Prescription: AA600 Applied Accounting

Aim of Module	To provide students with the necessary knowledge and skills to enable them to function effectively in association with financial specialists at middle management level.
Credits	7
Knowledge Assumed From	AA100 Applied Accounting
Student Learning hours	70
Content Revised	pre 1996
Prescription Expiry Date	Nov 2007

Level and Assessment Schedule
Topics	Highest Skill Level	Suggested Assessment Percentage
1 Financial Accounting	A	50
2 Financial Reporting	A	30
3 Analysis & Interpretation	A	10
4 Budgeting	A	10
		100

The Student Will

1	Financial Accounting

C	1.1	Concepts and Principles
		Describe and comment on the following:
		-accounting entity
		-the monetary unit
		-consistency
		-disclosure
		-conservatism
		-matching concept
		-objectivity/materiality
		-going concern
		-historical cost
C	1.2	Legal entities
		Explain the accounting requirements of the main types of organisations:
		-sole traders (capital, drawings)
		-partnerships (capital, share of income, drawings)
		-companies (capital, reserves, dividends, accounts of shareholders)
		-non-profit organisations (accumulated funds, income and expenditure)
C	1.3	Capital and Revenue
		-Differentiate between capital and revenue receipts and payments, and reserves.
		-Explain the significance of preservation of capital.
		-Explain the significance of this for tax.
C	1.4	Inventory
		-Explain the need to control inventories.
		-Describe the generally accepted methods of inventory valuation.
C	1.5	Fixed Assets
		-Define a fixed asset.
		-Explain the need to control fixed assets.
		-Explain the term book value.
		-Compare different fixed asset valuation methods.
		-Explain the role of an asset revaluation account.
		-Define depreciation.
		-Describe the generally accepted methods of calculating depreciation.
A	1.6	Accounting process
		-List all the steps in the accounting cycle.
		-Process all types of financial accounting entries.
		-Post entries to the general ledger.
		-Prepare a trial balance.
A	1.7	Balance day adjustments
		-Define and give examples of accruals and prepayments.
		-Post adjusting general journal entries, e.g. depreciation, inventory adjustments, provision for doubtful debtors.
		-Prepare an adjusted trial balance.

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2	Financial Reporting

A	2.1	Statement of Financial Position
		-Classify accounts into suitable categories within a Statement of Financial Position (balance sheet) for a public company.
		-Explain the distinction between capital and revenue reserves.
		-Prepare a Statement of Financial Position (balance sheet) from a given adjusted trial balance for a public company.
A	2.2	Revenue Statements
		-Classify accounts within a revenue statement for a public company.
		-Prepare a revenue statement for a public company from a given adjusted trial balance for a public company.
A	2.3	Statement of Cash Flow
		-Explain the function of the Cash Flow/Funds Statement.
		-Prepare a simple Cash Flow/Funds Statements.

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3	Analysis & Interpretation

A	3.1	Compute ratios and percentages in order to assess and comment on the liquidity, profitability and stability of a public company.

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4

Budgeting

A	4.1	Explain the overall objectives of preparing budgets.
		-Demonstrate the use of budgets as control devices.
		-Explain the problems associated with budget preparation.
		-Explain how a firm's budget is constructed from various sources, and be able to prepare a simple budget.
		-Prepare a simple cash flow forecast.

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