ARE 126 Course outline.pdfARE 126 Course outline.pdf

MOI UNIVERSITY

SCHOOL OF BUSINESS AND ECONOMICS

DEPARTMENT OF AGRICULTURAL ECONOMICS AND RESOURCE MANAGEMENT

ARE 126: FINANCIAL ACCOUNTING                  Lecturer: Wilfrey V. Siahi

Email: wilfrey89@gmail.com                                     Mobile; 0710555028

COURSE OUTLINE

1.      Introduction to Financial Accounting.

1.1  Meaning of Accounting, Book Keeping, Financial Accounting and Management Accounting.

1.2  Objectives of Financial Reporting; Users of Financial Reports and their information needs.

1.3  Limitations of Financial Accounting Reports.

2.      Forms of Business Organizations

2.1  Sole proprietorship

2.2  Partnership

2.3  Companies

3.      Accounting Equation

3.1  Basis of the Equation

3.2  Business Transactions

4.      Basic Book Keeping Equation

4.1  Books of Original entry

4.2  Ledger: Posting transactions and extracting trial balance.

4.3  Role of Trial Balance

5.      Basic Final Accounts

5.1  Profit and Loss accounts

5.2  Balance Sheet

6.      Accounting for Depreciation

6.1  Definition of Depreciation

6.2  Reasons for providing for Depreciation.

6.3  Causes of Depreciation

6.4  Methods of Accounting for Depreciation.

6.5  Methods of Charging depreciation concept and evaluation.

6.6  Disposal of Noncurrent Assets.

7.      Year End Adjustments

7.1  Need for year-end Adjustments

7.2  Adjustment of; Provisions, Accruals, provision for bad debts and Prepayments.

7.3  Accounting treatment of final accounts.

8.      Cash Book

8.1  Meaning and Purpose

8.2  One Column, Two Column and Three Column Cash Book

8.3  Imperest System of Cash book

i)                    Meaning, advantages and preparation.

ii)                  Petty Cash Book and Imperest system.

9.      Partnership Accounts

9.1  Partnership agreements.

9.2  Rules of Partnership Act Cap 29

9.3  Final Accounts of Partnership

i)                    Current accounts

ii)                  Capital Accounts

iii)                Appropriation ‘Accounts

iv)                Profit and Loss Accounts

v)                  Profit and loss accounts, appropriation accounts and balance sheet.

10.  Company Accounts

10.1          Definition of company

10.2          Disclosures in accounts

10.3          Final accounts formats.

10.4          Profit and loss accounts, appropriation accounts and balance sheet

11.  Farm Accounts

11.1          Methods of Farm Accounts

11.2          Advantages of Farm Accounts

11.3          Final Accounts of farming enterprise

11.4          Provision of IAS 41 – Agriculture

12.  Ratio Analysis

12.1          Activity Ratios

12.2          Profitability ratios

12.3          Solvency Ratios.

12.4          Uses and limitations of Ratio Analysis

13.  Cash flow statements

13.1          Meaning of cash flow statement

13.2          Difference between profit and cash

13.3          Provision of IAS7 – Cash Flow statement

13.4          Preparation:

i)                    Direct Method

ii)                  Indirect Method

 

Teaching Methods

1.      Lectures

2.      Discussions and presentations

Evaluation

Type

Weighting

Continuous Assessment

30 %

Examination

70 %

Total

100 %

 

Course Texts

1)      Farea A. J. (1980).  Practical Bookkeeping and Accounts, 17th ed.  London: University Tutorial press.

2)      Knapp Mc (1996).  Financial Accounting: A focus on decision making.  Minneapolis/Saint Paul: West Publishing Co.

3)      Meigs, W. B. and Meigs, R. B. (1996). Accounting: the Basis for Business Decisions, (10th edition).  London: McGraw-Hill.

4)      Wood, F.  (1996). Business Accounting I, (7th edition).  London: Pitman.

5)      Short, D.G. (1993).  Fundamentals of Accounting, (7th edition). Boston: Irwin.