FINANCIAL ACCOUNTING 1 (ACCT 211)

The nature of business transactions and the accounting equation

1. Describe the nature of business transactions. (CK1)
2. Apply the accounting equation.  (CC1)

Double entry bookkeeping and the elements of financial statements 

1. Explain the basis of double entry bookkeeping.  (CK1)
2. Distinguish between assets, liabilities, capital, revenue and expenses (CK1)

Recording transactions

1. Prepare journal entries to record transactions  (CC1)

Preparing ledger accounts

1. Prepare ledger accounts.  (CC1)

Lecture Discussion Group activity on preparing ledger accounts Reading:

Chapter 1

Accounting for sales tax

1. Explain the general principles of the operation of a sales tax.  (CK1)
2. Calculate sales tax on inputs and outputs.  (CC2)
3. Record the consequent accounting entries and calculate the sales tax due to/from the business.  (CC2)

Source documents

1. Describe the source documents for accounting records (CC1)

Books of prime entry 1

1. Record sales and purchases in the books of prime entry. (CC1)

Books of prime entry 2

1. Record receipts and payments in the books of prime entry.  (CC1)
2. Account for trade and settlement discounts.  (CC2)

Lecture Discussion Group activity on preparation of cash receipts book and cash payments book Group activity on calculation of trade and settlement discounts Reading:

Chapter 2

Posting transactions and balancing accounts 1

1. Explain the purpose and use of ledger accounts. (CK1)
2. Post journals and other entries into the appropriate ledger account. (CC1)

Lecture Discussion Group activity on posting transactions to ledger accounts Reading:

Chapter 2

Posting transactions and balancing accounts 2

1. Balance the ledger accounts carrying down and bringing down balances as appropriate.  (CC1)
2. Explain the purpose and use of personal ledgers and the journal (CC1)

The trial balance

1. Explain the purpose of the trial balance.  (CK1)
2. Identify the limitations of the trial balance.  (CK1)
3. Prepare the initial trial balance.  (CC1)

Types of error in double entry

1. Identify different types of bookkeeping errors including those that result in suspense accounts.  (CC3)

Correction of errors 1

1. Identify and explain the action required to correct errors including clearing any suspense accounts.  (CC3)
2. Prepare correcting journal entries.  (CC3)

Correction of errors 2

1. Record correcting entries in the ledgers. (CC3)
2. Demonstrate how the final accounts are affected by the correction of errors.  (CC3)

Introduction to final accounts

1. Explain the format and purpose of the statement of profit or loss (CK1)
2. Explain the format and purpose of the statement of financial position (CK1)
3. Identify the users of final accounts, and their needs (CK1)

Basic framework of accounting

1. Explain the basic principles of accounting. (CK1)
2. Explain the qualitative characteristics of financial information.  (CK1)
3. Explain the role of International Accounting Standards and International Financial Reporting Standards. (CK1)

Non-current assets 1

1. Define current assets and non-current assets. (CK2)
2. Distinguish between capital expenditure and revenue expenditure. (CK2)
3. Account for the acquisition of non-current assets. (CC1)

Non-current assets 2

1. Explain the purpose of depreciation. (CK1)
2. Calculate the charge for depreciation using straight line and reducing balance methods. (CC2)

Non-current assets 3

1. Illustrate how the depreciation expense and accumulated depreciation are recorded in ledger accounts. (CC1)
2. Report non-current assets and depreciation in the final accounts. (CC1)

Non-current assets 4

1. Calculate profits or losses on disposal of non-current assets in the statement of profit or loss. (CC2)
2. Prepare journal and ledger entries to record the disposal of non-current assets. (CC1)
3. Explain the purpose and function of an asset register. (CK1)

Control account reconciliations 1

1. Explain the purpose of reconciliation of the receivables and payables ledger control accounts.  (CK1)
2. Identify errors in the ledger control accounts and list of balances.  (CC3)
3. Make correcting entries in the ledger control accounts.  (CC3)

Control account reconciliations 2

1. Prepare a reconciliation between the list of balances and the corrected ledger control accounts.  (CC3)
2. Identify the control account balance to be reported in the final accounts.  (CC3)

Bank reconciliation 1

1. Explain the purpose of reconciliation between the bank ledger account and the corresponding bank statement. (CK1)
2. Identify errors and omissions in the bank ledger account and bank statement.  (CC3)
3. Identify timing differences.  (CC3)

Bank reconciliation 2

1. Prepare the reconciliation between the bank statement balance and the corrected bank ledger account.  (CC3)
2. Make the correcting entries in the bank ledger account.  (CC3)
3. Identify the bank balance to be reported in the final accounts.  (CC3)

Petty cash

1. Post entries to the petty cash book and restore the imprest amount. (CC3)

Accruals and prepayments 1

1. Define accruals and prepayments. (CK2)
2. Apply the matching concept to accruals and prepayments.  (CK1)
3. Identify and calculate the adjustments needed for accruals when preparing financial statements. (CC2)
4. Prepare the journal entries and ledger entries for the creation of an accrual. (CC1)

Review test covering Chapter 9 Lecture Discussion Group activity on accruals Reading:

Chapter 10

Accruals and prepayments 2

1. Identify and calculate the adjustments needed for prepayments when preparing financial statements. (CC2)
2. Prepare the journal entries and ledger entries for the creation of a prepayment. (CC1)

Accruals and prepayments 3

1. Identify the impact on profit, net assets and capital of accruals and prepayments. (CC1)
2. Report accruals and prepayments in the final accounts. (CC1)

Lecture Discussion Exam practice Reading:

Chapter 10

Provisions

1. Explain the nature of provisions. (CK1)
2. Account for provisions. (CC1)
3. Report for provisions in the final accounts. (CC1)

Lecture Discussion Exam practice Reading:

Chapter 13

Irrecoverable debts and allowances 1

1. Prepare the bookkeeping entries to write off an irrecoverable debt. (CC1)
2. Record an irrecoverable debt recovered. (CC1)
3. Identify the impact of irrecoverable debts on the statement of profit or loss and on the statement of financial position. (CC1)

Irrecoverable debts and allowances 2

1. Calculate the movement in the allowance for receivables and the closing balance. (CC2)
2. Prepare the bookkeeping entries to create and adjust an allowance for receivables. (CC1)

Lecture Discussion Group activity on calculating allowance for receivables and irrecoverable debt expense Reading:

Chapter 11

Irrecoverable debts and allowances 3

1. Illustrate how to include movements in the allowance for receivables in the statement of profit or loss and how the closing balance of the allowance should be reported in the statement of financial position. (CC1)

Lecture Discussion Exam practice Reading:

Chapter 11

Cost of goods sold and inventories 1

1. Define inventory. (CK2)
2. Explain and apply the IAS 2 requirements for valuing inventories. (CC2)
3. Recognise which costs should be included when valuing inventories.  (CC2)
4. Explain the use of continuous and period end inventory records. (CK1)

Cost of goods sold and inventories 2

1. Calculate the value of closing inventory and cost of goods sold using FIFO (first in, first out) and AVCO (average cost) – both periodic weighted average and continuous weighted average. (CC2)

Cost of goods sold and inventories 3

1. Identify the impact of inventory valuation methods on profit, assets and capital. (CC1)
2. Report inventory in the final accounts. (CC1)

Lecture Discussion Exam practice Reading:

Chapter 12

Extended trial balance 1

1. Explain the process of extending the trial balance. (CK1)
2. Record the correction of errors on the extended trial balance. (CC3)
3. Explain and record post trial balance adjustments on the extended trial balance (e.g. accruals, prepayments, depreciation, closing inventory and irrecoverable debts). (CC1)

Extended trial balance 2

1. Complete the extended trial balance including calculating the final reported profit or loss. (CC1)

Extended trial balance 3

1. Prepare statement of profit or loss and statement of financial position. (CC1)
2. Prepare the opening trial balance for the next accounting period. (CC1)

Lecture Discussion Group activity on completing the extended trial balance and preparing statement of profit or loss and statement of financial position Exam practice Reading:

Chapter 14

Preparation of final accounts for sole traders 1

1. Explain the process of preparing a set of final accounts from a trial balance. (CK1)
2. Explain the format and purpose of the statement of profit or loss and statement of financial position for a sole trader. (CK1)

Preparation of final accounts for sole traders 2

1. Prepare statement of profit or loss and statement of financial position for a sole trader. (CC1)

Partnership accounts 1

1. Define a partnership. (CK2)
2. Explain the purpose and content of a partnership agreement. (CK2)

Partnership accounts 2

1. Explain, calculate and account for appropriations of profit. (CC1)

Partnership accounts 3

1. Explain the difference between partners’ capital and current accounts. (CK2)
2. Prepare the partners’ capital and current accounts. (CC1)
3. Prepare the final accounts for a partnership. (CK1)

Partnership accounts 4

1. Explain and account for the admission of a new partner including the treatment of any goodwill arising. (CK1)

Incomplete records 1

1. Describe the circumstances which lead to incomplete records. (CK1)
2. Describe the methods of constructing accounts from incomplete records. (CK1)
3. Calculate sales, cost of sales, purchases and closing inventory value using markups and margins. (CC2)

Incomplete records 2

1. Calculate and account for inventory loss using markups and margins. (CC2)
2. Prepare the final accounts or elements thereof using incomplete record techniques (e.g. ledger accounts to derive missing figures and manipulation of the accounting equation). (CC1)