Course
Overview:
The Cambridge AS Levels
Accounting 9706 course provides students with a comprehensive introduction to
both financial and management accounting, making it an ideal starting point for
those looking to pursue further studies or careers in accounting, finance, or
business management. This course emphasizes the development of a strong
foundation in accounting principles and practices, enabling students to analyze
and interpret financial information effectively.
Course
Objectives:
- Understanding
Financial Accounting:
- Gain
a thorough understanding of how to prepare and present financial
statements, including balance sheets, income statements, and cash flow
statements.
- Learn
the principles and conventions that underpin financial accounting, such
as accruals, consistency, prudence, and the matching concept.
- Mastering
Management Accounting:
- Explore
the key areas of management accounting, including costing methods,
budgeting, and variance analysis.
- Understand
the role of management accounting in planning, control, and
decision-making processes within an organization.
- Applying
Accounting Concepts:
- Apply
accounting principles to real-world scenarios, developing the ability to
record transactions accurately, and prepare financial statements that
reflect the financial position and performance of a business.
- Understand
the importance of ethical considerations and professional conduct in
accounting practices.
- Developing
Analytical and Decision-Making Skills:
- Analyze
financial data to assess the profitability, liquidity, and financial
stability of a business.
- Develop
decision-making skills by interpreting financial information and making
recommendations based on financial analysis.
- Preparing
for Advanced Studies:
- Build
a solid foundation in accounting that prepares students for further
studies in the field, particularly at the A Levels or university level.
- Develop
skills in critical thinking, problem-solving, and effective
communication, which are essential for success in higher education and
professional careers.
Course
Content:
<!--[if !supportLists]-->1.
<!--[endif]-->Financial accounting
<!--[if !supportLists]-->1.1
<!--[endif]-->Types of business entity
<!--[if !supportLists]-->o
<!--[endif]-->the different types of business entity:
– sole trader
– partnership
– limited company (including public limited company (plc))
<!--[if !supportLists]-->o
<!--[endif]-->the advantages and disadvantages of these types
of business entity
<!--[if !supportLists]-->o
<!--[endif]-->sources of finance and methods of funding for
these types of business entity including:
– loans (secured and unsecured)
– bank overdrafts
– payment by instalments
– rental/leasing as an alternative to purchase
– trade credit
–
sources of finance for limited companies
1.2. The accounting system
<!--[if !supportLists]-->o
<!--[endif]-->the principles of the double entry system to
record business transactions
<!--[if !supportLists]-->o
<!--[endif]-->the accounting equation
<!--[if !supportLists]-->o
<!--[endif]-->the role of books of prime entry in the
recording of business transactions
– sales journal
– sales returns journal
– purchases journal
– purchases returns journal
– cash book
– general journal
<!--[if !supportLists]-->o
<!--[endif]-->preparation of ledger accounts
<!--[if !supportLists]-->o
<!--[endif]-->the purpose of a trial balance
<!--[if !supportLists]-->o
<!--[endif]-->the advantages and disadvantages of maintaining
full accounting records
<!--[if !supportLists]-->o
<!--[endif]-->the accounting concepts underpinning the
preparation of accounts: business entity, historic cost, money measurement,
going concern, consistency, prudence, realization, duality, materiality,
objectivity, matching / accruals and substance over form
<!--[if !supportLists]-->o
<!--[endif]-->the use of computerized accounting systems in
recording financial transactions
<!--[if !supportLists]-->o
<!--[endif]-->the advantages and disadvantages of introducing
a computerized accounting system
<!--[if !supportLists]-->o
<!--[endif]-->the ways in which the security of data can be
ensured within a computerized accounting system
1.3. Capital and revenue income and expenditure
<!--[if !supportLists]-->o
<!--[endif]-->the difference between the treatment of capital
and revenue income and capital and revenue expenditure
<!--[if !supportLists]-->o
<!--[endif]-->the effect on profit/loss and asset value of the
incorrect treatment of capital and revenue expenditure
1.4. Changing asset values
<!--[if !supportLists]-->o
<!--[endif]-->factors that cause the value of non-current
assets to depreciate
<!--[if !supportLists]-->o
<!--[endif]-->the purpose of accounting for depreciation of
non-current assets and the associated application of relevant accounting
concepts
<!--[if !supportLists]-->o
<!--[endif]-->how to calculate depreciation using the reducing
balance and straight-line methods
<!--[if !supportLists]-->o
<!--[endif]-->the most appropriate method of calculating
depreciation
<!--[if !supportLists]-->o
<!--[endif]-->how to measure the value of non-current assets
by the cost model or the revaluation model
<!--[if !supportLists]-->o
<!--[endif]-->how to prepare ledger accounts and journal
entries for:
– non-current assets (acquisition and revaluation)
– depreciation and disposal (including entries for part exchange)
<!--[if !supportLists]-->o
<!--[endif]-->how to calculate profit or loss on disposal of a
non-current asset
<!--[if !supportLists]-->o
<!--[endif]-->how to record the effect of a charge for
depreciation in the statement of profit or loss and statement of financial
position
1.5. Reconciliation and verification
<!--[if !supportLists]-->o
<!--[endif]-->the need to reconcile and verify ledger accounts
using documentation from internal and external sources
<!--[if !supportLists]-->o
<!--[endif]-->the benefits and limitations of reconciliation
and verification procedures
1.6. Trial balance
<!--[if !supportLists]-->o
<!--[endif]-->errors which affect the trial balance
<!--[if !supportLists]-->o
<!--[endif]-->errors which do not affect the trial balance:
– omission
– commission
– principle
– original entry
– reversal
– compensating
<!--[if !supportLists]-->o
<!--[endif]-->how to prepare ledger accounts and journal
entries to correct errors using a suspense account
<!--[if !supportLists]-->o
<!--[endif]-->the effect on the financial statements of the
correction of errors
<!--[if !supportLists]-->o
<!--[endif]-->the benefits and limitations of a trial balance
1.7. Bank reconciliation statements
<!--[if !supportLists]-->o
<!--[endif]-->updating of cash books
<!--[if !supportLists]-->o
<!--[endif]-->how to prepare bank reconciliation statements
<!--[if !supportLists]-->o
<!--[endif]-->the benefits and limitations of preparing a bank
reconciliation statement
1.8. Control accounts
<!--[if !supportLists]-->o
<!--[endif]-->entries in control accounts
<!--[if !supportLists]-->o
<!--[endif]-->sales ledger control accounts and purchases
ledger control accounts
<!--[if !supportLists]-->o
<!--[endif]-->reconciliation statements between control
account balances and ledger balances
<!--[if !supportLists]-->o
<!--[endif]-->the effects on financial statements of the
correction of errors
<!--[if !supportLists]-->o
<!--[endif]-->the benefits and limitations of control accounts
1.9. Adjustments to draft financial statements
<!--[if !supportLists]-->o
<!--[endif]-->how to calculate and record the adjustments
needed and the effect on financial statements in respect of:
– accruals and prepayments of income and expenses
– irrecoverable debts, irrecoverable debts recovered and allowance for
irrecoverable debts
– depreciation
– inventory valuation
–
correction of errors
1.10. Sole traders
<!--[if !supportLists]-->o
<!--[endif]-->how to prepare a statement of profit or loss and
statement of financial position for a sole trader from full or incomplete
accounting records. The business may be a trading or a service business
1.11. Partnerships
<!--[if !supportLists]-->o
<!--[endif]-->how to prepare a statement of profit or loss,
appropriation account and statement of financial position for a
<!--[if !supportLists]-->o
<!--[endif]-->partnership from full or incomplete accounting
records. The business may be a trading or a service business
<!--[if !supportLists]-->o
<!--[endif]-->why partners may maintain separate capital
accounts and current accounts
<!--[if !supportLists]-->o
<!--[endif]-->how to prepare partners’ capital and current
accounts
<!--[if !supportLists]-->o
<!--[endif]-->the contents of a partnership agreement
<!--[if !supportLists]-->o
<!--[endif]-->the advantages and disadvantages to partners of
maintaining a partnership agreement
<!--[if !supportLists]-->o
<!--[endif]-->the provisions of the Partnership Act 1890 in
respect of partners’ salaries, division of profit or loss, interest on
partners’ loans, interest on capital and interest on drawings
1.12. Limited companies
<!--[if !supportLists]-->o
<!--[endif]-->the features and accounting treatment of
ordinary shares, bonus issues, rights issues, debentures, dividends and
reserves
Note: Questions will not be set on preference shares.
<!--[if !supportLists]-->o
<!--[endif]-->the advantages and disadvantages to the company
and to the shareholders of a company making a bonus issue of shares and a
rights issue of shares
<!--[if !supportLists]-->o
<!--[endif]-->the advantages and disadvantages to the company
and to the shareholders of a company issuing shares and issuing debentures
<!--[if !supportLists]-->o
<!--[endif]-->the distinction between capital reserves (share
premium and revaluation reserve) and revenue reserves (retained earnings and
general reserve)
<!--[if !supportLists]-->o
<!--[endif]-->how to prepare ledger accounts to record:
– an issue of ordinary shares at par or at a premium
– a rights issue of shares at par or at a premium
– a bonus issue of shares
Note: For the purpose of a bonus issue of shares, the revaluation
reserve is not to be used.
<!--[if !supportLists]-->o
<!--[endif]-->how to prepare a statement of profit or loss,
statement of financial position and statement of changes in equity for a
limited company. The business may be a trading or a service business
<!--[if !supportLists]-->o
<!--[endif]-->sources of finance for specified purposes
1.13. Users of accounting information
<!--[if !supportLists]-->o
<!--[endif]-->the differing requirements for information of
stakeholders including:
– owners
– managers
– employees
– investors
– lenders
– suppliers
– customers
– government
– public and environmental bodies
<!--[if !supportLists]-->o
<!--[endif]-->how to communicate and analyses the information
required by these different stakeholders
1.14. Calculation and evaluation of ratios
<!--[if !supportLists]-->o
<!--[endif]-->how to calculate key accounting ratios to
measure profitability, liquidity and efficiency:
– profitability ratios: gross profit margin, mark-up, profit margin,
return on capital employed, expenses to revenue ratio (operating expenses to
revenue ratio)
– liquidity ratios: current ratio, acid test ratio
– efficiency ratios: non-current asset turnover, trade receivables
turnover (days), trade payables turnover (days), inventory turnover (days),
rate of inventory turnover (times)
<!--[if !supportLists]-->o
<!--[endif]-->how to evaluate the profitability, liquidity and
efficiency of an organization by interpreting ratios
<!--[if !supportLists]-->o
<!--[endif]-->possible measures to improve the profitability,
liquidity and efficiency of an organization
<!--[if !supportLists]-->o
<!--[endif]-->the limitations of accounting information
<!--[if !supportLists]-->2.
<!--[endif]-->Cost and Management Accounting
<!--[if !supportLists]-->2.1
<!--[endif]-->Materials and labour
<!--[if !supportLists]-->o
<!--[endif]-->accounting for material and labour costs
<!--[if !supportLists]-->o
<!--[endif]-->how to identify and calculate fixed costs,
variable costs, semi-variable costs and stepped costs
<!--[if !supportLists]-->o
<!--[endif]-->how to identify and calculate the elements of
direct and indirect costs
<!--[if !supportLists]-->o
<!--[endif]-->how to calculate the value of closing inventory
using the first in first out (FIFO) and weighted average cost (AVCO) methods
(perpetual and periodic)
<!--[if !supportLists]-->o
<!--[endif]-->the principles of just in time (JIT) management
of inventory
2.2. Costing applications
<!--[if !supportLists]-->o
<!--[endif]-->how to apply traditional costing methods to
prepare costing statements using unit, job and batch costing principles in both
manufacturing and service businesses as applicable
2.3. Absorption costing
<!--[if !supportLists]-->o
<!--[endif]-->the difference between a cost center and a cost
unit
<!--[if !supportLists]-->o
<!--[endif]-->how to allocate and apportion overhead
expenditure between production and service departments
<!--[if !supportLists]-->o
<!--[endif]-->how to calculate overhead absorption rates using
an appropriate basis
<!--[if !supportLists]-->o
<!--[endif]-->the causes and the calculation of under
absorption and over absorption of overheads
<!--[if !supportLists]-->o
<!--[endif]-->how to prepare costing and profit statements
using absorption costing
<!--[if !supportLists]-->o
<!--[endif]-->the uses and limitations of absorption costing
<!--[if !supportLists]-->o
<!--[endif]-->the usefulness of absorption cost data as a
support for management decision-making
<!--[if !supportLists]-->o
<!--[endif]-->non-financial factors and their significance
2.4. Marginal costing
<!--[if !supportLists]-->o
<!--[endif]-->how to calculate the contribution of a product
<!--[if !supportLists]-->o
<!--[endif]-->how to interpret a break-even chart
Note: Candidates will not be asked to prepare a break-even chart.
<!--[if !supportLists]-->o
<!--[endif]-->how to calculate the break-even point,
contribution to sales ratio, level of output or sales to achieve a target profit,
and margin of safety
<!--[if !supportLists]-->o
<!--[endif]-->the use and limitations of break-even analysis
<!--[if !supportLists]-->o
<!--[endif]-->how to prepare costing and profit statements
using marginal costing
<!--[if !supportLists]-->o
<!--[endif]-->how to prepare a statement reconciling the
reported profits using marginal costing and absorption costing
<!--[if !supportLists]-->o
<!--[endif]-->the uses and limitations of marginal costing
<!--[if !supportLists]-->o
<!--[endif]-->the usefulness of marginal costing data as a
support for management decision-making, including make-or buy, special orders,
closure of business unit, limiting factors, target profit
<!--[if !supportLists]-->o
<!--[endif]-->non-financial factors and their significance
2.5. Cost–volume–profit analysis
<!--[if !supportLists]-->o
<!--[endif]-->the advantages and limitations of
cost–volume–profit analysis
<!--[if !supportLists]-->o
<!--[endif]-->the usefulness of cost–volume–profit data as a
support for management decision-making
<!--[if !supportLists]-->o
<!--[endif]-->how to apply costing concepts to make business
decisions and recommendations using supporting data
<!--[if !supportLists]-->o
<!--[endif]-->non-financial factors and their significance
Lectures: 2 Topics , 19 Sub Topics
Duration:
Language: English
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