CPA Financial Accounting Pdf Study text notes

Financial Accounting - CPA PDF Study text notes


CONTENT

  1. Introduction to Accounting
  • The nature and purpose of accounting
  • Objectives of accounting
  • Users of accounting information and their respective needs
  • The accounting equation
  • Reguratory framework of accounting (regulatory bodies such as ICPAK, IFAC, IASB, IPSAB
  • Accounting standards (IAS/IFRS), (Importance and limitations)
  • Professional ethics
  • Accounting concepts/principles
  • Qualities of useful accounting information

2          Recording transactions

  • Source documents (quotations_ purchases order, statement of account. remittance advice, receipts, petty cash vouchers_ sales arid purchase invoices, credit notes and debit notes, bank statements)
  • Books of original entry: sales journal, purchases journal, returns inward, returns outward journal, cashbook, petty cashbook and general journal
  • Double entry and the ledger; general ledger, sales ledger, purchases ledger
  • The trial balance
  • Computerised accounting systems- Role of computers, application and accounting softwares in the accounting process, benefits and challenges of operating computerised accounting systems

 

  1. Accounting for assets and liabilities

3.1 Assets

  • Property, plant and equipment — recognition, capital and revenue expenditure, measurement (depreciation and revaluation), disposal and disclosures — property, plant and equipment schedule
  • Intangible assets — recognition, measurement (amortisation, impairment and revaluation), disposals and disclosures
  • Financial assets- examples and risks only
  • Inventory – recognition, measurement and valuation using specific. cost method (FIFO and weighted average cost)
  • Trade receivables – bad debts and allowance for doubtful debts and receivables control accounts
  • Accrued income and prepaid expenses
  • Cash at bank — cashbook and bank reconciliation statement
  • Cash in hand – cash book and petty cash book

3.2 Liabilities

  • Bank overdraft – cash book and bank reconciliation
  • Trade payables – payables control accounts
  • Loans – accounting treatment of repayment of principal and interest
  • Prepaid income and accrued expenses
  1. Correction of errors and suspense account
  2. Financial statements of a sole trader
  • Income statement
  • Statement of financial position
  1. Financial statements of a partnership
  • Partnership agreement
  • Introduction to Partnership accounts
  • Distinction between current and fixed capital
  • Income statement
  • Statement of financial position
  • Changes in partnership – Admission of a new partner, retirement and change in profit sharing ratio
  1. Financial statements of a company

  • Types of share capital – ordinary shares and preference shares
  • Issue of shares (exclude issue by instalment and forfeiture)
  • Types of reserves share premium, revaluation reserve, general reserves and retained profits
  • Income tax -Accounting treatment and presentation (exclude computation)
  • Financial statements – Income statement and statement of financial position
  • Published financial statements (describe a complete set of published financial statements but not preparation)
  1. Financial statements of a manufacturing entity
  • Features of a manufacturing entity
  • Classification and apportioning costs between manufacturing and selling and administration
  • Financial statements – manufacturing account, income statement and statement of financial position
  1. Accounts from incomplete records
  • Features
  • Types of incomplete records (Pure single entry, simple single entry, quasi single entry)
  • Ascertaining of profit by capital comparison
  • Preparation of statement of affairs and profit determination
  • Techniques of obtaining complete accounting information
  1. Financial statements of a not-for-profit organisation
  • Distinction between not for profit making organisation and profit making organisation
  • Nature of receipts and payments accounts
  • Accounting treatment of some special items
  • Income and expenditure account
  • Statement of financial position
  1. Analysing financial statements
  • Statement of cash flows (categories of cash, methods of preparing statement of cash flows and the importance)
  • Financial ratios — definition, categories, analysis and interpretation, application and limitations
  1. Introduction to public sector Accounting
  • Features of public sector entities (as compared to private sector)
  • Structure of the public sector (National and county governments: state corporations and other agencies)
  • Regulatory structures and oversight [IPSASB, PSASB (establishment, mandate and functions), Director of Accounting Services, National Treasury, Parliamentary Committees. Accounting Officers at national and county levels]
  • Objectives of public sector financial statements
  • Objectives of IFSAS
  • Accounting techniques in public sector (budgeting, cash, accrual: commitment and fund)

(Preparation of financial statements should be excluded)

  1. Emerging issues and trends

 

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