BU.210.620 Accounting and Financial Reporting
The Complete Exam Bible · Fall 2026BU.210.620 Overview
- 2 credits
- Fall 2026
- Carey Business School
- Graduate level
- Weekly in-person class
What the course is for
Accounting and Financial Reporting is a two-credit graduate course at the Johns Hopkins Carey Business School that runs weekly from 1 September to 20 October 2026. It teaches the vocabulary, methods and processes by which business transactions are communicated: the accounting cycle; transactions in assets, liabilities, equity, revenues and expenses; and the preparation and reading of the balance sheet, the income statement and the statement of cash flows.
- Assessed by Final exam 30%, final presentation 20%, homework 20%, quiz 15%, participation 10%, peer evaluation 5%.
- Hardest step Carrying revenues and expenses into retained earnings when you prepare a balance sheet under time pressure.
- Attendance rule Beyond participation points, unexcused absences cost final-grade points and more than three missed classes means failing.
- How to prepare Write every entry type from memory weekly; the rubric pays per correct line and per shown step.
How BU.210.620 is assessed
| Component | Weight | Format |
|---|---|---|
| Class participation | 10% | Attendance (5 points) and a team news presentation (5 points) |
| Homework | 20% | Weekly assignments in the Connect homework system |
| 1 Quiz | 15% | Week 4 in class: balance sheet and income statement |
| Final Exam | 30% | Week 8, listed as comprehensive |
| Final presentation | 20% | Team financial statement analysis, slides, Excel support and an AI-use document |
| Peer Evaluation | 5% | Evaluation of team members, submitted by the last day of class |
Weights are from the Fall 2026 syllabus and total 100%. Separately from these weights, the attendance policy deducts points from the final course grade for unexcused absences, and a student who misses more than three classes automatically fails the course. Bonus points are available for the best news presentation, top Kahoot scores and a career advising review.
Assessment structure
Segment widths reproduce the six published weights, in syllabus order from class participation to peer evaluation, and total 100%.
Current BU.210.620 dates
| Date | Item | Control |
|---|---|---|
| 22 September 2026 | Quiz 1 | Week 4, in class; tentative calendar |
| 13 October 2026 | Final presentation | Week 7; tentative calendar |
| 20 October 2026 | Final exam | Week 8, comprehensive; tentative calendar |
Dates are as published in the tentative course calendar in the Fall 2026 syllabus. Confirm exact deadlines and submission settings in the live LMS.
What BU.210.620 covers
Seven chapters follow the course's seven modules in teaching order, from the balance sheet to bonds payable.
Balance Sheet and Transaction Analysis
Accounting equation, debits and credits, journal entries, T-accounts and the classified balance sheetWhy the course starts with one equation
Week 1 of BU.210.620 builds everything on assets = liabilities + shareholders' equity.
- Assets, liabilities and shareholders' equity
- Current versus noncurrent classification
- Two-step transaction analysis
- Debits, credits and T-accounts
- Journal, ledger and trial balance
- Preparing a classified balance sheet
Income Statement and Accrual Accounting
Revenue and expense recognition, accrual versus cash basis, operating entries and retained earningsA statement about a period
The income statement reports performance across a period, usually a year, and its bottom line is net income: revenues minus expenses.
- Operating cycle and the time-period assumption
- Revenues, expenses, gains and losses
- Cash basis versus accrual basis
- Revenue and expense recognition
- Journal entries for operating activities
Statement of Cash Flows and the Indirect Method
Operating, investing and financing classification, indirect-method adjustments and reading cash flow patternsWhy a third statement
Net income and cash move apart for three reasons the course stresses: accruals leave uncollected sales and unpaid bills inside income, non-cash expenses such as depreciation and impairment reduce income without using cash, and some cash movements, buying equipment or issuing shares, never touch the income statement.
- Why cash differs from net income
- Cash and cash equivalents
- Operating, investing and financing activities
- Indirect-method adjustments
- Gains, losses and noncash transactions
- Interpreting cash flow patterns
Financial Statement Analysis and Ratios
Common-size statements, profitability, turnover, liquidity and solvency ratios, DuPont and sustainable growthAnalysis starts with strategy
Module 4 treats statements as the end of a chain: business strategy shapes operating decisions, which create transactions, which the statements summarise.
- Strategy and the comparison frame
- Component percentages
- Profitability ratios
- Turnover ratios and the cash conversion cycle
- Liquidity and solvency ratios
- DuPont and the three-level breakdown
Inventory Costing and Cost of Goods Sold
Inventory cost principle, manufacturing cost flow, FIFO, LIFO and weighted average, LIFO conformityWhat inventory cost includes
Module 5 applies the cost principle to goods held for sale.
- Inventory goals and inventory types
- Cost principle and capitalised costs
- Cost of goods sold equation
- FIFO, LIFO, weighted average and specific identification
- Rising versus falling costs and the LIFO conformity rule
Long-Term Assets and Depreciation
Acquisition cost, repairs versus improvements, depreciation methods, impairment, disposal and intangiblesRecording the cost
Module 6 follows a long-lived asset through its life.
- Tangible and intangible long-lived assets
- Acquisition cost and capitalisation
- Repairs versus improvements
- Straight-line and declining-balance depreciation
- Changes in estimates and impairment
- Disposals, intangibles and depletion
Long-Term Liabilities: Notes and Bonds
Notes payable and accrued interest, bond terms, par, discount and premium issues, effective-interest methodDebt in the capital structure
Module 7 turns to the claims that finance a company.
- Capital structure and the liability definition
- Notes payable and accrued interest
- Bond terms, types, covenants and ratings
- Issue price at par, discount or premium
- Effective-interest amortisation schedules
The syllabus gives the prerequisite as none, so the course starts from the accounting equation itself.
How the seven modules build
The first two modules are recording modules.
You learn to analyse a transaction into what was received and what was given, write the journal entry, post it to T-accounts and present a classified balance sheet, then extend the same machinery to revenues and expenses under accrual accounting. The third module turns accrual income back into cash with the indirect method.
The fourth is the analysis module: common-size statements, profitability, turnover, liquidity and solvency ratios, and the DuPont decomposition that the final project also uses.
The last three modules return to specific balance sheet items: inventory and cost of goods sold, property, plant and equipment with intangibles, and long-term liabilities including bonds.
What the grade rewards
The final exam carries 30% and is listed as comprehensive, the final team presentation 20%, homework 20%, the week 4 quiz 15%, class participation 10% and peer evaluation 5%.
The syllabus rubric gives partial credit for each correct journal entry line and each correct account in a prepared statement, but no credit for a calculation shown without steps.
Attendance matters beyond the participation points: the school-wide policy deducts points from the final course grade for unexcused absences, and missing more than three classes means automatically failing the course.
How to use this guide
Each chapter follows one module in teaching order, with a finished worked example built on original company data and practice items with answers.
Read the chapter before class, redo its worked example afterwards without looking, and keep a list of every journal entry type you meet. That list, rehearsed in writing, is the most direct preparation for both the quiz and the final exam.
Worked example · free
Carry a year of operations into retained earnings
- 2Revenue: debit Accounts receivable $90,000, credit Service revenue $90,000; the $70,000 collection moves receivables to cash and adds no revenue.
- 3Expenses: wages $52,000 against cash, utilities $3,000 against utilities payable, depreciation $6,000 against accumulated depreciation.
- 3Net income 90,000 minus 61,000 is $29,000; ending retained earnings are 40,000 plus 29,000 minus 10,000, which is $59,000.
Key terms
- Accounting equation
- The accounting equation states that assets equal liabilities plus shareholders' equity. Every transaction keeps both sides equal, which is why each entry changes at least two accounts.
- Journal entry
- A journal entry records one transaction in date order, listing the accounts debited first and the accounts credited below them, with total debits equal to total credits.
- T-account
- A T-account is a simplified ledger page for one account, with debits on the left and credits on the right, used to accumulate changes and compute an ending balance.
- Accrual basis
- The accrual basis records revenue when goods or services are delivered and expenses when assets are consumed to earn that revenue, regardless of when cash moves.
- Retained earnings
- Retained earnings is the equity account that accumulates net income not distributed as dividends; it rises with income and falls with losses and dividends declared.
- Indirect method
- The indirect method computes operating cash flow by starting from net income and adjusting for non-cash items, gains and losses, and working-capital changes.
- DuPont model
- The DuPont model splits return on equity into net profit margin, total asset turnover and financial leverage, so the source of a change in returns can be located.
- LIFO conformity rule
- The LIFO conformity rule requires a company that uses last-in, first-out for US taxable income to use it for inventory and cost of goods sold in its financial statements as well.
- Net book value
- Net book value is an asset's cost less its accumulated depreciation; it reflects allocation of cost to date, not what the asset would sell for.
- Effective-interest method
- The effective-interest method measures bond interest expense as beginning book value times the market rate per period, with the difference from the cash coupon adjusting the bond's book value.
BU.210.620 FAQ
What does the week 4 quiz look like?
The course announcement describes a 60-minute, closed-book and closed-notes quiz at the start of class, with scratch paper and a calculator provided. Six multiple-choice questions are followed by one problem that combines journal entries with a balance sheet built from them. Revenues and expenses appear, so net income must be carried into ending retained earnings.
How much is the final exam worth and what does it cover?
It carries 30% of the grade, sits in week 8 on 20 October 2026 in the tentative calendar, and is described as comprehensive, so all seven modules are in scope. Check Canvas for the time, room and permitted materials as the date approaches.
How do journal entry questions earn partial credit?
The syllabus rubric awards partial credit for every correct line of a journal entry, and for each correct account when you prepare a statement. Write complete entries with debits first and credits indented even when one line is uncertain, because an omitted line earns nothing at all.
Which cash flow method does the course teach?
The indirect method. Operating cash flow starts from net income, adds back non-cash expenses such as depreciation, removes gains and adds losses on asset sales, and adjusts for changes in current operating assets and liabilities. Investing and financing flows are then listed gross.
Which ratios matter most for the analysis module and project?
Return on assets and return on equity, split with the DuPont model into net profit margin, asset turnover and financial leverage, then traced to expense percentages and individual turnover ratios. Liquidity and solvency ratios complete the picture, and returns use average balances.
How strict are the attendance rules?
One absence is allowed without penalty for illness or with 48 hours of notice; any other reason costs one point off the final course grade. Each further class missed costs five points, and anyone absent from more than three sessions fails the course automatically. Classes with a quiz or major deliverable expect in-person attendance.
What does the final team project involve?
Teams choose a company, analyse ten years of its financial statements using retrieval-augmented generation and agentic AI tools, and present for up to twenty minutes. They must judge whether its efficiency improved or declined over the decade and recommend buying, holding or selling its stock.
Questions students ask in each BU.210.620 chapter
- Is a dividend an expense?
- No. A declared dividend is a distribution to owners, so it lowers retained earnings directly on the declaration date and creates dividends payable until the cash is sent. It never appears among the expenses that determine net income. Chapter 01 · Balance Sheet and Transaction Analysis
- Why is revenue not recorded when a customer pays in advance?
- Because the company has not yet performed. The advance creates an obligation to deliver, recorded as unearned revenue, and it converts to revenue only as the goods or services are provided. Chapter 02 · Income Statement and Accrual Accounting
- Why is a gain on sale subtracted in the operating section?
- The entire sale price is already reported as an investing inflow. Leaving the gain inside net income would count part of the same cash twice, so the indirect method removes it from operating activities. Chapter 03 · Statement of Cash Flows and the Indirect Method
- Should ratios use average or ending balances?
- Returns and turnover ratios in this course use the average of beginning and ending balances, since the income was earned over the whole year. Debt-to-equity and the liquidity ratios use ending balances. State your convention whenever you present a ratio. Chapter 04 · Financial Statement Analysis and Ratios
- Does FIFO mean the oldest units physically leave first?
- Not necessarily. Cost flow methods are assumptions about which purchase prices are matched against revenue; the warehouse can ship goods in any order and the company may still report under FIFO, LIFO or average cost. Chapter 05 · Inventory Costing and Cost of Goods Sold
- Is depreciation the fall in an asset's market value?
- No. It allocates the asset's cost less residual value across the periods that benefit from it, so book value and resale value usually differ, sometimes widely. Chapter 06 · Long-Term Assets and Depreciation
- Why is a bond recorded at the cash received rather than its face value?
- A liability is measured at what it would take to settle it today, which on the issue date is the cash raised. Recording face value for a discount bond would overstate what the company borrowed; the gap is recognised gradually as extra interest expense. Chapter 07 · Long-Term Liabilities: Notes and Bonds
How to study for the exam
Work in the course's own order: record, then report, then read. Each week, rewrite the chapter's worked example from the question alone, then list every new journal entry type and one example of each. Before the quiz, drill complete balance sheets from transaction lists; before the final, add one indirect cash flow statement, one DuPont split and one bond schedule to the rotation.
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