Syllabus of Introduction to accounting(old Caf1):

Download syllabus of introduction to accounting(old Caf1)

Introduction to Business and accounting course content:

Types of business:

• Types of business entity
• Advantages and disadvantages of different types of business entity

Introduction to financial accounting:

• The purpose of financial accounting
• Accounting systems
• Chart of accounts
• Financial statements
• Regulation of financial reporting

The needs of users:

• The objective of financial reporting
• Informational needs of those who use financial statements

Business transactions:

• Introduction
• The difference between capital and revenue transactions
• Capital and revenue expenditure
• Revenue and capital receipts

Financial Reporting:

The Conceptual Framework for Financial Reporting:

• Introduction
• Objective
• Scope
• Objective of general purpose financial statements
• Financial statements
• The statement of financial position
• The statement of comprehensive income
• Relationship between the statement of comprehensive income and the statement of financial position

Accounting concepts:

• Introduction
• Accruals basis (matching concept)
• Consistency
• Completeness
• Relevance
• Faithful representation
• Materiality
• Prudence
• Going concern basis
• Substance over form

Enhanced Qualitative characteristics of useful financial information:

• Introduction
• Enhancing qualitative characteristics
• Cost constraint on useful information

The Elements of financial statements:

• Introduction
• Assets
• Liabilities
• Equity
• Income
• Expenses
• Measurement of elements of financial statements
• Recognition of elements of financial statements

The accounting equation:

The Accounting equation:

• A simple representation of the statement of financial position
• The effect of financial transactions on the accounting equation
• Drawings
• Links between the statement of comprehensive income and the statement of financial position using the accounting equation.

Double entry bookkeeping:

Introduction to accounting systems:

• The dual nature of transactions
• Overview of accounting

Basic rules of double entry bookkeeping:

• Debit and credit entries, and T accounts
• The rules of debits and credits
• Double entry book-keeping and the cash account

Account balances and the trial balance:

• Closing off an account (and bringing down the balance)
• Trial balance
• Preparing accounts from a trial balance

The General Journal:

• Journal entries to record transactions
• Illustration using Abbas

General ledger:

• Introduction
• Year-end exercise

Books of prime entry:

Introduction to books of prime entry:

• The role of books of prime entry
• Posting transactions

Accounting for sales:

• Documents in the sales cycle
• Recording sales
• Recording sales returns
• Discounts allowed
• Receivables control account
• Termnology

Accounting for purchases:

• Documents in the purchases cycle
• Recording purchases
• Recording purchase returns
• Discounts received
• Payables control account
• Contra entries
• Terminology

Accounting for cash:

• The cashbook
• Types of cashbook

Bad and doubtful debts:

Bad Debts:

• Introduction
• Accounting for bad debts
• Bad debts recovered

Doubtful Debts:

• Basic double entry for doubtful debts
• Accounting for changes in the allowance account
• Bad and doubtful debts together
• Doubtful debts recovered
• Aged receivables analysis
• Summary of the rules on bad and doubtful debts

Accruals and prepayments:

Accruals and prepayments introduced:

• The accruals concept (matching concept)
• Accruals and prepayments

Accruals:

• Accrued expenses (accruals)
• Method 1: the two account approach for accrued expenses
• Method 2: the one account approach for accrued expenses

Prepayments:

• Prepayments (prepaid expenses)
• Method 1: the two accounts method
• Method 2: the one account method
• Prepaid expenses: calculating the expense for the statement of comprehensive income

Unearned and accrued income:

• Introduction
• Unearned income
• Accrued income

Bank reconciliations:

Bank Reconciliations:

• The cash book (bank account in the general ledger) and bank statements
• Differences and the need for a reconciliation
• Possible cause of confusion
• Format of a bank reconciliation statement
• Bank reconciliations and overdrawn balances

Correction of errors:

Errors:

• Errors in the double entry accounting system
• Errors highlighted by the extraction of a trial balance
• Errors not highlighted by the extraction of a trial balance

Correcting errors:

• An approach to correcting errors
• The effect of errors on profit

Suspense Account:

• Trial balance: differences in total debits and total credits
• Opening a suspense account
• Correcting errors where a suspense account is opened
• Unknown entry

Property, plant and equipment:

Initial measurement:

• Introduction
• Recognition
• Initial measurement
• Exchange transactions
• Subsequent expenditure
• Capital and Revenue items

Depreciation and carrying amount:

• Explanation of depreciation
• Accounting for depreciation
• The purpose of depreciation

Methods of calculating depreciation:

• Straight-line method
• Reducing balance method
• Sum-of-the-digits method
• Depreciation by the number of units produced

Derecognition:

• Gain or loss on disposal of a non-current asset
• Accounting for the disposal of property, plant and equipment

Inventory:

Scope and explanation:

• Introduction
• Scope
• Definitions
• Explanation of defined terms
• Explain the situation when the cost of inventories may not be recoverable

End-of-year adjustments:

• Recording inventory
• Periodic inventory method (period-end method): accounting procedures
• Perpetual inventory method: accounting procedures

Other issues:

• Valuation of inventory
• Cost formulas

Journal entries:

• Introduction
• Inventory Purchases
• Record Production Costs in Overhead
• Move Raw Materials to Work in Process
• Record Inventory Scrap
• Record Finished Goods
• Return to supplier
• Return from customer
• Sale Transaction
• Lower of Cost or NRV
• Summary of journal entries

Disclosure:

• Disclosure requirements

Preparation of financial statements:

Financial Statements:

• The process of preparing financial statements
• The components of financial statements
• Statement of financial position
• Statement of profit and loss and other comprehensive income

Preparing financial Statements:

• Useful guidelines
• Year-end
• Preparation of financial statements: Approach 1
• Preparation of financial statements: Approach 2
• Service organizations

Partnership accounts:

Features of partnership:

• Partnerships
• Partnership accounts
• Partners’ capital

Sharing the profits between the partners:

• Profit-sharing ratio
• Notional salaries for partners
• Notional interest on long-term capital
• Guaranteed minimum profit share
• Changes in the partnership agreement on profit-sharing
• Profits, drawings and the partners’ current accounts

Concept of goodwill:

• Introduction
• Goodwill

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