Principles of Accounts Principles of Accounts 11

What is Principles of Accounts 1 Principles of Accounts 1 ?

The module covers: Bookkeeping

and Accounting

for Sole Traders

(and Partnerships ?)

What is Bookkeeping & Accounting Bookkeeping & Accounting ?

Bookkeeping– recording the

transactions of an organization

Accounting– analysis of the

performance of an organization

What is BookkeepingBookkeeping 1 ? You have £10. Your mother/father/aunt

gives you £100 because today is your birthday.

You go with your friends to celebrate your birthday.

You have £15 left after the celebration.

How much money did you spend?

In businesses, all of this would be recorded !

‘Books’ would be kept of all your (financial) activities !!

What is BookkeepingBookkeeping 2 ?

the keeping of Accounts the keeping of accounting

records Accounting records are kept

in ‘Books’ or ‘Ledgers’ In businesses all transactions

are recorded Book-keeping is simply

keeping the records of business transactions Records are kept of all

the (financial) activities

What is BookkeepingBookkeeping 3 ?

record important, useful information. the information must be recorded

accurately it is routine It is recording It is ‘accounting for’ business

transactions Examples of transactions: sale/purchase of goods/services every sale, etc., is shown

in moneyAccounts are kept of all the (financial) activities

Book-keeping is often known as ‘Double entry’

What is Accounting 1Accounting 1? Providing financial information

in an organization – objectively

– consistently

– professionally

– conservatively valued to enable management to

perform three functions

– recording

– analysis

– control

What is Accounting 2Accounting 2?

Using financial information to analyse the performance of management of (and inside ) an organization

– objectively

– consistently

– professionally

– with reliable techniques for internal management control

– and comparing overall performance of the organisation

– with (for example) other organizations

What is Accounting 3Accounting 3? Obtaining finance (capital) for

management of an organization

Forecasting management/departmental/ organizational performance

Checking actual performance against planned/forecasted performance

Auditing claims (claimed performance) of organizations

etc.

What is BookkeepingBookkeeping and and AccountingAccounting? Accounting is

– very business-like

– very professional

You must do/be the same

Keeping accounts: – keeps checks on customers and

suppliers

– leads to preparation of overall, summary statements

These Financial Statements are information to the business.

What is BookkeepingBookkeeping and and AccountingAccounting? We cannot keep Accounting records

– without documents (proof of transactions)

– sales, purchases, banking (payment and receipts) documents

these are source documents this documentary evidence:

– tells/shows us the actual transaction

– shows what has happened Accounting records:

– show the impact of these transactions on a business

– show what these transactions mean to a business

AdvantagesAdvantages of studying this subject

To be well-prepared for future career development

All managers need accounting

Easier to find a job All organizations need

accounting Closely related to daily life.

Possible Future CareerCareer Development 1

Pass the prof essional examswith Exemptions

University Graduates

Pass the prof essional examsN o exemptions

N on- University S tudent

A ccountant(A CCA / CI MA / CPA )

Possible Future CareerCareer Development 2

Pass other management examswith Exemptions

University Graduates

Pass other management examsNo exemptions

Non-University Student

Manager(Business, Public Sector, etc)

Exam (ModulesModules) to be completed in the three years

Semester One Semester Two

Principles of Accounts 1

Intro. to Cost and Management Accounting

Principles of Accounts 2

Management Accounting

Financial Reporting

Strategic Management Accounting

Criteria for studyingstudying and succeedingsucceeding in this subject

Diligent - hard work Sensitive to figures (not

necessarily good at Maths.)

Willing to learn Willing to think critically

Any QuestionsQuestions ?

Powerpoint presentation adapted by M C Pratt, St Martin’s College, from: Principles of Accounts (Career Talk) produced by the CNEC Christian College, May 2000.Web page: http://www.cneccc.edu.hk/subjects/poa/resources/Principles%20of%20Accounts%20(Career%20Talk).ppt