PURPOSE OF ACCOUNTING

• What is Accounting, Book-Keeping, Transactions and an Account?
  
• Accounting concepts, cycles and equations
  
• Matching concepts in timing and operational control.
  
• Accounting standards in used.
  
• Main grouping of accounts
  
• Users and benefits of accounting information.

FAMILIARIZATION OF DAILY KEY ACCOUNTING TERMS

• Grouping of Accounts
  
• Distinction with examples between:
  i. Revenue, and
  ii. Capital expenditure
  
• Distinction with examples between:
  i. Non-Current, and
  ii. Current Assets
  
• Distinction with examples between:
  i. Non-Current Liabilities
  ii. Current Liabilities
  
• Know the real meaning of Property, Plant and Equipment
  
• Definition of Intangible assets and when can it arise
  
• What is Biological assets
  
• What is Right of use assets
  
• Depreciation, Amortization non-current (fixed) and intangible assets.
  
• Asset impairment.

DAILY TRANSACTIONS PROCESSING

• Transaction Processing Framework
  
• Transactional documentation processing for sales, purchase, sales and purchase returns.
  i. Document Matching,
  ii. What document to match?
  iii. Checking and approving,
  iv. Account coding, posting and following up trail

DOUBLE ENTRY ACCOUNTING SYSTEMS

• Roles and rules of double entry accounting system
  
• Chart of Accounts – Mother rule of all postings
  
• Various Books of Account – Gen. Ledger, Purchase Ledger, Sales Ledger, Journals, Cash Books, Petty Cash Book, Fixed Assets Register, etc.
  
• Accounting double entries for Assets, Liabilities, Revenue, Expenditure and Capital.
  
• Double entries for non-current (fixed) assets disposals
  
• Journal entries for correction of errors.
  
• Double entries for deemed supply treatment for Sales and Service Tax under:
  i. Payback of sales tax exemptions given earlier
  ii. Free goods and services
  iii. Service tax for Imported taxable services
  iv. Claiming service tax refund of digital tax incurred for resales.
  v. Bad debt recovery
  vi. Upon deregistration of taxable service provider
  vii. Withholding tax payment
  
• Calculation and double entries for Right of Use Assets and its double entries
  
• Double entries on Hire Purchase and its interest calculation under Rule 78 (Sum of Digit Method)

MONTH END CLOSING ADJUSTMENTS

• Journal Double entries for monthly adjustments such as prepayments, accruals and provisions for expenses and assets depreciation and amortizations
  
• Provisions for bad and doubtful debts, provision for stock obsolesces and provision (impairments).
  
• Extraction of Trial Balance and Financial Statements for financial performance analysis:
  i. Statement of Income (Profit and Loss Account)
  ii. Statement of Financial Position (Balance Sheet)
  iii. Statement of Cash flow.
  
• Cost of Sales calculation

End of Day 1

BANK AND PETTY CASH CONTROL SYSTEM

• Accounts that need to reconcile:
  i. Every Bank Account
  ii. Every intercompany and related companies account
  iii. Major Creditors account
  
• Process of preparing the reconciliation statement
  i. Identified the difference between your record of their accounts and their record of your accounts – their statement of account.
  ii. Investigate the cause of the difference and then:
  -- Adjust your records (books of account)
  -- Inform the other party to correct their account if it is their mistake.
  
• Bank Reconciliation:
  i. Work out the adjusted cash book balance first
  ii. Then reconcile the difference.
  iii. Starting point – can be from your adjusted cash book balance or from bank statement balance.
  
• Petty Cash Control:
  i. Imprest System management
  ii. Payment policy and procedures
  iii. Record maintenance
  iv. Reimbursement management
  v. Posting to General Ledger
  vi. Fraud and abuse control.

PREPARATION AND UNDERSTANDING OF FINANCIAL STATEMENTS

• Minimum information to be shown in the Financial Statement:
  i. Statement of Profit and Loss
  -- Expense classification – by function or by nature
  -- How to identify by a layman
  ii. Other Comprehensive Income
  iii. Statement of Financial Position
  -- Presentation – Current & Non-Current
  -- Treatment of major repair or part change
  -- Understand Biological Assets
  -- Understand what is Right of Use Assets (RUA) from operating lease
  -- Understand what is Deferred Tax
  iv. Statement of Cash Flow
  -- Presentation – Direct or Indirect
  -- How to identify.
  -- Breakdown into from Operating, Investing and Financing Activities
  v. Statement of Change in Equity.
  
• Various Qualitative information that needs to be shown in the Financial Statement
  
• Understand the different Audit Opinions

EVALUATION OF BUSINESS PERFORMANCE FROM FINANCIAL STATEMENTS

• Application of Accounting ratios:
  i. Profitability (returns on Sales, Assets Invested, Equity, Investments).
  ii. Liquidity
  iii. Actual meaning of over trading and its calculation
  iv. Efficiencies
  v. Stability
  
• Application of various cash ratios
  
• Limitation on the usage or ratios

BUDGETARY CONTROL – VARIANCE ANALYSIS BETWEEN ACTUAL AND BUDGET

• Detail Sales Variance analysis matrix
  i. Price
  ii. Volume – mixed and quantity
  
• Detail operating expenses analysis matrix
  
• Manufacturing material variance analysis
  i. Usage and Price
  ii. Mix and Yield
  
• Production Labour Variance analysis
  i. Hour usage
  ii. Rate
  iii. Idle time
  
• Overhead variance analysis
  i. Usage
  ii. Absorption
  
• Variance analysis contribution to business performance.
  
• Factors that give rise to variances

End of Course