F011 - Principles of Accounting (Basics)

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The Role of Accounting

  • Explain the need to keep accounting records for both internal and external use.
  • Understand the role of the accountant in calculating profit and preparing financial statements and planning for decision making
1 of 5

The accounting equation

  • Define assets, capital and liabilities
2 of 5

Double Entry Bookkeeping

  • Prepare ledger accounts for assets and liabilities
  • Define purchases, sales, purchase returns and sales returns
  • Record transactions of goods
  • Distinguish between cash and credit transactions
  • Prepare ledger accounts for expenses and revenues
  • Define drawings and record in the ledger accounts
  • Balance ledger accounts (understand the importance of layout, underlining and use a ruler)
  • Discuss the usefulness of double-entry book-keeping in providing information necessary for the preparation of financial statements
3 of 5

Trial Balance

  • Explain the purpose of the Trial Balance in the preparation of the final accounts
  • Understand a Trial Balance and how it it made up (you will not need to prepare one)
4 of 5

Final Accounts - Sole Trader

  • Define cost of sales, gross profit and net profit
  • Preparation of the Income Statement (Trading and Profit and loss account)
  • Preparation of the Statement of Financial Position (Balance sheet)
5 of 5

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