• basic principles to prepare a financial statement (balance sheet, profit & loss account).

In the first part of the course students will have an understanding of:

• various forms, practical and legal, of business enterprises;
• role of Accounting as the language of business and a tool to measure business performance;
• common funtions of every business
• administration of a business
• employee evaluation and incentives;
• multiple constituencies with which a business interfaces;
• roles of outside advisors, including accountants, lawyers, and bankers;
• capital markets;
• critical aspects of international business
• formulation, evolution and application of "The Business Plan"

In the second part of the course the student will be able to apply:

• basic accounting principles as a language to evaluate a company
• double-entry method of bookkeeping through a series of practical exercises
• basic principles to prepare a financial statement (balance sheet, profit & loss account).

During the first part of the course, each of the fundamental functions and challenges of business enterprises will be discussed. Real life examples of enterprises from sole proprietorships to multi-national corporations will be described and animated with anecdotes from the teacher’s experiences and contemporary reports.

The course initiates with the various forms, legal and descriptive, of business enterprises. There follows a discussion of Accounting, the essential language of business administration, performance measurement and capital allocation decisions. There follows examinations of the multiple functions common to business operation, management and governance; the constituencies that a business serves and with which it interacts; and the outside advisors on which businesses rely. International operation and the inherent cultural and legal challenges are reviewed. Employee incentives and evaluation, at the personal and Board of Director levels are outlined; the perspectives of the students will be elicited. Finally, the composition and importance of "The Business Plan", from creation and initial financing of an enterprise, through its on-going evolution, is addresses in detail.

The financial statement is the key instrument to understand the economic performance and financial situation of companies

The second part of the course covers the accounting principles and the construction of a financial statement.

The program is divided into four main parts:

1. introduction of basic accounting principles;
2. recording of business transactions
3. adjusting and closing entries at the end of the period and creation of the financial statement
4. public financial statement

The first part of this course is a combination of pre-reading of the mandatory course text, classroom lectures and discussions, research by students into some of Europe’s Top 50 Companies and classroom exercises during review sessions. If possible, one or two guest speakers will be invited to illustrate from a real life perspective some of the topics discussed.

The second part of the course includes theoretical and practical lessons.

Lectures are held throughout the entire semester. Students are responsible for learning the material before coming to class.

Students are responsible for consulting the course website “my.liuc.it” on a regular basis where updates, additional material, slides and exercises maybe posted.

We highly recommend to do the midterm test.

The assessment for the exams of June and July is based on an oral test in which students are required to solve exercises and answer to theory questions both for Prof. Smith and Prof. Goodman/Tettamanzi parts. To pass the exam, students need to achieve a grade higher than 18/30.