ACC 12 TERM 1 WEEK 3 – 7 Financial accounting of companies – preparation of final accounts and financial statements

Financial accounting of companies – preparation of final accounts and financial statements

Preparation of final accounts and detailed financial statements of a
company taking into account yearend adjustments.
Year end adjustments:
• trading stock deficit/surplus
• consumable stores on hand
• depreciation (on cost price/straight line, on diminishing balance
methods)
• bad debts
• bad debts recovered (Including reciepts from solvent estates)
• correction of errors/omissions
• accrued income (receivable)
• income received in advance (deferred)
• expenses prepaid
• accrued expenses (payable)
• provision for bad debts
• adjustments related to income tax
• adjustments related to the payment and declaration of
dividends.
Final accounts:
• Trading account
• Profit and Loss account
• Appropriation account
Reversal of certain adjustments, i.e. accruals, income received in advance, and prepayments
Financial statements and notes:
• Income Statement
• Balance Sheet
• Cash Flow Statement
Analysis and indication of the effect of transactions on the
accounting equation of a company; all transactions affecting a
company up to financial statements
Integration of reporting and control of fixed assets
Integration of ethical considerations relating to companies – roles of
shareholders and directors, manipulation of share prices, corporate
governance, etc.
Integration of internal audit and control processes relating to
companies
Application of GAAP principles and IFRS