ACC 12 TERM 1 WEEK 1 – 2 Companies: unique transactions

Financial accounting of companies – concepts and unique ledger accounts

Definition and explanation of accounting concepts unique to
companies:
• companies – public and private
• Companies Act
• Registrar of Companies – Registration certificate
• Memorandum of Incorporation
• income tax/provisional income tax
• dividends
• shares
• issue price
• earnings
• shareholders
• directors
• auditors
• limited liability
• separation of ownership from control
• retained income
• authorised share capital
• issued share capital
• Johannesburg Securities Exchange (JSE)

GAAP principles

Definition and explanation of International Financial Reporting
Standards (IFRS) and Generally Accepted Accounting Practice
(GAAP)
Definition and explanation of the following specific GAAP principles:
• historical cost
• prudence
• materiality
• business entity rule
• going concern
• matching

Bookkeeping of companies

Accounting cycle for a company:
• journals
• ledger accounts
• Trial Balance
Transactions include:
• issuing of shares at issue price (note that par value and share
premium no longer exist in terms of the Companies Act)
• buying back of shares
• loans and interest (note: interest on a mortgage loan is
capitalised)
• income tax
• dividends
• directors’ fees
• audit fees.