This module aims to provide students with knowledge of basic accounting concepts, terminology, principles
and formats and an understanding of the rules of double entry bookeeping. The student will develop the
ability to prepare the financial ststements for a sole trader with adjustments.
Introduction to Accounting
The purpose and role of accounting information, accounting terminology, the accounting equation, and the importance of capital.
Concepts and Policies
The role of financial accounting information in business and society; The users of financial statements and their informationneeds. Understanding the main Accounting Concepts: Going Concern; Accruals; Money Measurement; Separate Entity;Materiality etc. The qualitative characteristics of useful financial information: Understandability; Relevance; Reliability;Comparability, Faithful Representation, Verifiability and Timeliness. Classification of capital and revenue expenditure/receipts.Differences between financial accounting and management accounting.
Book-keeping and the Recording of Transactions and Adjustments
Books of prime-entry, double-entry book-keeping and ledger accounts. The Nominal Ledger. Accounting for various forms ofincome including rental and investment. Accounting for returns, carriage, discounts etc. The Trial Balance. The Extended TrialBalance. Journals, correction of errors excluding the use of suspense accounts. Accruals, prepayments and adjustments.Accrued and Prepaid income. Accounting treatment of non-current assets, acquisitions during the accounting year. Depreciation -straight-line and reducing balance methods. Accounting treatment of current assets and liabilities. Inventory valuations anddisclosures. Receivables – writing off bad debts and provisions for doubtful debts. Accounting for VAT, PAYE. Bankreconciliations.
The Financial Statements of a Sole Trader
Definition of assets, liabilities and equity/capital, and their disclosure in the Statement of Financial Position. Format andpresentation of the Income Statement and Statement of Financial Position. Application of the accruals/matching concept to assetsand liabilities, and to income and expenses. Format and presentation of the Income Statement. The significance of Gross Profitand Net Profit. The relationship between the Statement of Financial Position and the Income Statement.
The teaching strategy for all of these modules is one which emphasises the need for the student to be actively engaged in the learning process, both in class and when they are studying in their own time. In order to achieve this, students are encouraged to ask and answer questions during class, to do examples in class as well as following solutions prepared by the lecturer. Where a new topic is introduced lecturers sometimes use brainstorming techniques to gauge what knowledge students already have of the topic. Accounting is a subject where cumulative knowledge is very important – thus, lecturers use a teaching strategy, which helps to build on students’ prior knowledge of accounting thereby encouraging a constructivist learning approach among students. At each stage of the teaching of these modules, double entry is used to help in this regard. Lecturers also use a concept-based approach to teaching International Financial Reporting Standards, which emphasises the underlying assumptions that inform these standards. At all levels there is a balance between explaining the theoretical aspects of this subject and demonstrating the practical impacts of that theory in the financial statements of a variety of organisation types. Knowledge of material covered in this and other pillars form the basis for an understanding of the advanced material covered in this pillar. Accounting, and in particular the study of International Financial Reporting Standards, is constantly changing. As the syllabi coverage in these modules is largely exemption driven the material covered is regularly updated, as International Financial Reporting Standards change. This requires lecturers to keep up to date through continuous professional development courses and their own research and ensures that material being learned by students is current. Class handouts and a comprehensive textbook support the teaching of the material in all years. Published accounts are also widely used in class by lecturers to emphasise the real- world nature of what students are learning and this aspect is also informed by the experience gained by lecturers who have practical knowledge of Financial Accounting in a business environment. Some companies now include a range of non-financial information in their financial statements including their use of clean technology, details about energy and water consumption and their efforts to protect local habitat and their involvement in local community issues. In our teaching of this pillar we will ensure students acquire knowledge regarding such disclosures and their impact in supporting sustainability.
|Module Content & Assessment