Principles of Financial Accounting

Course Description

The aim of the unit is to help you to understand and apply the principles of financial accounting in a business setting. Learners will gain insight into financial record keeping systems and learn how to adjust and prepare accounts for different business types. In addition, they will learn how professional characteristics and ethical principles are applied and regulated in an accounting context.

Course Objectives

The aim of the unit is to help you to understand and apply the principles of financial accounting in a business setting. Learners will gain insight into financial record keeping systems and learn how to adjust and prepare accounts for different business types. In addition, they will learn how professional characteristics and ethical principles are applied and regulated in an accounting context.

Key Topics

1. LO1: Understand why businesses need to establish financial record-keeping systems.
2. LO2: Be able to account for year-end adjustments.
3. LO3: Be able to prepare financial reporting statements for different types of organisations.
4. LO4: Understand how professional characteristics and ethical principles are applied and regulated in an accountancy context.

Course Outline

Learning Outcomes

1. LO1 Understand why businesses need to establish financial record-keeping systems.
2. 1.1 Explain the need for financial record-keeping.
3. 1.2 Explain the importance of liquidity and solvency in business.
4. 1.3 Explain the accounting equation.
5. 1.4 Explain how to record financial transactions using the double-entry method of bookkeeping.
6. LO2 Be able to account for year-end adjustments.
7. 2.1 Examine the purpose and importance of end of year adjustments in the preparation of final accounts.
8. 2.2 Calculate the value of revenue and cost of sales, for given data, over the accounting period.
9. 2.3 Calculate year-end adjustments, for given data, to account for irrecoverable debts and provisions for doubtful debts.
10. 2.4 Calculate year-end adjustments, for given data, to account for accruals and prepayments when preparing the financial statements.
11. 2.5 Calculate the cost of depreciation from different methods of depreciation for given data.
12. LO3 Be able to prepare financial reporting statements for different types of organisations.
13. 3.1 Explain the purpose of preparing final accounts for sole traders and partnerships.
14. 3.2 Prepare final accounts, including relevant adjustments, for a specific sole trader business.
15. 3.3 Prepare final accounts, including relevant adjustments, for a specific partnership business.
16. 3.4 Analyse the financial statements of a selected business.
17. LO4 Understand how professional characteristics and ethical principles are applied and regulated in an accountancy context.
18. 4.1 Explain the professional characteristics and ethical principles exhibited by an accountant.
19. 4.2 Evaluate the impact of a breach of ethics on accountants and business organisations.
20. 4.3 Explain the role of regulatory bodies for accountancy in a specific country.
21. 4.4 Identify the requirements for external audit and the basic processes undertaken.