Aim
To develop knowledge and understanding of the
application of techniques to prepare year end
financial statements from a trial balance and
the interpretation of financial statements for
a range of organisations.
Objectives
At
the completion of this module candidates should
be able to:
- Describe
the role and function of external financial
reports
- Identify
the users of external financial reports
- Explain
the accounting concepts and conventions
present in generally accepted accounting
principles
- Draft
limited company, sole trader and partnership
year end financial statements
- Compare
and contrast the form and content of financial
statements for differing organisational
types
- Use
appropriate ratios to analyse financial
statements for performance, position and
adaptability
Content
- Financial
statements: uses of and users, balance sheet,
profit and loss account/income statement,
cash flow statement and notes to the accounts:
function, form and method of preparation
for limited companies, partnerships and
sole traders.
- General
legal framework of limited companies, partnerships
and sole traders; obligations of Directors,
partners and sole traders in respect of
the accounts; forms of capital and capital
structures.
- Generally
accepted accounting principles and concepts:
application of accounting standards and
legislation to the preparation and presentation
of financial statements.
- Taxation
in accounts.
- Key
features, including the capital structure,
of financial statements of a wider range
of organisations; standard classification/chart
of accounts; general principles of consolidation.
- Interpretation
of accounting information for different
types of organisation to assess performance,
liquidity and vulnerability; use of accounting
ratios, trend analysis, performance indicators.
Recommended
Reading
Black, G., Students' Guide to Accounting
and Financial Reporting Standards. Letts
Wood, F., Frank Wood's Business Accounting
1. Pitman Publishing
Wood, F. & Sangster, A., Frank Wood's
Business Accounting 2. Pitman Publishing
Gillespie, I., Lewis, R. & Hamilton, K.,
Principles of Financial Accounting. Prentice
Hall
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