This module aims to provide students with knowledge of basic accounting concepts, terminology, principles and formats. It is intended that this knowledge will be applied to various business scenarios and functions so that an appreciation of the important role of financial information will be attained by the student.
Introduction to Accounting
The purpose and role of accounting information, accounting terminology, the accounting equation, and the importance of capital.
Accounting standards
Basic introduction to the following International accounting standards: IAS 2 Inventories; IAS 8 Accounting Policies; Changes in Accounting Estimates and Errors; IAS 16 Property; Plant and Equipment.
Concepts and Policies
Basic introduction to the Conceptual Framework published by the IASB including: The role of financial accounting information in business and society; The users of financial statements and their information needs. Understanding the main Accounting Concepts: Going Concern; Accruals; Money Measurement; Seperate 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 of income including rental and investment.Accounting for returns, carriage, discounts etc.The Trial Balance.Journals, correction of errors excluding the use of suspense accounts.Accruals, prepayments and adjustments.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 and disclosures.Receivables – writing off bad debts and provisions for doubtful debts.Bank reconciliations.Accounting for VAT, PAYE.
The Financial Statements of a Sole Trader
Definition of assets, liabilities and equity/capital, and their disclosure in the Balance Sheet.Format and presentation of the Income Statement and Balance Sheet.Application of the accruals/matching concept to assets and liabilities, and to income and expenses.Format and presentation of the Income Statement. The significance of Gross Profit and Net Profit.The relationship between the Balance Sheet and the Income Statement.The importance of International Accounting Standards and terminology as they relate to the financial statements of a sole trader.
| Module Content & Assessment | |
|---|---|
| Assessment Breakdown | % |
| Other Assessment(s) | 30 |
| Formal Examination | 70 |