Financial Accounting notes – KNEC Diploma

Financial Accounting

• KNEC: Diploma in Business Management – Module I

• KNEC: Diploma in Human Resource Management – Module I

• KNEC: Diploma in Supply Chain Management – Module I

Topics covered in this subject as per the KNEC Syllabus are:

Topic 1: Introduction to Accounting
Topic 2: Accounting Concepts, Conventions and Bases
Topic 3: Source Documents
Topic 4: Books of Original Entry
Topic 5: The Ledger and the Trial Balance
Topic 6: Types of Errors and their Correction
Topic 7: Single entry and Incomplete Records
Topic 8: Final Accounts for Sole Proprietorship
Topic 9: Adjustments to Final Accounts
Topic 10: The Cashbook
Topic 11: Petty Cashbook
Topic 12: Bank Reconciliation Statements
Topic 13: Capital and Revenue Expenditure
Topic 14: Control Accounts
Topic 15: Accounting for Fixed Assets
Topic 16: Non-Profit Making Organizations
Topic 17: Emerging Trends and Issues in financial Accounting

Introduction
This unit is intended to equip the trainee with knowledge, skills and attitudes that will enable him/her to record financial information and prepare financial statements for an organisation

General Objectives
At the end of the unit, the trainee should be able to:

1. apply of accounting principles in business bookkeeping
2. record financial information of an organisation
3. detect and correct book keeping errors
4. prepare final accounts for an organisation

Topic 1: Introduction to Accounting

• Definition of terms used in accounting
• Users of accounting information
• Information needs
• Qualities of good accounting information
• Nature of accounting equation
• Effects of business transactions on balance sheet

Topic 2: Accounting Concepts, Conventions and Bases

• Definition of accounting Concepts, Conventions and Bases
• Types of accounting Concepts, Conventions and Bases

Topic 3: Source Documents

• Meaning of source documents
• Types of source documents
• Uses of source documents
• Relationship between Source documents and Books of Accounts

Topic 4: Books of Original Entry

• Definition of books of original entry
• Classification of Books of Original Entries
• Preparation of Books of Original Entries
• Posting transactions from the books of original entry to the ledger

Topic 5: The Ledger and the Trial Balance

• Definition of a Ledger and an Account
• Importance of a Ledger
• Relationship between a ledger and an account
• Classifications of ledgers
• Nature of double-entry system
• Definition of a Trial Balance
• Balancing off of accounts
• Extracting of a trial balance
• Importance of a trial balance

Topic 6: Types of Errors and their Correction

• Types of errors that do not affect the agreement of a trial balance
• Types of errors that affect the agreement of a trial balance
• Functions of suspense account
• Correction of errors using a Suspense Account

Topic 7: Single entry and Incomplete Records

• Explanation of terms
• Ascertainment of profits
• Conversion of single entry to double entry

Topic 8: Final Accounts for Sole-Proprietorship

• Definitions of final accounts
• Types of final accounts
• Preparation of final accounts

Topic 9: Adjustments to Final Accounts

• Meaning of final accounts
• Purpose of final accounts adjustments
• Procedure of making adjustments in final accounts

Topic 10: The Cashbook

• Definition of Cash book
• Types Cash book
• Types of discount
• Recording transactions in a cash book

Topic 11: Petty Cashbook

• Definition of petty cashbook
• Imprest System
• Purpose of Petty Cash
• Preparation of Petty Cash

Topic 12: Bank Reconciliation Statements

• Definition of bank reconciliation statements
• Purposes of preparing bank reconciliation statements
• Causes of the differences between bank statements and the cashbook balance
• Steps/procedure in preparing bank reconciliation statement

Topic 13: Capital and Revenue Expenditure

• Definition of Capital and Revenue Expenditure
• Double-entry system for revenue and capital expenditure
• Classification of Expenditure

Topic 14: Control Accounts

• Definition of control accounts
• Uses of control accounts
• Preparation of Control Account

Topic 15: Accounting for Fixed Assets

• Definition of depreciation
• Causes of depreciation
• Reasons for providing for depreciation
• Methods for providing for depreciation
• Double-entry for depreciation
• Accounting for disposal of fixed assets
• The fixed asset movement schedule

Topic 16: Non-Profit Making Organizations

• Definition of Non-profit making organization
• Differences between Receipts and Payment accounts
• Relationship between Income and Expenditure accounts
• Preparation of final accounts of Non-profit making organization

Topic 17: Emerging Issues and Trends in Financial Accounting

• Emerging issues and trends in financial Accounting
• Challenges posed by emerging issues and trends in financial Accounting
• Coping with the challenges posed by emerging issues and trends issues in financial Accounting