Financial Accounting KASNEB NOTES

Download Financial Accounting KASNEB Notes

KASNEB CPA FOUNDATION LEVEL

COURSE OUTLINE

GENERAL OBJECTIVE


This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to prepare financial statements for different entities.


LEARNING OUTCOMES


A candidate who passes this paper should be able to:
· Prepare books of original entry and basic ledger accounts under double entry
system
· Prepare basic financial statements of sole traders, partnerships, companies,
manufacturing entities and not for profit organisations
· Comply with the regulatory framework in the accounting field
· Account for assets and liabilities
· Analyse financial statements by use of ratios and statement of cash flows.

CONTENT


Introduction to accounting

  • The nature and purpose of accounting
  • Objectives of accounting
  • Users of accounting information and their respective needs
  • The accounting equation
  • Regulatory framework of accounting (regulatory bodies such as ICPAK, IFAC,
    IASB, IPSASB, IAESB)
  • Accounting standards (IASs/IFRSs) (importance and limitations)
  • Professional ethics
  • Accounting concepts/principles
  • Qualities of useful accounting information

Recording transactions

  • Source documents: quotations, purchase orders, statement of account,
    remittance advice, receipts, petty cash vouchers, sales and purchase invoice,
    credit notes and debit notes, bank statements
  • Books of original entry: sales journal, purchases journal, returns inwards journal,
    returns outward journal, cash book, petty cash book and general journal
  • Double entry and the ledger; use of T- accounts and double entry aspects (debit
    and credit), sales ledger and purchases ledger
  • The trial balance
  • Computerised accounting systems – role of computers, application and
    accounting softwares in the accounting process, benefits and challenges of
    operating computerised accounting systems


Accounting for assets and liabilities


Assets

  • Property, plant and equipment – recognition, capital and revenue
    expenditure, measurement (depreciation and revaluation), disposal and
    disclosures, property, plant and equipment schedule
  • Intangible assets – recognition, measurement (amortisation, impairment
    and revaluation), disposals and disclosures
  • Financial assets – examples and risks only
  • Inventory – recognition, measurement and valuation using specific cost
    method, FIFO and weighted average cost only
  • Trade receivables – bad debts and allowance for doubtful debts and
    receivables control accounts
  • Accrued income and prepaid expenses
  • Cash at bank – cash book and bank reconciliation statement
  • Cash in hand – cash book and petty cash books


 Liabilities

  • Bank overdraft – cash book and bank reconciliation statement
  • Trade payables – control accounts
  • Loans – accounting treatment of repayment of principal and interest
  • Prepaid incomes and accrued expenses


Correction of errors and suspense account
Financial statements of a sole trader

  • Income statement
  • Statement of financial position

Download Financial Accounting KASNEB Notes


Financial statements of a partnership

  • Partnership agreement
  • Introduction to partnership accounts
  • Distinction between current and fixed capital
  • Income statement
  • Statement of financial position
  • Changes in partnership – admission of a new partner, retirement, death and
    change in profit sharing ratio


 Financial statements of a company

  • Types of share capital – ordinary shares and preference shares
  • Issue of shares (exclude issue by instalment and forfeiture)
  • Types of reserves – share premium, revaluation reserve, general reserves and
    retained profits
  • Income tax – accounting treatment and presentation (exclude computation)
  • Financial statements – income statement and statement of financial position
  • Published financial statements (describe a complete set of published financial
    statements but not preparation)


Financial statements of a manufacturing entity

  • Features of a manufacturing entity
  • Classification and apportioning costs between manufacturing, selling and
    administration
  • Financial statements – manufacturing account, income statement and statement
    of financial position


Accounts from incomplete records

  • Features
  • Types of incomplete records(pure single entry, simple single entry, quasi single
    entry)
  • Ascertainment of profit by capital comparison
  • Preparation of statement of affairs and profit determination
  • Techniques of obtaining complete accounting information


Financial statements of a not for profit organisation

  • Distinction between not for profit making organisation and profit making
    organisation
  • Nature of receipts and payments account
  • Accounting treatment of some special items
  • Income and expenditure account
  • Statement of financial position

Analysing financial statements

  • Statement of cash flows (categories of cash, methods of preparing statement of
    cash flows and the importance)
  • Financial ratios – definition, categories, analysis and interpretation, application
    and limitations


Introduction to Public Sector Accounting

  • Features of public sector entities (as compared to private sector)
  • Structure of the public sector (National and county governments, state
    corporations and other agencies)
  • Regulatory structures and oversight [IPSASB, PSASB (establishment, mandate
    and functions), Director of Accounting Services, National Treasury, Parliamentary
    Committees, Accounting Officers at national and county levels]
  • Objectives of public sector financial statements
  • Objectives of IPSAS
  • Accounting techniques in public sector (budgeting, cash, accrual, commitment
    and fund)
    (Preparation of financial statements excluded)

Emerging issues and trends

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2 thoughts on “Financial Accounting KASNEB NOTES”

  1. This outline is very helpful,basing on the fact that I am soon starting the course at the foundation level. Keep up the good work,please

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