Principles of Accounting I
Introduces the generally accepted accounting principles by studying transactions throughout the accounting cycle from journal entries
to financial statements. The elements of the balance sheet are examined.
This E-Workbook focuses on the procedures of basic financial accounting, providing unlimited practice of transaction analysis
and journal entries.
Part 1: Introduction to accounting
The accounting environment
- Key regulatory and professional bodies
- Standards in accounting
- Ethics in accounting with reference to recent corporate collapses
- The role of accounting in decision making
- Different business structures and their suitability
- Assumptions and qualitative characteristics of financial reports
Part 2: Transactions throughout the accounting cycle
Introduction to financial statements and the accounting equation
- Financial statements: income, balance sheet, cash flow
- Assets, liabilities, equity, income, expenses
- The accounting equation and its application to transactions
- Including income, expense and profit in the accounting equation
- Specific asset, liability, equity, income and expense accounts
Starting the accounting cycle – recording transactions
- Transactions and their journey through the accounting cycle
- Transaction analysis
- Rules of debit and credit including the normal balance of accounts
- Journal entries using double entry accounting including T-accounts
- Posting transactions to the general ledger
- The purpose and limitations of a trial balance
Adjusting entries and accrual concepts
- Comparing cash and accrual accounting
- Temporary/nominal and permanent/real accounts
- Deferrals and accruals: their similarities and differences
- Preparing adjusting entries for deferrals, prepayments and accruals
Completing the accounting cycle
- Adjusting and closing entries
- Preparing adjusted and post-closing trial balances
- Preparing financial statements
- Reversing entries at the beginning of the next accounting period
Part 3: Exploring the balance sheet
Current assets: receivables, cash and their internal control
- Accounting for uncollectible receivables
- Preparing journal entries for receivables
- The principles and limitiations of internal control procedures
- Accounting for petty cash
- Preparing bank reconciliation statements
Current assets: inventory and its purchase and sale
- Comparing periodic and perpetual inventory systems
- Journal entries for inventory: purchases, sales, returns, discounts
- Calculating cost of sales and its impact on profit
- Inventory costing methods: FIFO, LIFO, weighted average, specific unit
- Inventory valuation and estimation issues
- Goods and services tax
Non-current assets: their acquisition and depreciation
- Acquisition costs of non-current assets
- Concepts of depreciation and amortisation
- Methods of depreciation
- Preparing journal entries for acquisition and depreciation
- Subsequent expenditure: repairs, maintenance, improvements
Liabilities and owners’ equity
- Classifying current and non-current liabilities
- Preparing journal entries for specific liabilities
- Provisions and contingencies
- Owners’ equity: share capital, reserves and retained earnings
- Ordinary and preference shares
- Journal entries for share issues and cash dividends