1. Books of Original Entry and Double-Entry
Subject content What students need to learn:
1.1 Accounting
concepts
a) The definition of the following accounting concepts:
● accruals
● business entity
● consistency
● going concern
● materiality
● prudence
● realisation.
1.2 The
accounting
equation
a) Definition of the accounting equation.
b) Use of the accounting equation.
1.3 Double-entry
bookkeeping
a) Recording of transactions by double-entry
b) Balance an account and bring down the balance.
c) Interpretation of an entry and an account.
d) Preparation of a trial balance from balances in a ledger
account at a given date:
● differentiate between a debit and credit balance
● differentiate between purchases and sales
transactions
● differentiate between cash and credit transactions
● differentiate between capital and revenue items.
Subject content What students need to learn:
e) Identification and correction of errors that do not affect the
trial balance. Errors to include:
● commission
● omission
● principle
● compensating
● original entry
● reversal.
f) Differences between nominal ledger and subsidiary ledgers.
The need for sub-divisions of the ledger.
g) Classification and treatment of expenditure and income for
capital and revenue.

4. Produce Financial Statements of a Sole Trader
Subject content What students need to learn:
4.1 Account for
depreciation
costs
a) Reasons for charging depreciation
b) Calculation of depreciation using the following methods:
● straight line
● reducing (diminishing) balance.
Students will not be expected to show the ledger entries for these.
c) Calculation of carrying value
4.2 Adjustments for
accruals and
prepayments
a) To make adjustments for accrued and prepaid expenses and
income in the income statement (statement of profit or loss)
and statement of financial position.
Students will not be expected to show the ledger entries for these.
4.3 Adjustments for
irrecoverable
debts
a) Adjustment of profit for the year for irrecoverable debts.
Students will not be expected to show the ledger entries for these.
b) Adjustment of trade receivables for irrecoverable debts.

4.4 Prepare the
financial
statements
a) Preparation of a full, or an extract of, income statement
(statement of profit or loss) for a sole trader from a given set
of data.
b) Preparation of a full, or an extract of, statement of
financial position for a sole trader from a given set of
data.

CONTENTS

1

2

1. Accounting concepts and framework
Subject content What students need to learn:
1.1 The financial
accounting
function
a) The differences between financial accounting and
management accounting.
b) The principles incorporated in the following accounting
standard:
● IAS 1 – presentation of financial statements.
c) The elements, nature and purpose of financial
statements, including:
● statement of profit or loss
● statement of changes in equity
● statement of financial position
● statement of cash flows.
d) The understanding and application of the following
accounting concepts:
● accruals
● business entity
● consistency
● going concern
● materiality
● prudence
● realisation.

e) Understanding the characteristics of financial reporting
under the International Accounting Standards Board (IASB)
framework, including:
● relevance
● faithful representation
● comparability
● verifiability
● timeliness
● understandability.
1.2 Types of
business
organisations
a) The purpose, advantages and disadvantages of
different types of businesses, including:
● sole trader
● partnership
● limited liability partnership
● private limited companies (Ltd)
● public limited companies (plc).

1.3 How financial
statements
contribute
towards meeting
the needs of
different
stakeholders and
users
a) An understanding of the main stakeholders in business and
reasons for their interests (needs) in financial statements.
Stakeholders to include:
● owners
● managers
● suppliers
● customers
● employees
● government
● investors
● providers of external finance
● competitors
● local community
● trade associations
● trade unions

1.4 Introduction to
ethical
behaviour in
accounting
practices
a) An understanding of the fundamental principles of
professional ethics, including:
● professional behaviour
● professional/technical competence and due care
● confidentiality
● integrity
● objectivity.
b) An understanding of the impact of professional ethics in
accounting roles and functions

3

3. Preparation of an extended trial balance
Subject content What students need to learn:
3.1 The
preparation of
the extended
trial balance
a) To process adjustments of trial balance figures at the
period end to prepare financial statements for business:
● inventory
● accrued and prepaid income and expenditure
● depreciation of non-current assets
● irrecoverable debts and allowance for doubtful debts
● correction of errors.
b) The extension of the ledger balance and adjustment column
into the statement of profit or loss and the statement of
financial position columns.
c) Calculate the profit or loss for the period from the
statement of profit or loss columns of the extended trial
balance

4

4.1 Partnerships a) The purpose of a partnership agreement.
b) The purpose and preparation of:
● current accounts
● capital accounts.
Including drawings for the partners in columnar format for
ledgers, and as a part of the statement of financial position.
c) The statement of profit or loss appropriation account,
including changes in partnership interests during the
year, including:
● interest on drawings
● interest on capitals
● partners’ salaries
● share of profits or losses.
d) The merger of sole traders to form a partnership.
e) The merger of partnerships, or conversion of a
partnership into a limited company or partnership
taken over by a limited company, including:
● purchase consideration
● accounting treatment – journal and ledger postings in
relation to realisation account
● distribution of proceeds between partners
● closure of ledger accounts relating to partners’ current and
capital accounts in partnership books on dissolution of
partnership.
f) Preparation of statements from given data set for
single entities and partnership
● statement of profit or loss
● statement of financial position
4.2 Limited                                                                                                                 
Liability
Companies
a) The differences between:
● redeemable and irredeemable shares
● rights issues and bonus issues
b) The preparation of financial statements (for external
use) with adjustments, including:
● statement of profit or loss
● statement of changes in equity
● statement of financial position
● statement of cash flows (IAS 7 format).

4.3 Accounting for
groups of
companies                                                                                                                    
a) The principles incorporated in the following accounting
standards:
● IFRS 3 – accounting for business combinations
● IAS 27 – consolidated financial statements.
b) The understanding of the following terms:
● parent
● subsidiary
● non-controlling interest
● goodwill
● fair values
● pre- and post-acquisition profits.
c) The calculation of goodwill arising on consolidation.
d) The calculation and treatment of pre- and
post-acquisition profits, including non-controlling interest.
e) Preparation of a consolidated statement of profit or loss with
one subsidiary (acquisition taking place at the beginning of
the financial year) (IFRS 10).
f) Preparation of a consolidated statement of financial position
with one subsidiary (acquisition taking place at the beginning
of the financial year) (IFRS 10).

5

5. Preparation of accounting from incomplete records
Subject content What students need to learn:
5.1 Preparation of
accounting
records from
incomplete
records
a) The use of accounting ratios to calculate revenue, cost of
purchases, inventory, gross profit and profit for the year
due to loss of records as a result of theft, fire or natural
disaster, including:
● gross profit as a percentage of revenue (margin)
● gross profit as a percentage of cost of sales (markup)
● profit for the year as a percentage of revenue
● opening and closing statement of affairs to calculate
capital or profit for the year.
b) The statement of profit or loss and statement of financial
position from incomplete records for different types of
businesses, including sole traders.

6

6.1 The
calculation and
interpretation
of accounting
ratios
a) The importance of measuring business performance and the
elements of business performance that can be measured by
the main financial statement used in business.
b) The calculation and use of the following ratios to
produce financial statements:
● gross profit percentage/margin
● profit for the year as a percentage of revenue
● current ratio
● quick ratio (acid test)
● return on capital employed (ROCE)
● trade receivables collection period
● trade payables payment period
● inventory turnover
● asset turnover.
c) The analysis of results obtained from different ratios to make
recommendations and decisions.

7

7. Budgetary control
Subject content What students need to learn:
7.1 Budgets a) The benefits and limitations of budgetary control
b) The preparation and interpretation of the following
budgets for a given period:
● cash budget
● inventory budget
● trade receivables budget
● trade payables budget.
c) The preparation and interpretation of the following
budgeted statements:
● statement of profit or loss
● statement of financial position.

8

8. Introduction to decision making
Subject content What students need to learn:
8.1 Short-term
decision
making
a) Benefits and limitations of marginal and absorption costing
b) The use of marginal costing for calculating:
● breakeven point, both in sales units and sales value
● profit or loss for a given number of units sold
● number of units required in order to generate targeted
profit
● the interpretation of the results obtained by using
marginal costing techniques and making
recommendations.
8.2 Long-term
decision
making
a) The characteristics, advantages and disadvantages of the
following methods of investment appraisal:
● payback period
● accounting rate of return
● net present value.
b) The calculation and interpretation of the results obtained
for different projects to make recommendations and
decisions by using the following methods:
● payback period
● accounting rate of return
● net present value.

9

CONTENTS

1

2

1. Accounting concepts and framework
Subject content What students need to learn:
1.1 The financial
accounting
function
a) The differences between financial accounting and
management accounting.
b) The principles incorporated in the following accounting
standard:
● IAS 1 – presentation of financial statements.
c) The elements, nature and purpose of financial
statements, including:
● statement of profit or loss
● statement of changes in equity
● statement of financial position
● statement of cash flows.
d) The understanding and application of the following
accounting concepts:
● accruals
● business entity
● consistency
● going concern
● materiality
● prudence
● realisation.

e) Understanding the characteristics of financial reporting
under the International Accounting Standards Board (IASB)
framework, including:
● relevance
● faithful representation
● comparability
● verifiability
● timeliness
● understandability.
1.2 Types of
business
organisations
a) The purpose, advantages and disadvantages of
different types of businesses, including:
● sole trader
● partnership
● limited liability partnership
● private limited companies (Ltd)
● public limited companies (plc).

1.3 How financial
statements
contribute
towards meeting
the needs of
different
stakeholders and
users
a) An understanding of the main stakeholders in business and
reasons for their interests (needs) in financial statements.
Stakeholders to include:
● owners
● managers
● suppliers
● customers
● employees
● government
● investors
● providers of external finance
● competitors
● local community
● trade associations
● trade unions

1.4 Introduction to
ethical
behaviour in
accounting
practices
a) An understanding of the fundamental principles of
professional ethics, including:
● professional behaviour
● professional/technical competence and due care
● confidentiality
● integrity
● objectivity.
b) An understanding of the impact of professional ethics in
accounting roles and functions

3

3. Preparation of an extended trial balance
Subject content What students need to learn:
3.1 The
preparation of
the extended
trial balance
a) To process adjustments of trial balance figures at the
period end to prepare financial statements for business:
● inventory
● accrued and prepaid income and expenditure
● depreciation of non-current assets
● irrecoverable debts and allowance for doubtful debts
● correction of errors.
b) The extension of the ledger balance and adjustment column
into the statement of profit or loss and the statement of
financial position columns.
c) Calculate the profit or loss for the period from the
statement of profit or loss columns of the extended trial
balance

4

4.1 Partnerships a) The purpose of a partnership agreement.
b) The purpose and preparation of:
● current accounts
● capital accounts.
Including drawings for the partners in columnar format for
ledgers, and as a part of the statement of financial position.
c) The statement of profit or loss appropriation account,
including changes in partnership interests during the
year, including:
● interest on drawings
● interest on capitals
● partners’ salaries
● share of profits or losses.
d) The merger of sole traders to form a partnership.
e) The merger of partnerships, or conversion of a
partnership into a limited company or partnership
taken over by a limited company, including:
● purchase consideration
● accounting treatment – journal and ledger postings in
relation to realisation account
● distribution of proceeds between partners
● closure of ledger accounts relating to partners’ current and
capital accounts in partnership books on dissolution of
partnership.
f) Preparation of statements from given data set for
single entities and partnership
● statement of profit or loss
● statement of financial position
4.2 Limited                                                                                                                 
Liability
Companies
a) The differences between:
● redeemable and irredeemable shares
● rights issues and bonus issues
b) The preparation of financial statements (for external
use) with adjustments, including:
● statement of profit or loss
● statement of changes in equity
● statement of financial position
● statement of cash flows (IAS 7 format).

4.3 Accounting for
groups of
companies                                                                                                                    
a) The principles incorporated in the following accounting
standards:
● IFRS 3 – accounting for business combinations
● IAS 27 – consolidated financial statements.
b) The understanding of the following terms:
● parent
● subsidiary
● non-controlling interest
● goodwill
● fair values
● pre- and post-acquisition profits.
c) The calculation of goodwill arising on consolidation.
d) The calculation and treatment of pre- and
post-acquisition profits, including non-controlling interest.
e) Preparation of a consolidated statement of profit or loss with
one subsidiary (acquisition taking place at the beginning of
the financial year) (IFRS 10).
f) Preparation of a consolidated statement of financial position
with one subsidiary (acquisition taking place at the beginning
of the financial year) (IFRS 10).

5

5. Preparation of accounting from incomplete records
Subject content What students need to learn:
5.1 Preparation of
accounting
records from
incomplete
records
a) The use of accounting ratios to calculate revenue, cost of
purchases, inventory, gross profit and profit for the year
due to loss of records as a result of theft, fire or natural
disaster, including:
● gross profit as a percentage of revenue (margin)
● gross profit as a percentage of cost of sales (markup)
● profit for the year as a percentage of revenue
● opening and closing statement of affairs to calculate
capital or profit for the year.
b) The statement of profit or loss and statement of financial
position from incomplete records for different types of
businesses, including sole traders.

6

6.1 The
calculation and
interpretation
of accounting
ratios
a) The importance of measuring business performance and the
elements of business performance that can be measured by
the main financial statement used in business.
b) The calculation and use of the following ratios to
produce financial statements:
● gross profit percentage/margin
● profit for the year as a percentage of revenue
● current ratio
● quick ratio (acid test)
● return on capital employed (ROCE)
● trade receivables collection period
● trade payables payment period
● inventory turnover
● asset turnover.
c) The analysis of results obtained from different ratios to make
recommendations and decisions.

7

7. Budgetary control
Subject content What students need to learn:
7.1 Budgets a) The benefits and limitations of budgetary control
b) The preparation and interpretation of the following
budgets for a given period:
● cash budget
● inventory budget
● trade receivables budget
● trade payables budget.
c) The preparation and interpretation of the following
budgeted statements:
● statement of profit or loss
● statement of financial position.

8

8. Introduction to decision making
Subject content What students need to learn:
8.1 Short-term
decision
making
a) Benefits and limitations of marginal and absorption costing
b) The use of marginal costing for calculating:
● breakeven point, both in sales units and sales value
● profit or loss for a given number of units sold
● number of units required in order to generate targeted
profit
● the interpretation of the results obtained by using
marginal costing techniques and making
recommendations.
8.2 Long-term
decision
making
a) The characteristics, advantages and disadvantages of the
following methods of investment appraisal:
● payback period
● accounting rate of return
● net present value.
b) The calculation and interpretation of the results obtained
for different projects to make recommendations and
decisions by using the following methods:
● payback period
● accounting rate of return
● net present value.

9