PRINCIPLES OF ACCOUNTING for CS, CCP and CICT

Principles of Accounting subject for certified secretaries(CS), Certified Credit Professionals(CCP) and Certified Investments and Financial Analysts(CIFA) is now available in softcopy and in hardcopy. These notes have been updated to reflect the recent KASNEB syllabus, they also have revision exercise at the end of every topic to ease your revision as you proceed to other topics. The topics covered are:-

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1. Introduction to Accounting

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

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

 3. 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
• 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

4. Correction of errors and suspense account
5. Financial statements of a sole trader

• Income statement
• Statement of financial position

6. Financial statements of a partnership

• Partnership agreement
• Distinction between current and fixed capital
• Income statement
• Statement of financial position

7. 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 -description of a complete set of published financial statements only

8. 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

9. Financial statements of a not-for-profit organisation

• Features
• Types of funds and their accounting treatment
• Income and expenditure account
• Statement of financial position

10. Group accounts (Removed from revised syllabus)
    

• Consolidated income statement and consolidated statement of financial position (simple group structures comprising a holding company and one subsidiary company and or one associate company)
• Consolidated statement of cash flow

5.11    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

12. Financial statements of public sector entities

• 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)

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