MIDLANDS STATE UNIVERSITY
FACULTY OF COMMERCE
DEPARTMENT OF ACCOUNTING
COURSE TITLE: FINANCIAL ACCOUNTING FOR BUSINESS 1B (ACC 101)
1.0 Preamble
. This course is a comprehensive module, which requires careful and dedicated study.
This module serves as an introduction to more advanced accounting studies in Financial
Accounting 2A and 2B.
2.0 Prerequisite Module
Financial Accounting 1A
3.0 Aim
To develop knowledge and understanding of the underlying principles and concepts
relating to financial accounting and achieving technical proficiency in the use of doubleentry accounting techniques including the preparation of basic financial statements.
4.0 Module Objectives
By the end of the module the students should be able to;
. Explain the context and purpose of financial reporting
. Define qualitative characteristics of financial information and the fundamental bases of
accounting
. Explain the accounting concepts and conventions present in generally accepted
accounting principles
. Journalise transactions and events and post to the general ledger and close the books of
various enterprises
. Prepare financial statements for manufacturing enterprises, partnerships and limited
companies to comply with generally accepted practice
. Record the transactions of a business that has one or more branches and prepare its
financial statements.
5.0 Module Outline
A. Accounting Theory
. The objective of financial reporting
. Users and stakeholders’ needs
. The qualitative characteristics of financial reporting
. The main elements of financial reports
. The regulatory framework
. Accounting concepts and principles
. Capital and revenue expenditure.
B. Specialised Accounting Procedures
Departmental Accounts
. Preparation of departmental accounts using the net profit approach and the contribution
approach for enterprises involved in trading operations.
Manufacturing Accounts
. Preparation of a manufacturing account and trading account when goods are transferred
at cost or market price.
. The elimination of unrealised profit when closing stock exists for manufactured goods
transferred to trading account at market price
. General ledger accounts for: raw material control a/c, wages control a/c, manufacturing
overhead control a/c, Work in Progress Control a/c, Finished Goods Control a/c and Cost
of Sales a/c
. A balance sheet extract
Branch Accounts
. Accounting for branches which are independent and dependent
. Elimination of unrealised profit
. Making journal and ledger entries
. Final accounts
C. Preparing Basic Financial Statements
. Income Statement
. Statement of changes in equity
. Balance Sheet
. Notes to the financial statements
Partnerships
. Changes in a partnership, dissolution, insolvent partner and piece meal distribution
. Making journal and ledger entries
. Final Accounts
Limited Companies
. Record shares and debentures issued at par, at a premium and at a discount( n.b.
compliance with Companies Act Chapter )
. Forfeiture of shares
. Recording capital and revenue reserves
. Making journal, ledger and extracting a trial balance
. Final accounts
Cash flow statement
. Both the direct and indirect method should be understood for the different enterprises.
6.0 Approach to Examining the Syllabus
This module will be examined by way of course work which will be in the form of two in
class tests and an end of semester examination. All questions are compulsory.
. Coursework:
Weight
Test 1
15%
Test 2
15%
. End of semester examination
70%
100%
End of Semester Examination
Part Remarks
Number of Marks
A
B
C
10 multiple choice questions each carrying
2 marks covering the whole module.5 short theory
questions each carrying 2 marks
1 question either on: departmental accounts,
manufacturing accounts or branch accounts
The following topics will be tested: partnership,
limited companies and cash flow statement
30
20
50
100
Recommended Textbooks
1. Frank wood’s Business Accounting Volume 1& 2 by Frank wood and Alan
Sangster
2. Fundamental Accounting (4 th Edition) by Flynn et.al.
3. A Practical Foundation in Accounting (2 nd Edition) by Harry Johnson and
Austin Whittam
4. Business Accounts for bookkeeping and financial Accounting courses ( 3 rd
Edition) by David Cox
5. Preparing Financial Statements (International Edition) Paper 1.1- ACCA
6. Basic Financial Exercises (Intermediate Accounting) by Morris Pelkowitz
7. Accounting-an Introduction (6th Edition) by Faul et.al
8. Accounting 1- Accounting Concepts ACN 102- Unisa