Islamic University of Gaza
Accounting Principles (2) ACTE 1302
Faculty of Commerce
Second Semester 2015/2016
Accounting Department
Prof. Salem A Helles
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Learning Objectives and Course Contents:
At the end of the semester, students should be able to understand the theoretical and practical
aspects of the following topics and achieve the following objectives:
1. Be able to understand and record the various end-of-period adjustments relating to a
business entity in accordance with the requirements of the relevant International
Financial Reporting Standards (IFRS). This will cover the following:
a. Distinguish between expenditure that is capital in nature and that which is revenue
expenditure
b. Understanding the reasons for adjusting entries.
c. Write off of bad debts and allowances for doubtful debts.
d. Accounting for accruals and prepayments in respect of expenses and revenues.
e. Depreciation and Depreciation Accounting.
2. Be able to understand the need for inventory valuation at the end of the accounting period
and understanding the importance and the methods of inventory valuation based on IAS
No. 2 Inventory Valuation.
3. Understand the need for Bank Reconciliation Statement and the preparation of the
necessary adjusting entries to account for discrepancies between the Bank Statement and
the Cash Book.
4. Understand the benefits of using control accounts and the process involved in both
preparing control accounts and reconciling them to ledgers.
5. Be able to raise the necessary journal entries to correct both errors that are revealed by
the trial balance and errors which cause differences in the double entry, including the
preparation of the Suspense Account.
6. Be able to prepare the Statement of Cash Flows in accordance with the relevant IAS and
understand its purpose.
7. Understand single entry and incomplete records and determining the various figures
needed for the preparation of the financial statements, including the move to proper
double entry system.
Schedule
Week No. 1
Week No. 2
Week No. 3
&4
Details
Introduction to end-of-period adjustments
Understanding the difference between capital expenditure and revenue
expenditure.
Adjusting entries at End of Financial Period
a. Write off of bad debts.
b. Allowances for doubtful debts.
c. Methods of calculating provision for doubtful debts.
d. Impact on Income Statement and balance sheet disclosure.
Depreciation Accounting according to IFRS No. 16: Property, Plant, and
Equipment
a. Explain the concept of depreciation.
Week No. 5
&6
Week No. 7
Week No. 8
Week No. 9
Week No. 10
Week No. 11
Week No. 12
& 13
Week No. 14
Week No. 15
b. Compute periodic depreciation using different methods.
c. Accounting entries relating to depreciation.
d. Disposal of plant assets.
Inventories according to IAS No. 2, Inventories
a. Describe the steps in determining inventory quantities.
b. Explain the accounting for inventories and apply the inventory cost flow
methods.
c. Explain the lower-of-cost-or-market basis of accounting for inventories.
d. Indicate the effects of inventory errors on the financial statements.
Bank Reconciliation Statement
a. Understanding the reasons for the discrepancies between the cash book
and the bank statement.
b. Preparation of the necessary adjusting entries resulting from the bank
reconciliation statement.
Control accounts
a. Explain why control accounts can be useful.
b. Reconcile the Purchase ledger and the Sales ledger with their respective
control accounts.
Mid- term Exam
General Revision
Correction of errors:
a. Preparation of correcting entries in respect of errors not revealed by the
trial balance; and
b. Correction of errors affecting double entry and use of the suspense
accounts.
Single Entry and Incomplete Records
a. Preparation of financial statements from incomplete records.
b. Moving from single entry to double entry.
Adjustments for Financial Statements
a. Adjusting entries for accruals in respect of expenses and revenues; and
b. Adjusting entries for prepayments in respect of expenses and revenues.
Non- profit- oriented organizations
a. Prepare receipts and payments accounts.
b. Prepare statement of financial position for Non- profit- oriented
organizations.
Statement of Cash Flows according to IFRS No. 7
a. Understanding of cash flows.
b. Classification of cash flows: operating, investing and financing activities.
c. Purpose of the Statement of cash flows.
d. Preparation of the Statement of cash flows.
Final Exam
Week No. 16
Text Book
Frank Wood and Alan Sangster (2012), Business Accounting I, Part II, 12 Edition, prentice
Hall.
Examinations and Marks
Mid-Term Exam: 30 Marks, Final Exam: 60 Marks, Course work: 10 Marks