Duration: 18 weeks
Students will develop knowledge and understanding of the underlying principles and concepts relating to financial accounting and technical proficiency in the use of double-entry accounting techniques, including the preparation of basic financial statements for single entities and simple groups. Students will also be introduced to basic techniques of interpretation of financial statements.
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Description
AIM
To develop knowledge and understanding of the underlying principles and concepts relating to financial accounting and technical proficiency in the use of double-entry accounting techniques including the preparation of basic financial statements.
RATIONALE
The syllabus for Paper Financial Accounting (FA)/FFA introduces the candidate to the fundamentals of the regulatory framework relating to accounts preparation and to the qualitative characteristics of useful information. The syllabus then covers drafting financial statements and the principles of accounts preparation. The syllabus then concentrates in depth on recording, processing, and reporting business transactions and events. The syllabus then covers the use of the trial balance and how to identify and correct errors, and then the preparation of financial statements for incorporated and unincorporated entities. The syllabus then moves in two directions, firstly requiring candidates
to be able to conduct a basic interpretation of financial statements; and secondly requiring the preparation of simple consolidated financial statements from the individual financial statements of group incorporated entities.
MAIN CAPABILITIES
On successful completion of this paper, candidates should be able to:
A. Explain the context and purpose of financial reporting
B. Define the qualitative characteristics of financial information
C. Demonstrate the use of double-entry and accounting systems
D. Record transactions and events
E. Prepare a trial balance (including identifying and correcting errors) F. Prepare basic financial statements for incorporated and unincorporated entities.
G. Prepare simple consolidated financial statements
H. Interpretation of financial statements
Detailed Syllabus
DETAILED SYLLABUS
A The context and purpose of financial reporting
1. The scope and purpose of financial statements for external reporting
2. Users’ and stakeholders’ needs
3. The main elements of financial reports
4. The regulatory framework (legislation and regulation, reasons and limitations, relevance of accounting standards)
5. Duties and responsibilities of those charged with governance.
B The qualitative characteristics of financial information
1. The qualitative characteristics of financial information
C The use of double-entry and accounting systems
1. Double-entry book-keeping principles including the maintenance of accounting records and sources of accounting information
2. Ledger accounts, books of prime entry, and journals
D Recording transactions and events
1. Sales and purchases
2. Cash
3. Inventory
4. Tangible non-current assets
5. Depreciation
6. Intangible non-current assets and amortisation
7. Accruals and prepayments
8. Receivables and payables
9. Provisions and contingencies
10. Capital structure and finance costs
E Preparing a trial balance
1. Trial balance
2. Correction of errors
3. Control accounts and reconciliations
4. Bank reconciliations
5. Suspense accounts
F Preparing basic financial statements
1. Statements of financial position
2. Statements of profit or loss and other comprehensive income
3. Disclosure notes
4 Events after the reporting period
5. Statements of cash flows
6. Incomplete records
G Preparing simple consolidated financial statements
1. Subsidiaries
2. Associates
H Interpretation of financial statements
1. Importance and purpose of analysis of financial statements
2. Ratios
3. Analysis of financial statements
Other information
Approach to examining the syllabus
The syllabus is assessed by a two hour compute rbased examination. Questions will assess all parts of the syllabus and will test knowledge and some comprehension or application of this knowledge. The examination will consist of two sections. Section A will contain 35 two mark objective questions. Section B will contain 2 fifteen mark multi-task questions. These will test consolidations and accounts preparation. The consolidation question could include a small amount of interpretation and the accounts preparation question could be set in the context of a sole trader or a limited company.
