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Intro to Financial Accounting (Double Entry System (The accounting…
Intro to Financial Accounting
Purpose of Financial Reporting and Characteristics of Financial Information
Stakeholders' needs for financial reports
Defining accounting and bookkeeping
Elements of financial reports
Accounting concepts
Going concern
Prudence
Consistency
Accruals
Historic cost
Money measurement
Materiality
Realisation
Business entity
Importance of accounting standards
Double Entry System
The accounting equation and the concept of double entry
Books of prime entry and ledger accounts
Three column cash book
Recording and posting transactions: sales, purchases, receipts and payments
Trial balance
The journal
Errors
Correcting errors and suspense accounts
Capital and Revenue Expenditures
Tangible non-current assets
Asset Depreciation: Straight line, Reducing Balance and Revaluation method
Acquisition and disposal
Preparation of Financial Statements
Income Statement and balance sheet of a sole trader
Adjusting and non-adjusting events
Posting end of the year adjustments: prepaid or accrued incomes or expenditure, provision for depreciation, bad debts and provision for bad debts
Control Accounts
Understand the purpose of control accounts for accounts receivable and accounts payable
Understand how control accounts relate to the double-entry system.
Prepare ledger control accounts from given information
Perform control account reconciliations for accounts receivable and accounts payable
Identify errors which would be highlighted by performing control account reconciliation.
Identify and correct errors in control accounts and ledger accounts.
Bank Reconciliation Statement
Reconciliation of cash book with bank statement:
Unpresented cheques
Bank charges
Bank Interest paid and received
Direct debits
Standing orders
Credit transfers
Dividends
Correction of errors
Uncredited deposits
Incomplete Records
Use of accounting equation
Use of ledgers to calculate missing figures
Use of cash and/or bank summaries
Use of profit percentages to calculate missing figuress
Accounts of Partnership
Capital accounts and current accounts
Final accounts
Cash flow statements
Difference between profit and cash
Need for controlling cash flows
Statement of cash flows
Capital Structure of Limited Companies
Reserves
Issue of shares
Ratio Analysis
Purpose and interpretation of ratios:
Profitability
Liquidity
Efficiency
Position