AD11: Introduction to Financial Accounting

This course equips learners with the fundamental knowledge and practical skills required to understand the principles of financial accounting and the preparation of basic financial records. It introduces learners to bookkeeping, the double-entry system, accounting principles, and the preparation of financial statements, providing a strong foundation for further studies in accounting and finance.

CONTEXT:

• Introduction to accounting
• Nature and purpose of accounting
• Objectives of accounting
• Users of accounting information and their information needs
• Qualities of useful accounting information
• Accounting concepts and principles
• Accounting standards and their importance
• The accounting equation

Double Entry Bookkeeping and Books of Original Entry

• Double entry bookkeeping
• Source documents
• Books of original entry
• The double entry system and the ledger
• The trial balance and basic financial statements
• Manual and computerised accounting systems
• Role of computers in the accounting process
• Application of accounting software in the accounting process
• Benefits and challenges of operating computerised accounting systems

Accounting for Assets and Liabilities

• Accounting for assets and liabilities
• Accrued expenses and prepaid expenses
• Accounting for revenue, including accrued income and prepaid income
• Accounting for accounts receivable, bad debts and allowance for doubtful debts
• Property, plant and equipment
• Capital expenditure, revenue expenditure and revenue
• Depreciation
• Acquisition and disposal of property, plant and equipment
• Inventory recognition, measurement and valuation
• Inventory valuation using specific cost methods
• First-In, First-Out (FIFO) method
• Weighted average cost method
• Accounting for cash and cash equivalents
• Bank reconciliation
• Accounting for accounts payable
• Accounts payable control account

Correction of Accounting Errors and Suspense Account

• Correction of accounting errors
• Types of accounting errors
• Accounting entries for correction of errors
• Suspense account

Financial Statements of a Sole Trader

• Financial statements of a sole trader
• Income statement
• Statement of financial position

Partnership Accounts

• Introduction to partnership accounts
• Contents of a partnership agreement
• Distinction between current accounts and capital accounts
• Appropriation statement
• Partners' current accounts
• Partners' capital accounts
• Income statement
• Statement of financial position
• Accounting for partnerships, excluding changes in partnerships

Company Accounts

• Introduction to company accounts
• Types of share capital
• Ordinary shares
• Preference shares
• Types of reserves
• Share premium
• Revaluation reserve
• General reserves
• Retained profits
• Issue of shares, excluding issue by instalment and forfeiture
• Rights issues
• Bonus issues
• Income tax: accounting treatment and presentation, excluding computation
• Income statement
• Statement of financial position

Emerging Issues and Trends

• Emerging issues and trends in accounting
• Current developments in accounting practice
• Impact of technology on accounting
• Emerging trends in accounting systems and practices