Survey on Business, Accounting and Financial Studies(BAFS)Senior Secondary Schools F4-F6

Interpretation of Introduction to Accounting

By Eric, TAI Ming-kee

Recording, classifying, summarising and communicating data

Recording, classifying, summarising and communicating data

Users of accounting information (owners, managers, potential investors, bank, suppliers and government)

Uses of financial statements (show financial performance of business, provide useful and relevant information)

Limitations of financial statements (show quantitative information and past record only)

Business entity : Legal entity versus accounting entity Accrual : Cash basis versus accrual basis Historical cost : Open market value and net realizable

value Going concern : Relationship between historical cost

and going concern Consistency : Accounting bases versus accounting

policies

GAAP in accounting module

1. Money measurement

2. Prudence

3. Materiality

4. Realisation

5. Matching

6. Objectivity

7. Timeliness

8. Substance over form

AL Syllabus

• Stable monetary unit

• Uniformity

• Disclosure

• Relevance

• True and fair view

Double entry system

• Basic accounting elements (assets, liabilities, capital, income and expenses)

• Relationship between accounting elements and accounting equationAssets = Capital + LiabilitiesAssets + Expenses = Capital + Liabilities + Income

• Effects of business transactions upon the accounting equation and balance sheet

• Debits and credits and their rules

Books of original entry and different types of ledgers

• The needs of books original entries (recording, classifying and summarising various business documents)

• Recording transactions by double entries using ‘T’ form and running balances and explaining the different nature of debit and credit balances

• Classification of ledgers (personal, real and nominal accounts)

• Division of ledgers (post to sales ledger, purchases ledger and general ledger)

• Explain how the books of original entries are related to the double entry system

Identify errors, provide information for preparing financial statements

Errors affecting or not affecting the balancing of a trial balance

Relationship between trial balance and accounting equation

Strategy to calculate the cost of goods sold

Balance sheet classifications: order of permanence and liquidity, current and non-current distinction

Current and non-current distinction

Current and non-current distinction

Assessment of financial performance and position

Making comparisons: Internal versus External, Relative versus Absolute

Accounting Module

1. Inventory turnover

2. Days’ sales in accounts receivable/Accounts receivable turnover

3. Days’ purchases in accounts payable/Accounts payable turnover

4. Total assets turnover

5. Gearing

6. Earnings per share

7. Price earnings ratio

8. Dividend cover

1. Changing mode of assessment

Paper 1 (Compulsory part)

Time allowed: 1.25 hours

Question types:

a) Multiple-choice questions (some will be set on cases and data responses and carry a heavier weighting)

b) Short-answer questions

Multiple choice• A growing practice of examining boards is to set

multiple choice questions in accounting. In fact, this has become so popular with examiners that all the largest professional accounting bodies now use them, particularly n their first level examinations

• Multiple choice questions give an examiner the opportunity to cover large parts of the syllabus briefly, but in detail. Students who omit to study areas of the syllabus will be caught out by an examiner’s use of multiple choice questions. It is no longer possible to say that it is highly probable a certain topic will not be tested – the examiner can easily cover it with a multiple choice question.

CE 2006 Section A Question 3

CE 2005 Section A Question 2

2. Teaching arrangements

The End