Aim
To
develop knowledge and understanding of the application
of techniques to prepare year end financial
statements and the interpretation of financial
statements for a range of organisational forms.
Objectives
On
completion of this paper candidates should be
able to:
-
describe the role and function of external
financial reports and identify their users
-
explain the accounting concepts and conventions
present in generally accepted accounting
principles
-
record
and summarise accounting data
-
maintain
records relating to capital acquisition
and disposal
-
prepare
basic financial statements for incorporated
enterprises, sole traders and partnerships
-
appraise financial performance and the position
of an organisation through the calculation
and review of basic ratios and
-
demonstrate
the skills expected in Part 1
Content
General
framework incorporated enterprises, partnerships
and sole traders, forms of capital and capital
structures, application of International Accounting
Standards to the preparation and presentation
of financial statements, role of the International
Accounting Standards Committee and other relevant
bodies.
Basic
accounting concepts and principles historic
cost, matching/accruals, prudence, consistency,
materiality.
Double-entry
book-keeping and accounting systems types
of business documentation, form and content
of accounting records, books of original entry,
accounts receivable and payable ledgers, cash
book, general ledger, trial balance, accruals,
prepayments and adjustments, control accounts,
bank reconciliation statements, asset registers,
petty cash operations, general principles of
the operation of a sales tax, incomplete records.
Accounting
treatments current assets, capital expenditure
(characteristics of capital assets, tangible
and intangible non-current assets, distinction
between capital and revenue expenditure), depreciation
(general principles and methods, application
of straight line, reducing balance and sum of
digits methods), liabilities, shareholders equity,
contingencies and events after the balance sheet
date.
Financial
statements uses of and users, key features
- balance sheet, income statement, cash flow
statement and notes to the accounts: function,
form and method of preparation for incorporated
enterprises (including general principles of
consolidation), partnerships and sole traders.
Interpretation
of accounting information for different
types of organisation to assess performance,
liquidity and vulnerability; use of accounting
ratios, trend analysis, performance indicators.
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