F3-00 Introduction - acca becker notes PDF

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ACCA FINANCIAL ACCOUNTING F3/FFA STUDY SYSTEM For Examinations to August 2015

Ali Niaz - [email protected]

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Ali Niaz - [email protected]

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Ali Niaz - [email protected]

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Ali Niaz - [email protected]

Paper F3/FFA

Contents Page

Introduction ...............................................................................................v About This Study System ............................................................................v Syllabus.....................................................................................................vi ACCA Study Guide..................................................................................... xii Examination Technique ........................................................................... xix Sessions 1

Context of Financial Reporting .............................................. 1-1

2

Financial Statements ............................................................ 2-1

3

Accounting Systems ............................................................. 3-1

4

Double-Entry Bookkeeping Principles ................................... 4-1

5

Ledger Accounts ................................................................... 5-1

6

Credit Transactions............................................................... 6-1

7

Trial Balance......................................................................... 7-1

8

Accruals and Prepayments.................................................... 8-1

9

Depreciation and Disposals................................................... 9-1

10

Receivables and Payables ....................................................10-1

11

Inventory ............................................................................11-1

12

Books of Prime Entry and Control Accounts .........................12-1

13

Control Account Reconciliations...........................................13-1

14

Bank Reconciliations ...........................................................14-1

15

Suspense Accounts ..............................................................15-1

16

Incomplete Records.............................................................16-1

17

Regulatory Framework ........................................................17-1

18

Conceptual Framework ........................................................18-1

19

IAS 1 Presentation of Financial Statements .........................19-1

20

Capital Structure and Finance Costs ....................................20-1

21

IAS 2 Inventories ................................................................21-1

© 2014 DeVry/Becker Educational Development Corp. All rights reserved.

Ali Niaz - [email protected]

iii

Contents

Sessions

iv

Page

22

IAS 18 Revenue ...................................................................22-1

23

IAS 16 Property, Plant and Equipment.................................23-1

24

IAS 38 Intangible Assets .....................................................24-1

25

IAS 37 Provisions, Contingent Liabilities and Contingent Assets................................................................25-1

26

IAS 10 Events After the Reporting Period ............................26-1

27

IAS 7 Statement of Cash Flows ............................................27-1

28

Consolidated Financial Statements ......................................28-1

29

Further Consolidation Adjustments......................................29-1

30

Interpretation of Financial Statements ................................30-1

31

Appendix—Extended Trial Balance .......................................31-1

32

Glossary ..............................................................................32-1

33

Index ..................................................................................33-1

© 2014 DeVry/Becker Educational Development Corp. All rights reserved.

Ali Niaz - [email protected]

Introduction

ABOUT THIS STUDY SYSTEM This Study System has been specifically written for the Association of Chartered Certified Accountants' Papers F3 Financial Accounting in the ACCA Qualification, and FFA Foundations of Financial Accounting of Foundations in Accounting. It provides comprehensive coverage of the core syllabus areas and is designed to be used both as a reference text and as an integral part of your studies to provide you with the knowledge, skill and confidence to succeed in your ACCA Examinations. About the author: Phil Bradbury is ATC International's lead tutor in international financial reporting and has more than 10 years' experience in delivering ACCA Exam-based training.

How to Use This Study System You should start by reading through the syllabus, study guide and approach to examining the syllabus provided in this introduction to familiarise yourself with the content of this paper. The sessions which follow include the following features: Focus

These are the learning outcomes relevant to the session, as published in the ACCA Study Guide.

Session Guidance

Tutor advice and strategies for approaching each session.

Visual Overview

A diagram of the concepts and the relationships addressed in each session.

Definitions

Termsaredefinedastheyareintroducedandlargergroupingsoftermswill be set forth in a Terminology section.

Illustrations

These are to be read as part of the text. Any solutions to numerical Illustrations are provided.

Exhibits

These extracts of external content are presented to reinforce concepts and should be read as part of the text.

Examples

These should be attempted using the pro forma solution provided (where applicable).

Key Points

Attention is drawn to fundamental rules, underlying concepts and principles.

Exam Advice

These tutor comments relate the content to relevance in the examination.

Commentaries

These provide additional information to reinforce content.

Session Summary

A summary of the main points of each session.

Session Quiz

These quick questions are designed to test your knowledge of the technical content. A reference to the answer is provided.

Study Question Bank

A link to recommended practice questions contained in the Study Question Bank. At a minimum, you should work through the priority questions after studying each session. For additional practice, you can attempt the remaining questions (where provided).

Example Solutions

Answers to the Examples are presented at the end of each session.

© 2014 DeVry/Becker Educational Development Corp. All rights reserved.

Ali Niaz - [email protected]

v

F3 Financial Accounting

Syllabus

SYLLABUS Aim To develop knowledge and understanding of the underlying principles and concepts relating to financial accounting and technical proficiency in the use of double-entry accounting techniques including the preparation of basic financial statements.

Main Capabilities On successful completion of this paper, candidates should be able to: A. Explainthecontextandpurposeoffinancialreporting B. Definethequalitativecharacteristicsoffinancialinformation C.

Demonstrate the use of double-entry accounting systems

D. Record transactions and events E.

Prepare a trial balance (including identifying and correcting errors)

F. Preparebasicfinancialstatementsforincorporatedandunincorporatedentities G. Preparesimpleconsolidatedfinancialstatements H. Interpretationoffinancialstatements.

Rationale The syllabus for Paper F3/FFA Foundations of Financial Accounting introduces the candidate to the fundamentals of the regulatory framework relating to accounts preparation and to the qualitative characteristics of useful financial information. The syllabus then covers drafting financial statements and the principles of accounts preparation. The syllabus then concentrates in-depth on recording, processing and reporting business transactions and events. The syllabus then covers the use of the trial balance and how to identify and correct errors, and then the preparation of financial statements for incorporated and unincorporated entities. The syllabus then moves in two directions: requiring candidates to be able to conduct a basic interpretation of financial statements and requiring the preparation of simple consolidated financial statements from the individual financial statements of group incorporated entities.

It is very deliberate that this Study System does not strictly follow the order of the syllabus. The sessions in the Study System have been ordered to follow a more logical sequence for study purposes. The "accounting" topics which are relevant to recording and maintaining day-to-day transactions in any entity are introduced before considering the "reporting" aspects specific to limited liability companies including the application of IFRS. Th...