A Level in Accounting

A Level Accounting

The process of accounting supports businesses in the measuring, monitoring and planning of their operations.

People skilled in accounting should be able to tell whether or not the business is performing well financially, the strengths and weaknesses of the business and to communicate their results to the owners of the business.

The process of Accounting is the practical ability to record, classify and summarise data and business related information. 

This course is designed to allow you to study at your own pace and is designed to develop an interest and understanding of accounting in the real world, both on a business and personal level.

An outline of what is offered in our A Level Accounting course:

AS Level

Unit 1: ACCN1 – Introduction to Financial Accounting
Written examination: 1 hour 30 minutes

Unit 2: ACCN2 – Financial and Management Accounting
Written examination: 1 hour 30 minutes

A2 Level

Unit 3: ACCN3 – Further Aspects of financial Accounting
Written examination: 2 hours

Unit 4: ACCN4 – Further Aspects of Management Accounting
Written examination: 2 hours

Unit 1: ACCN1 – Introduction to Financial Accounting

Module 1 Introduction to financial accounting

• A business / organisation and what its purpose is
• Presentation of a business / organisation’s financial information
• The fundamental accounting concepts which govern financial reporting
• Identification of a series of stakeholders to a company

Module 2 Recording financial data

• Business transactions and the duel effect of these transactions
• Recording entries in the Books of Prime Entry and the Memorandum ledgers
• Using this information to monitor trade receivables and trade payables
• Double Entry accounting and the "T-Account"
• Introduction to the accounting equation

Module 3 Checking accounting records

• Preparing a trial balance and ensuring it balances
• Reasons why a trial balance would not balance (summary of the various errors)
• The impact errors make on the profit/ (loss) and how these can be corrected
• Suspense account (neither balance sheet nor profit & loss)

Module 4 Balance Sheet and Profit & loss

• Familiarisation with profit and loss and balance sheet proformas
• Adjustments to trial balance (depreciation, bad debts, accruals and prepayments)
• Case study to prepare financial statements

Unit 2: ACCN2 – Financial and Management Accounting

Module 1 Business entity concept

• The 3 types of business entities
• Advantages and disadvantages of these organisational structures

Module 2 Accounting concepts

• Background to accounting concepts and the IASB’s framework
• Qualitative characteristics of financial information
• Cover the concepts relating to the qualitative characteristics (historic cost, going concern, accruals, consistency, prudence, materiality, realisation, business entity and objectivity)

Module 3 Further aspects of preparing primary accounts

• Advance look at balance sheet and profit & loss statements and adjustments.
• Specifically for bad debts and allowances for doubtful debts, income due and received in advance
• Depreciation of fixed assets; Reasons why a business needs to depreciate
• Introduction to new depreciation method – reducing balance – and comparison of the two methods
• Accounting for the disposal of fixed assets, incorporating accumulated depreciation account entries
• Capital vs. Revenue expenditure

Module 4 Limited Company accounts

• Assess Loan capital vs. Share capital as a source of finance - advantages and disadvantages
• Updating P&L and balance sheet with interim and final dividends; corporation tax liability; share premium; revaluation of fixed assets
• Understand what bonus issues / rights issues are and clearly identify the differences between them
• Make the necessary entries to the accounts for bonus and rights issues

Module 5 Ratio analysis and business performance

• Interpreting financial statements of sole traders and limited companies
• Comparing ratio analysis across competitors, across accounting periods and with other businesses
• Consider how various transactions effect ratios consider also the limitations of these ratios
• Understand that cash does not equal profits

Module 6 Ratio Introduction to budgeting

• Budgeting within business
• Importance of budgeting within an organisation
• Assumptions made in budgets and their weakness
• Preparing cash budgets

Module 7 ICT within accounting

• Learn how ICT helps with regard to double entry book keeping; maintaining and managing stock levels; monitoring debtors; preparing budgets
• Advantages / Disadvantages with ICT tool

Unit 3: ACCN3 – Further Aspects of financial Accounting

Module 1 Sources of Finance

• Reasons why a business would want to take out debt
• The different finance options available to businesses:
• Internal finance, shares, debentures, bank loans and overdrafts, and mortgages but excluding hire purchase or leasing as forms of finance

Module 2 Incomplete records

• Introduction to and preparation of a statement of affairs using all available information
• The business equation and how this can be used to calculate profit
• Use control accounts to identify missing sales / purchases figures
• Sales, cost of sales and gross profit relationship to calculate the missing figures (Mark up and Margins)
• Use information gathered to prepare the financial statements
• Understand the drawbacks of preparing accounts using incomplete records
• Comment on the accounts prepared

Module 3 Partnership Accounts

• Prepare year end partnership accounts
• Understand and comment on partnership accounts
• Understand and be able to prepare partner capital and current accounts
• Deal with retirement of partners / acceptance of new partners
• Account for new profit sharing ratios
• The process for admitting a partner, retirement of a partner and dissolution of a partnership Revaluing goodwill when the partnership changes
• Knowledge of the Partnership Act 1890 is essential

Module 4 Published accounts of Limited companies

• Published accounts: Why limited companies have to publish accounts, the stockholder’s interest in these published accounts and its corporate report and the limitations of the published accounts
• Prepare non-current asset schedules which agrees to the non-current assets on the face of the balance sheet
• Prepare a cash flow statement in line with IAS 7 (indirect method). Comment on the value of cash flow statements to stakeholders.
• Discover auditors and their responsibilities and role within an organisation
• The difference between auditors and directors duties with regard to the accounts

Module 5 Accounting standards

• Introduce students to the accounting standards applicable to this course
• Discuss the nature of the standards and how they relate to the qualitative characteristics of financial statements

Module 6 Stock valuation

• The concept of valuing stock
• The AVCO and FIFO method for valuing stock
• Explain how the different methods produce different profit figures

Unit 4: ACCN4 – Further Aspects of Management Accounting

Module 1 Manufacturing accounts

• Understand the manufacturing industry and prepare and interpret a set of manufacturing accounts
• Calculate prime costs, overhead costs, factory cost of finished goods, and profit on manufacture and make provisions for unrealized profit.

Module 2 Marginal, absorption and activity based costing

• Understand the terms used to track costs and perform basic calculations to produce this information. Terms include direct costs, indirect costs, variable costs, semi variable costs, fixed costs, marginal cost, contribution and break-even;
• Calculate break-even points and understand the limitations of use with break-even analysis
• Introduction to absorption costing, marginal costing and activity based costing. Interpretation and comparison of the three. Noting what a cost centre is and how this is used in the costing process
• Calculate profit based on absorption and marginal costing
• What is a service centre and how to absorb these costs into a product (using elimination method only)
• Explanation of what cost pools and cost drivers are
• Understand and calculate overhead absorption rates applying them over machine hours and labour hours
• Introduction to cost cards and how this can be used in pricing policy
• Decision making tools (make/buy, price setting, optimum use of resources, accept / decline additional work)

Module 3 Standard cost and variance analysis

• Interpret and comment on the system of standard costing
• Calculate sales volume and sales price; material usage and material price; labour efficiency and labour rate
• Understand the correlation between variances
• Prepare a budget vs. actual report

Module 4 Capital Investment Appraisal

• Investment decisions are inherently based on assumptions and these must be appreciated as a limitation to the investment appraisal tool
• Introduction to payback periods and net present values
• Students will be introduced to discounted cash flows at this stage
• Make recommendations to management as to which project to use, this should be based on calculations and financial analysis already performed

Module 5 Budgeting: Further considerations

• Reasons why we budget and how we use this information within the business
• Understand and interpret purchases, sales, production, labour, debtor and creditor budgets and how these relate to the main budget summary
• Prepare and comment on forecast operating statements and balance sheets

Module 6 Social accounting

• Discussion on corporate social responsibility, other factors beyond mere numbers which affect a business decision making

.Students are required to arrange and pay for their examinations and manage the course work element if the subject requires this. Students must check the relevant examination board website for further information and final examination sitting dates for the specification