CPA Financial Accounting Study text Pdf notes
Topics covered
1. Introduction to Accounting
- Nature and Purpose of Accounting
- The objective of Financial Accounting
- The Elements of Financial Statements
- The Accounting Equation
- The Users of Accounting Information
2. The Accounting Process and Systems
- The Source documents such as receipts and invoices
- The Books of Prime entry/Original Entry from the journals, cashbooks, Petty cash books and registers
- The Ledger and the concept of double entry
- The Trial Balance
- The Financial Statements
3. Regulation and other principles guiding the accounting profession
- The legal sources of regulation
- The professional sources of regulation (local and international bodies) and ethical requirements
- Accounting Standards
- Common accounting principles/concepts
- Qualities of useful financial information
4. Accounting for Assets and Liabilities
- Property, Plant and Equipment (depreciation, acquisition, disposal, exchange, excluding revaluations)
- Intangible Assets
- Financial Assets and Financial Liabilities (Definition, Examples and Classification only)
- Inventory
- Cash in hand and cash at bank (bank reconciliation statements)
- Trade Receivables (Measurement and credit Losses)
- Trade payables
- Accrued Incomes/Expenses and Prepaid Incomes/Expenses
5. Financial Statements of a sole trader
- Statement of Profit or Loss
- Statement of Financial Position
6. Financial Statements of a partnership
- The partnership deed/agreement
- The statement of Profit or Loss and appropriation
- Partners’ capital and current accounts
- The statement of financial position
- Accounting treatment and presentation when there is a change in profit/loss sharing ratio, admission/retirement of a partner, dissolution of a partnership
7. Financial Statements of a company
- Important concepts of a company (Ordinary and Preference share capital, issuing new shares way of full market price, bonus shares and rights issue, Reserves, retained profits and corporation tax)
- Statement of Profit or Loss
- Other comprehensive incomes
- Statement of Financial Position
- Statement of Cash flows
8. Financial Statements of a manufacturing entity
- Manufacturing Statement of production
- Statement of Profit or Loss
- Statement of Financial Position
9. Statements of a not-for-profit entity
- Objectives of Not-for-profit organisations
- Statement of Income and Expenditure
- Statement of Financial Position
10. Correction of errors and preparing financial statements with incomplete records
- Types and causes of errors
- Correcting errors in source documents, the books of prime entry, the ledger, the trial balance and financial statements
- Reasons for incomplete information
- Preparation of financial statements from incomplete information
11. Analyzing Financial Statements
- The objective of analysing financial statements
- Analysing financial statements using financial ratios (Liquidity, Profitability, Solvency, Efficiency, Investor/Value and Cash Flow categories)
12. Accounting in the Public Sector
- Features of public sector entities (as compared to private sector)
- Structure of the public sector (National and county governments, State Corporations, Departments and Agencies)
- Regulation and oversight (International Public Sector Accounting Standards Board, Director of Accounting Services, National Treasury, Parliamentary Committees, Accounting Officers at national and county levels)
- Objectives of public sector financial statements and Standards (IPSAS)
- Accounting techniques in public sector such as budgeting, cash, accrual, commitment and fund accounting)