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Principles of Accounting I

Principles of Accounting I e-workbook

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