Acca Fa Financial Accounting

Tags: ACCA

Pathway to passing ACCA FA/FFA exam; financial accounting basics under IFRS

Last updated 2022-01-10 | 4.6

- Why and for whom the businesses prepare financial statements
- What are the qualitative characteristics of financial information
- How to use the double-entry and accounting systems

What you'll learn

Why and for whom the businesses prepare financial statements

What are the qualitative characteristics of financial information

How to use the double-entry and accounting systems

How to record transactions and events in the books

How to prepare a trial balance (including identifying and correcting errors)

How to prepare basic financial statements for incorporated and unincorporated entities

How to prepare simple consolidated financial statements

How to give interpretation of financial statements

* Requirements

* None
* Not necessary
* but it is highly recommended that in part E you use Microsoft Excel for the practice tasks. Alternatively
* it is still fine to do them with pen and paper.

Description

The course is based on the ACCA Financial Accounting (FA/FFA) official syllabus, which is one of the top standards in the accounting industry since ACCA aims to ensure that its qualifications are recognised and valued by governments and regulatory authorities and employers across all sectors. ACCA qualifications have even been recognised on the educational frameworks in several countries.

FA/FFA is a foundation level paper in ACCA qualification followed by Financial Reporting (FR) and Strategic Business Reporting (SBR)

All the lectures are referenced to and mostly follow the order of the FA/FFA syllabus to help you navigate through the course. Also, you may easily find quizzes relevant to each section of the syllabus.

The course aims to enable you to record most of the transactions and events of a simple business, to prepare and give basic interpretation of the financial statements, and also to produce simple consolidated financial statements. International Financial Reporting Standards (IFRS) are used as an accounting and reporting framework in FA/FFA paper and in this course.

If you are a beginner, it is highly recommended to follow the lectures in the order as they are presented in the course. If you are familiar with the syllabus and simply want to revise a few topics, I would recommend to start from the beginning of each subsection (e.g. C2, D1, E5, etc.) because the examples used in one subsection may sometimes follow through several lectures.

The mix of lectures, short practice questions, and tutor support throughout the course guarantees you the opportunity to master all the basic accounting skills and also get ready for your ACCA FA/FFA exam.

Who this course is for:

ACCA students seeking to pass the FA exam from the first attempt
Anyone with zero previous experience who wants to learn the basics of financial accounting
University students studying accounting seeking clear and concise explanations

Course content

10 sections • 156 lectures

Introduction 1 lectures

Introduction Preview 02:36

A. The Context and Purpose of Financial Reporting 17 lectures

A1 a. Defining financial reporting Preview 03:20

A1 b. Types of business entity: sole trader, partnership, company Preview 01:48

A1 c. Legal differences between a sole trader, partnership and a company Preview 09:27

A1 d. Advantages and disadvantages of a sole trader, partnership, company Preview 03:31

A1 e. Nature, principles and scope of financial reporting Preview 03:01

A1 Quiz. The scope and purpose of financial statements for external reporting

A2 a. Users of financial statements and their needs Preview 04:14

A2 Quiz: Users of financial statements and their needs

A3 a. Purpose of each of the main financial statements Preview 03:58

A3 a. Examples of the main forms of financial statements Preview 02:19

A3 b. Defining assets, liabilities, equity, revenue and expenses Preview 05:50

A3 Quiz. The main elements of financial reports

A4 a. The roles of IFRSF, IASB, IFRS AC and IFRIC Preview 05:43

A4 b. The role of IFRSs Preview 02:44

A4 Quiz. The role of regulatory framework

A5 a,b The duties and responsibilities of those charged with governance Preview 06:31

A5 Quiz. The duties and responsibilities of those charged with governance

B. The Qualitative Characteristics of Financial Information 5 lectures

B1 a.b. Relevance and materiality Preview 07:42

B1 a.b. Faithful representation Preview 02:30

B1 a.b. Prudence, comparability, verifiability, timeliness, understandability Preview 06:03

B1 b. Substance over form, going concern, business entity, accruals Preview 05:14

B1 Quiz. The qualitative characteristics of financial information

C. The Use of Double-entry and Accounting systems 10 lectures

C1 d. The accounting equation Preview 01:50

C1 c.f. The concept of double-entry accounting and the duality concept Preview 04:05

C1 d.e. Reporting financial performance from period to period Preview 02:12

C2 b.d. Ledger accounts: posting journal entries, balancing and closing Preview 06:14

C1 d. Ledger accounts and the accounting equation Preview 03:55

C2 b. Ledger accounts and day books Preview 01:42

C1 a.b. Main data sources in an accounting system Preview 06:36

C1 Quiz. The use of double-entry and accounting equation

C2. Ledger accounts, books of prime entry and journals Preview 06:39

C2 Quiz. Accounting documents

D. Recording Transactions and Events 59 lectures

D1 a.b. Recording sales, purchases and returns Preview 03:10

D1 c. Sales tax: the general principles and example Preview 09:15

D1 d. Calculating and recording sales tax Preview 03:26

D1 e.f. Discounts allowed and discounts received Preview 04:35

D1 Quiz. Sales and purchases

D2. Cash Preview 07:00

D2 Quiz. Cash

D3 a.b.f. Inventory: year end adjustments. Continuous and period end record Preview 08:45

D3 e.d. IAS 2: Inventory costs and NRV Preview 08:44

D3 e.d. IAS 2: Inventory costs (continued): costs of conversion Preview 03:34

F3 b-iv. IAS 2: Inventory disclosure note Preview 02:23

D3 c.g. Methods of valuing inventory: FIFO, LIFO and AVCO with example Preview 11:08

D3 h. Impact of inventory valuation on profit and on assets Preview 02:37

D3 Quiz. Inventory

D4 a.b.c.d. Tangible non-current assets. Capital and revenue items Preview 04:59

IMPORTANT UPDATE! Starting from August 2021, ACCA has updated the wording replacing 'capital and revenue items' with 'asset and expense items' (D4c) and 'capital and revenue expenditure' with 'asset expenditure or expenses' (D4d). While the substance of both items has not changed, the new wording reflects more accurately the terms being commonly used.

D4 e. Recording acquisition of non-current assets Preview 06:12

D5 a.b.c. Depreciation, different methods. Straight line method example Preview 07:39

D4 e.f. Recording disposal of non-current assets. Profit or loss on disposal Preview 04:18

D5 b. Reducing balance method of depreciation Preview 02:29

D4 f. Recording disposal of non-current assets. Example Preview 06:05

D4 g. Revaluation of non-current assets upwards Preview 11:05

D4 g. Revaluation of non-current assets downwards Preview 04:06

D4 h. Profit or loss on disposal of a revalued asset Preview 04:06

D4 i. Disclosure on tangible non-current assets in the financial statements Preview 03:21

D4 j. Asset register: purpose and function Preview 01:32

D4 D5 Quiz. Tangible non-current assets and depreciation

D6 a.b. Intangible non-current assets and their types Preview 03:56

D6 c.d. Research and development costs Preview 05:27

D6 c.d. Research and development costs - Example Preview 03:16

D6 e. Amortisation of intangible assets. Methods of amortisation Preview 03:27

D6 d.f. Example: classifying R&D costs and calculating amortisation Preview 05:40

F3 b-iv. IAS 38: Intangible assets disclosure note Preview 01:40

D6 Quiz. Intangible non-current assets

D7 a.b. Accruals and prepayments adjustments. Matching concept Preview 06:27

D7 e. Impact of accruals and prepayments on net assets Preview 01:44

D7 c.d. Accruals and prepayments journal entries - Question Preview 02:02

D7 c.d. Accruals and prepayments journal entries - Answer Preview 05:19

D7 c. Accruals and prepayments exam question example Preview 04:03

D7 Quiz. Accruals and prepayments

D8 a.b. Receivables and payables. Pro and contra of offering credit to customers Preview 04:06

D8 c.d. Credit control, credit limits, aged receivables analysis Preview 05:22

D8 e.f.g.h. Allowance for receivables. Irrecoverable debt Preview 01:55

D8 i. Allowance for receivables in the financial statements: example Preview 08:04

D8 j.k. Reconciliations with suppliers. Example Preview 09:50

D8 Quiz. Receivables and payables

D9 a.b.c. Provisions, contingent liabilities, contingent assets Preview 06:36

D9 c. Provisions and contingencies: example Preview 05:16

D9 d.e.f. Changes in provisions. Reporting provisions Preview 02:59

D9 d.e.f. Calculating and reporting provisions: example Preview 06:14

D9 Quiz. Provisions.and contingencies

D10 a. Capital structure of a limited liability company (bonus: + a sole trader) Preview 06:12

D10 d. Bonus or capitalisation issue Preview 02:49

D10 e. Rights issue Preview 02:19

D10 b.c.h. Other reserves. Recording dividends and movements in capital accounts Preview 02:43

D10 b.c.d.e. Recording capital issue and other movements: example Preview 05:57

D10 a. (continued) Types of loan capital Preview 02:42

D10 i. Calculating and recording finance costs Preview 01:52

D10 a.i. Preference shares. Example Preview 05:53

D10 Quiz. Capital structure and finance costs

E. Preparing a Trial Balance 16 lectures

E1 a.b. Trial balance: definition and purpose. Extracting trial balance Preview 05:08

E1 b.c. Extracting trial balance and drafting financial statements: example Preview 11:47

E1. Trial balance practice question Preview 00:26

E1 d. Limitations of a trial balance Preview 03:59

E1 Quiz. Trial balance

E2. Correction of errors Preview 08:03

E2. Correction of errors: examples Preview 05:09

E2 Quiz. Correction of errors

E3 a.b.e. Control accounts in the double-entry system Preview 05:10

E3 c.d.f. Purpose of control accounts reconciliations. Example Preview 07:18

E3 Quiz. Control accounts and reconciliations

E4. Bank reconciliations Preview 06:34

E4 Quiz. Bank reconciliations

E5. Suspense accounts Preview 03:30

E5. Suspense accounts: examples Preview 08:17

E5 Quiz. Suspense accounts

F. Preparing Basic Financial Statements 22 lectures

F1 a.e. Statement of financial position and the accounting equation Preview 06:53

F1d. Preparing statement of financial position Preview 25:50

F1 Quiz. Statement of financial position

F2 a-d. Statement of profit or loss and other comprehensive income Preview 03:05

F2 e. Calculating income tax expense Preview 03:25

F2 Quiz. Statement of profit or loss and other comprehensive income

F1. F2. Practice questions Preview 00:23

F3. Disclosure notes Preview 06:30

F3 Quiz. Disclosure notes

F4. Events after the reporting period Preview 09:21

F4 Quiz. Events after the reporting period

F5 d.h. Statement of cash flows: purpose, types of cash flows Preview 05:30

F5 a. Difference between profit and cash flow: example Preview 07:26

F5. b.c. Need to control cash flows. Benefits and drawbacks of SOCF Preview 03:37

F5 f. Direct and indirect method of preparing SOCF Preview 06:54

F5 e.f.g. Preparing statement of cash flows using indirect method: example Preview 16:09

F5 Quiz. Statement of cash flows

F5. Practice questions Preview 00:24

F6 a.i. Incomplete records: using the accounting equation Preview 04:09

F6 a.ii.iii. Incomplete records: using ledger accounts and cash / bank summaries Preview 05:28

F6 a.iv. Incomplete records: using profit percentages Preview 03:43

F6 Quiz. Incomplete records

G. Preparing Simple Consolidated Financial Statements 13 lectures

G1. a.b. Group of companies Preview 10:14

G1 a.iv. Consolidated financial statements: approach Preview 07:38

G1 d. Goodwill Preview 05:59

G1 c.e. Consolidation steps. Intragroup eliminations. Unrealised profit Preview 14:00

G1 c.d. Preparing consolidated statement of financial position: example Preview 10:19

G1 e. Preparing consolidated statement of profit or loss: example (continued) Preview 03:07

G1 c.v. e.iii. Acquisitions part way through the year Preview 02:58

G1 c.d. Acquisitions part way through the year: consolidated SOFP example Preview 07:47

G1 e. Acquisitions part way through the year: consolidated SOPL example Preview 01:54

After watching this lecture, take a look at the Simon and Pemba question attached. You can choose one of the two versions: with hints which gives you some guidance on the solution or without hints if you feel confident about the topic.

The question is quite comprehensive, don't expect Part B questions to be this big in the exam. Typical part B question requirements would be not more than one third of what you have to do in Simon and Pemba.

How to approach the question

1. Read the scenario and the requirements below the table

2. Make your workings in the field below according to the Steps 1 - 5 from the lecture

3. Record the relevant journal entries to be made at the group level and post them as adjustments in the SOFP and SOPL tables (similar to what you did in the trial balance exercise)

4. Important! Check that your consolidated SOFP balances after every adjustment posted (TRUE test at the bottom). You may also need to check the formulas on the right and amend them if necessary

5. Once you have posted all the adjustments, check yourself performing the group retained earnings reconciliation on SOPL sheet

6. Finally, check with the model answer!

Alternatively,

if for whatever you are not going to use MS Excel, you may do this question with pen and paper like any other textbook task and compare the result with the model answer.