Accounting | 0452

prepare purchases ledger and sales ledger control accounts to include credit purchases and sales, receipts and payments, cash discounts, returns, irrecoverable debts, dishonoured cheques, interest on overdue accounts, contra entries, refunds, opening 1.1 The purpose of accounting - understand and explain the difference between book-keeping and accounting 1.1 The purpose of accounting - state the purposes of measuring business profit and loss 1.1 The purpose of accounting - explain the role of accounting in providing information for monitoring progress and decision-making 1.2 The accounting equation - explain the meaning of assets, liabilities and owner's equity 1.2 The accounting equation - explain and apply the accounting equation 2.1 The double entry system of book-keeping - outline the double entry system of book-keeping 2.1 The double entry system of book-keeping - process accounting data using the double entry system 2.1 The double entry system of book-keeping - prepare ledger accounts 2.1 The double entry system of book-keeping - post transactions to the ledger accounts 2.1 The double entry system of book-keeping - balance ledger accounts as required and make transfers to financial statements 2.1 The double entry system of book-keeping - interpret ledger accounts and their balances 2.1 The double entry system of book-keeping - recognise the division of the ledger into the sales ledger, the purchases ledger and the nominal (general) ledger 2.2 Business documents - recognise and understand the following business documents: invoice, debit note, credit note, statement of account, cheque, receipt 2.2 Business documents - complete pro-forma business documents 2.2 Business documents - understand the use of business documents as sources of information: invoice, credit note, cheque counterfoil, paying-in slip, receipt, bank statement 2.3 Books of prime entry - explain the advantage of using various books of prime entry 2.3 Books of prime entry - explain the use of and process accounting data in the books of prime entry: cash book, petty cash book, sales journal, purchases journal, sales returns journal, purchases returns journal and the general journal 2.3 Books of prime entry - post the ledger entries from the books of prime entry 2.3 Books of prime entry - distinguish between and account for trade discount and cash discounts 2.3 Books of prime entry - explain the dual function of the cash book as a book of prime entry and as a ledger account for bank and cash 2.3 Books of prime entry - explain the use of and record payments and receipts made by bank transfers and other electronic means 2.3 Books of prime entry - explain and apply the imprest system of petty cash 3.1 The trial balance - understand that a trial balance is a statement of ledger balances on a particular date 3.1 The trial balance - outline the uses and limitations of a trial balance 3.1 The trial balance - prepare a trial balance from a given list of balances and amend a trial balance which contains errors 3.1 The trial balance - identify and explain those errors which do not affect the trial balance: commission, compensating, complete reversal, omission, original entry, principle 3.2 Correction of errors - correct errors by means of journal entries 3.2 Correction of errors - explain the use of a suspense account as a temporary measure to balance the trial balance 3.2 Correction of errors - correct errors by means of suspense accounts 3.2 Correction of errors - adjust a profit or loss for an accounting period after the correction of errors 3.2 Correction of errors - understand the effect of correction of errors on a statement of financial position 3.3 Bank reconciliation - understand the use and purpose of a bank statement 3.3 Bank reconciliation - update the cash book for bank charges, bank interest paid and received, correction of errors, credit transfers, direct debits, dividends, and standing orders 3.3 Bank reconciliation - understand the purpose of and prepare a bank reconciliation statement to include bank errors, uncredited deposits and unpresented cheques 3.4 Control accounts - understand the purposes of purchases ledger and sales ledger control accounts 3.4 Control accounts - identify the books of prime entry as sources of information for the control account entries 4.1 Capital and revenue expenditure and receipts - distinguish between and account for capital expenditure and revenue expenditure 4.1 Capital and revenue expenditure and receipts - distinguish between and account for capital receipts and revenue receipts 4.1 Capital and revenue expenditure and receipts - calculate and comment on the effect on profit of incorrect treatment 4.1 Capital and revenue expenditure and receipts - calculate and comment on the effect on asset valuations of incorrect treatment 4.2 Accounting for depreciation and disposal of non-current assets - define depreciation 4.2 Accounting for depreciation and disposal of non-current assets - explain the reasons for accounting for depreciation 4.2 Accounting for depreciation and disposal of non-current assets - name and describe the straight-line, reducing balance and revaluation methods of depreciation 4.2 Accounting for depreciation and disposal of non-current assets - prepare ledger accounts and journal entries for the provision of depreciation 4.2 Accounting for depreciation and disposal of non-current assets - prepare ledger accounts and journal entries to record the sale of non-current assets, including the use of disposal accounts 4.3 Other payables and other receivables - recognise the importance of matching costs and revenues 4.3 Other payables and other receivables - prepare ledger accounts and journal entries to record accrued and prepaid expenses 4.3 Other payables and other receivables - prepare ledger accounts and journal entries to record accrued and prepaid incomes 4.4 Irrecoverable debts and provision for doubtful debts - understand the meaning of irrecoverable debts and recovery of debts written off 4.4 Irrecoverable debts and provision for doubtful debts - prepare ledger accounts and journal entries to record irrecoverable debts 4.4 Irrecoverable debts and provision for doubtful debts - prepare ledger accounts and journal entries to record recovery of debts written off 4.4 Irrecoverable debts and provision for doubtful debts - explain the reasons for maintaining a provision for doubtful debts 4.4 Irrecoverable debts and provision for doubtful debts - prepare ledger accounts and journal entries to record the creation of, and adjustments to, a provision for doubtful debts 4.5 Valuation of inventory - understand the basis of the valuation of inventory at the lower of cost and net realisable value 4.5 Valuation of inventory - prepare simple inventory valuation statements 4.5 Valuation of inventory - recognise the importance of valuation of inventory and the effect of an incorrect valuation of inventory on gross profit, profit for the year, equity and asset valuation 5.1 Sole traders - explain the advantages and disadvantages of operating as a sole trader 5.1 Sole traders - explain the importance of preparing income statements and statements of financial position 5.1 Sole traders - explain the difference between a trading business and a service business 5.1 Sole traders - prepare income statements for trading businesses and for service businesses 5.1 Sole traders - understand that statements of financial position record assets and liabilities on a specified date 5.1 Sole traders - recognise and define the content of a statement of financial position: non-current assets, intangible assets, current assets, current liabilities, non-current liabilities and capital 5.1 Sole traders - understand the inter-relationship of items in a statement of financial position 5.1 Sole traders - prepare statements of financial position for trading businesses and service businesses 5.1 Sole traders - make adjustments for provision for depreciation using the straight line, reducing balance and revaluation methods 5.1 Sole traders - make adjustments for accrued and prepaid expenses and accrued and prepaid income 5.1 Sole traders - make adjustments for irrecoverable debts and provisions for doubtful debts 5.1 Sole traders - make adjustments for goods taken by the owner for own use 5.2 Partnerships - explain the advantages and disadvantages of forming a partnership 5.2 Partnerships - outline the importance and contents of a partnership agreement 5.2 Partnerships - explain the purpose of an appropriation account 5.2 Partnerships - prepare income statements, appropriation accounts and statements of financial position 5.2 Partnerships - record interest on partners' loans, interest on capital, interest on drawings, partners' salaries and the division of the balance of profit or loss 5.2 Partnerships - make adjustments to financial statements as detailed in 5.1 (sole traders) 5.2 Partnerships - explain the uses of and differences between capital and current accounts 5.2 Partnerships - draw up partners' capital and current accounts in ledger account form and as part of a statement of financial position 5.3 Limited companies - explain the advantages and disadvantages of operating as a limited company 5.3 Limited companies - understand the meaning of the term limited liability 5.3 Limited companies - understand the meaning of the term equity 5.3 Limited companies - understand the capital structure of a limited company comprising preference share capital, ordinary share capital, general reserve and retained earnings 5.3 Limited companies - understand and distinguish between issued, called-up and paid-up share capital 5.3 Limited companies - understand and distinguish between share capital (preference shares and ordinary shares) and loan capital (debentures) 5.3 Limited companies - prepare income statements, statements of changes in equity and statements of financial position 5.4 Clubs and societies - distinguish between receipts and payments accounts and income and expenditure accounts 5.4 Clubs and societies - prepare receipts and payments accounts 5.4 Clubs and societies - prepare accounts for revenue-generating activities, e.g. refreshments, subscriptions 5.4 Clubs and societies - prepare income and expenditure accounts and statements of financial position 5.4 Clubs and societies - define and calculate the accumulated fund 5.5 Manufacturing accounts - distinguish between direct and indirect costs 5.5 Manufacturing accounts - understand direct material, direct labour, prime cost and factory overheads 5.5 Manufacturing accounts - understand and make adjustments for work in progress 5.5 Manufacturing accounts - calculate factory cost of production 5.5 Manufacturing accounts - prepare manufacturing accounts, income statements and statements of financial position 5.6 Incomplete records - explain the disadvantages of not maintaining a full set of accounting records 5.6 Incomplete records - prepare opening and closing statements of affairs 5.6 Incomplete records - calculate profit or loss for the year from changes in capital over time 5.6 Incomplete records - calculate sales, purchases, gross profit, trade receivables and trade payables and other figures from incomplete information 5.6 Incomplete records - prepare income statements and statements of financial position from incomplete records 5.6 Incomplete records - apply the techniques of mark-up, margin and inventory turnover to arrive at missing figures 6.1 Calculation and understanding of accounting ratios - Gross margin 6.1 Calculation and understanding of accounting ratios - Profit margin 6.1 Calculation and understanding of accounting ratios - Return on capital employed (ROCE) 6.1 Calculation and understanding of accounting ratios - Current ratio 6.1 Calculation and understanding of accounting ratios - Liquid (acid test) ratio 6.1 Calculation and understanding of accounting ratios - Rate of inventory turnover (times) 6.1 Calculation and understanding of accounting ratios - Trade receivables turnover (days) 6.1 Calculation and understanding of accounting ratios - Trade payables turnover (days) 6.2 Interpretation of accounting ratios - prepare and comment on simple statements showing comparison of results for different years 6.2 Interpretation of accounting ratios - make recommendations and suggestions for improving profitability and working capital 6.2 Interpretation of accounting ratios - understand the significance of the difference between the gross margin and the profit margin as an indicator of a business's efficiency 6.2 Interpretation of accounting ratios - explain the relationship of gross profit and profit for the year to the valuation of inventory, rate of inventory turnover, revenue, expenses, and equity 6.3 Inter-firm comparison - understand the problems of inter-firm comparison 6.3 Inter-firm comparison - apply accounting ratios to inter-firm comparison 6.4 Interested parties - owners 6.4 Interested parties - managers 6.4 Interested parties - trade payables 6.4 Interested parties - banks 6.4 Interested parties - investors 6.4 Interested parties - club members 6.4 Interested parties - other interested parties such as governments, tax authorities, etc. 6.5 Limitations of accounting statements - historic cost 6.5 Limitations of accounting statements - difficulties of definition 6.5 Limitations of accounting statements - non-financial aspects 7.1 Accounting principles - matching 7.1 Accounting principles - business entity 7.1 Accounting principles - consistency 7.1 Accounting principles - duality 7.1 Accounting principles - going concern 7.1 Accounting principles - materiality 7.1 Accounting principles - money measurement 7.1 Accounting principles - prudence 7.1 Accounting principles - realisation 7.2 Accounting policies - comparability 7.2 Accounting policies - relevance 7.2 Accounting policies - reliability 7.2 Accounting policies - understandability