Financial Accounting: Concepts, Methods, and Uses Winter 2022

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Class Details

Businesses engage in tens of thousands of transactions with their suppliers, employees, and customers, and, in doing so, generate millions of numbers. Managers of those businesses prepare financial reports for those interested in the businesses: owners, regulators, labor unions, employees, bankers, and others. The reports summarize the millions of numbers with a few hundred numbers, maybe a thousand. How do you summarize all that data so that readers of the numbers can use them to make the decisions they want to make? The challenge of accounting: how to aggregate data in consistent ways useful for those who make decisions based on the numbers. You study economics and know that owners, regulators, and employees define “profits” differently. Accounting reports to them all. This class will use four intense weeks to give you a framework to understand accounting’s language and structure so that you can teach yourself what you need to know as you go forward on Wall Street or consulting or professional school or as an intelligent layperson reading the newspaper. You will learn to distinguish receipt from revenue, expense from expenditure, funds from reserves, retained earnings from cash, capital from capital [most professors of economics and finance cannot crisply define capital], cost from price, and so on. Given the nature and depth of material we cover, you should plan on committing 24 hours spread over 4-5 days per week between in-class sessions and assignments. I expect that formal classes will be Mon, Tues, Wed, Thurs late mornings for two hours each. We will grapple with the real world of financial economics with at least one practical case each week, including accounting. A final examination will help us both gauge how much of the language and concepts of financial accounting you have successfully mastered.
The Class: Format: lecture
Limit: 30
Grading: pass/fail only
Requirements/Evaluation: daily assignments including case preparation, final exam
Prerequisites: ECON 110
Enrollment Preferences: If the course is over-enrolled, students will submit written statements of interest
Unit Notes: Roman L. Weil has a PhD in Economics and is a CPA. He has taught at the University of Chicago since 1965, becoming emeritus in 2008 and teaching since then at Harvard, Princeton, Stanford, among others. He has written several textbooks, professional reference books, and refereed articles. He invites your questions; write [email protected]
Materials/Lab Fee: $35

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