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Financial Accounting: Course outline

Course description

The primary aim of Financial Accounting is to provide students with an introduction to the process and function of financial reporting. Whilst a large proportion of the course is aimed at understanding accounting as a process, taking a preparers’ perspective, we will also seek to develop an understanding of the importance of the role of accounting in today’s society.

Learning outcomes

By the end of this course it is expected that the students will be able to:

  1. Comprehend the language of accounting and financial reporting;
  2. Understand Accounting Cycle
  3. Understand the role of Journal, Ledger and subsidiary books
  4. Be able to prepare balance sheet, profit and loss and cash flow statement.
  5. Understand Final accounts of companies.

Recommended Books

Related books

Course content

Chapter 01. Accounting and its role    

  • Development of accounting
  • Accounting Theory and Conceptual framework
  • Accounting Defined
  • Why study Accounting
  • Financial statements
  • Major fields of Accounting
  • Accounting as a Career
  • Question for Class Discussions                               

Chapter 02.Basic Accounting Concepts

  • The Entity Concept
  • The Reliability (or Objectivity) principle
  • The cost Principle
  • The Going-Concern Assumptions
  • The Stable Currency Assumptions
  • Ethics-the-Most Fundamental Principle of Accounting

Chapter 03. The recording process  

  • The Recognition Issue
  • The Valuation Issue
  • The Classification Issue
  • The Recording Process
  • Analysis of Transaction
  • The Journal
  • The Ledger
  • Balancing the Accounts
  • Trial Balance
  • Limitations of Trial Balance
  • Chart of Accounts                 

Chapter 04. The year and adjustments and financial statements

  • Recording Revenue and Expenses
  • Accounting Period
  • Need for Adjusting Entries
  • Adjusting Entries Illustrated
  • Preparation of Financial Statements

Chapter 05.  Accounting for trading organization

  • The Purchase Function
  • Accounting for Purchase
  • Accounting for Stock and Cost of Goods Sold
  • Periodic System
  • Closing Entries
  • Perpetual System
  • The Accounting for Sales
  • Worksheet
  • Preparation of financial Statements
  • Departmental Accounts

Chapter 06.  Accounting Systems

  • Developing a System
  • Special Journal
  • Subsidiary Journal
  • Special Journal and Posting Process
  • Posting from the Cash Book
  • General Journal

Chapter 07.  Cash and temporary investment

  • Nature and Composition of Cash
  • Cash Management and Control
  • Maintaining Bank Account
  • Steps in Preparing the Bank Reconciliation
  • Over the counter recipts
  • Short term investments

Course content

Week 08

Chapter 08.  Accounting for debtors and stock

  • Accounting Treatment of Bad Debts
  • Direct write-Off Method
  • Aging Schedule
  • Percentage of Sales Method
  • Recoveries of Bad debts
  • Stock
  • Measurement of Stock Quantity
  • Measurement of Stock Cost
  • Perpetual Stock System
  • Periodic Stock System
  • First in First out
  • Last in First out

Week 09

Mid Term

Week 10

Chapter 09. Accounting for property, plant and equipment

  • Property, Plant and Equipment
  • Lum-sum Purchase
  • Subsequent Expenditure
  • Depreciation
  • Units-of-Output Method
  • Reducing-Balance Methods
  • Sum-of-the-years-digits Method
  • Revaluation
  • Review of Useful life
  • Intangible Assets and Amortization
  • Wasting Assets and Depletion
  • Demonstration Problem

Week 11

Chapter 10. Accounting for companies

  • The Company
  • Types of Company
  • Formation of a Public Limited Co,
  • Classes of Shares
  • Ordinary Shares
  • Preference Shares
  • Issuance of Shares
  • Market Value of Shares
  • Share Capital and Share Premium
  • No Par Value Share

Week 12

Chapter 11. Company final Accounts

  • Published Annual Report
  • The contents of the Published Accounts
  • Dividends
  • Reserve
  • Dividend payment process
  • Profit and Loss Appropriation Account

Week 13

Chapter 11. Company final Accounts

  • Alteration of Capital
  • Bonus Shares
  • Right Issue
  • Stock Splits
  • Treasury Stock

Week 14

Chapter 12. Cash Flow Statement

  • The Concept
  • The Advantages
  • Accounting Profit and Cash Flows
  • Preparation of statement of cash Flows
  • Operating Activities
  • Investing Activities
  • Financing Activities

Week 15

Chapter 13. Manufacturing Account

  • Manufacturing and value chain
  • Manufacturing costs-direct costs
  • Manufacturing costs-indirect costs
  • Manufacturing costs-variable costs
  • Fixed costs
  • Manufacturing cost flow
  • Cost of goods sold
  • Manufacturing accounting
  • Manufacturing profit