ACCA F3 Financial Account

Financial accounting：CH1、CH2、CH3、Sources,recrds and books of prime entry 、 CH5ledger accounts and double entry

Financial accounting

• CH1
  • Financial reporting
    • Recording
    • analysing
    • summerising
  • Financial statements
    • SOFP statement of financial position
      • Asset
        • controlled
      • Liability
      • Equity/Capital
    • SOPL statement of profit or loss
      • Income
      • Expense
  • Needs
    • (a）Investors - dividend, any changes in share price, managerial efficiency ,liquidity position, future prospects and so on (b）Employees-- the security of employment future prospects (C）Lenders capability of redemption (d）Suppliers-be a good customer, pay its debts (e)Customers- abilities to continue producing and supplyinggoods (f) Government-comply with law,ability to pay tax,etc (g） The public--all the reasons mentioned above
  • Types of business entity
    • sole rtader
    • partnership
    • Limited liability company
• CH2
• CH3
• CH4 Sources,recrds and books of prime entry
  • source documents
    • types
      • quotation 报价单
      • purchase order 采购报价单
      • sales order 销售订单
      • goods received note
      • goods despatched note
      • invoice 发票
        • relates to a sales order or a purchase order
        • when trades on credit,supplier sends out,customer receives.
      • credit note
        • negative invoice
        • sales return purchase return
      • debit note
        • adjust an invoice
  • books of prime entry
    • as
      • a. sales day book
      • b. purchase day book
      • c. sales return day book
      • d. purchase return day book
      • e. cash book
        • receipts
        • patment
        • when analysis columns compled
      • f. petty cash book
        • cash book for small payments
        • imprest system 定额备用金制度
          • the amount of money in petty cash is kept at an sgreed sum or 'float'
      • g. journal
        • record for transaction which are not recorded in any of the other
        • unusual movement as
          • purchase NCA
          • drawing
          • invest capital
• CH5 ledger accounts and double entry
  • ledger accounts 总分类账
    • summarise all the individual transctions listed in the books of prime entry
    • format T-acccount (T型账)
  • nominal ledger（general ledger） 名义总账
    • summarises the financial affairs of a business
    • such as
      • plant and machinery at cost(NCA)
      • motor vechicles at cost(NCA)
      • proprietor's capital(liability)
      • wages and salaries (expense item)
      • reent and local taxes (expense item)
  • accounting equation
    • ASSETS=CAPITAL+LIABILITIES
  • double entry bookkeeping
• CH6 form trial balance to financial statements
  • trial balance
    • a list or ledger balances shown in debit and credit columns
    • steps as
      • i. collecting ledger accounts
      • ii. balance
      • iii. collecting the balances
  • SOPOL
    • steps as
      • i. collecting income and expences accounts
      • ii. balance
      • iii. gather together in the P/L account
      • iv. collecting the balcance
  • SOFP
    • steps as
      • i. collecting assets,liabilities and capital accounts
      • ii. balance
      • iii. gather together in the capital account
      • iv. collecting the balance
• CH7 （IAS2） inventory 存货
  • COGS
    • Opening inventory+purchase-closing inventory -purchase return
    • 买进来用于出售的放Purchase， 需要加工的，期末时没有卖出的放在inventories
  • valuing inventory
    • FIFO
    • AVCO
  • cost of carriage 运费
    • inwards
      • the cost of purchase
    • outwards
      • selling expense
  • IAS2
    • definations
      • inventories are assets
        • held for sale
        • in the process of production
        • consumed in production process or in the rendering of services
      • net realisable value (NRV) 净残值
        • ~Sales price X ~less costs to complete (X) ~less selling and diatribution costs (X) =NRV X
    • cost of inventories
      • cost of purchase
        • purchase price
        • import duties
        • cost which directly attributable
        • less any trade diacounts
      • costs of conversion
        • directly related
        • production overheads
      • bringing it to present location and condition
  • accounting
    • 1||| DR P/L a/c CR purchase account
    • 2||| DR inventory account (closing inventory value) CR P/L a/c
    • 3||| DR P/L a/c CR invntory account (opening inventory value)
• CH8 （IAS 16） Tangible Non-current assets 有形资产
  • Non-current assets
    • bought by the business for the long term
    • include
      • tangible
      • intangible
  • cost
  • Asset expenditure VS other expenditure
  • Depreciation
    • Methodas
      • stright line
        • (cost - residual value)/useful life
      • reducing balance
        • depreciation rate(%) X carrying amount (CA)
          • CA= Cost - accumulated deprication (F3不考虑减值)
    • revisited
      • residual value
      • useful life
    • Accounting
      • DR Depreciation expense （SPL） CR Accumulated depreciation （SOFP）
  • disposal
    • Sales peoceeds(卖掉得钱)
      • >CA profit on dispoal
      • <CA loss on dispoal
    • Accounting
      • 1||| Remove the cost of the asset DR Disposal account CR Non-current asset
      • 2||| remove accumulated deprecation charge to date DR Accumulated deprecation CR Disposal account
      • 3||| accoount for the sales proceeds DR cash CR Disposal account
      • 4||| ballance off disposal accounnt to find the profit or loss on disposal DR profit on disposal (p/l a/c) CR p/l a/c (loss on disposal)
  • revaluation (重估)
    • CAS VS IAS
      • CAS upword X downword ✓
      • IAS upword ✓ downword ✓
    • Accounting
      • 1||| ad just cost accounnt to revalued amount DR Non-current asset cost(SOFP) CR Revaluation surplus(SOFP)
      • 2||| remove the accumulated depreciation to date because the asset has no falllen in value DR Accumulated depreciation (SOFP） CR Revaluation surplus (SOFP)
      • 3||| excess depreciation charge is transfered each year from revaluation surplus to retained earnings DR Revaluation surplus（excess deprecation） CR retained earnings
  • disclosure （ 披露）
    • addition
    • disposal
    • increses/decreases fromm revalutions
    • reductions in carrying amount
    • depreciation
    • any other movements
• CH9 （IAS38） Intangible Nom-current assets 无形资产
  • examples
    • development expenditure
    • goodwill
      • 但不在38号准则内
    • concessions patents licence trade marks
  • Research expenditure
    • Research
      • no guarantee that the expenditure will generate profit
      • write expenditure off in the year i is incurred
    • Accounting
      • DR Reserch expenditure (SOPL) CR Bank
  • Development expenditure
    • Development
      • future profits are expected
      • must capitalise as an intangible non-current asset if all of the relevant cyiteria of PIRATE are satisfied
    • Accounting
      • DR Intangible non-current asset (SOFP) CR Bank/payables
    • Amortisation(摊销)
      • finite life
        • has
          • DR Amrtisation expense CR Accumulated amrtisation
        • didn`t has
          • 虽然不需要摊销 但要定期减值测试
• CH10 Accruals and prepayments 应付预付
  • Accruals 应付账款
    • Accounting when closing
      • DR Expense(SPL) CR Accurals(SOFP)
        • Current liabilities -accurals
        • 切实发生 作费用
    • Reversing when opening
      • DR Accruals(SOFR) CR Expense(SPL)
        • 防止多记 做DR
        • 什么时候付钱 什么时候算作真正的expense
  • Prepayments 预付账款
    • Accounting when closing
      • DR Prepayments (SOFP) CR Expense (SPL)
        • Current assets - prepayments
        • 由于支出钱即算作费用（实际未发生） 故应将本期预付的支出算作资产prepayment
    • Reversing when Opening
      • DR Expense CR Prepayments
        • 防止漏记 做CR
  • Accruals income 应收账款
    • Accounting when closing
      • DR Accrued income CR Income
        • Current assets -accrued income
        • 切实发生 作收入
    • Reversing when opening
      • DR Income CR Accruals income
        • 防止多记 CR
        • 什么时候收钱 什么时候算真正的income
  • Deferred income 预收账款
    • Accounting when closing
      • DR Income CR Deferred income
        • Current liabilities - Deferred income
        • 由于收到钱即算作收入（实际未发生） 故应将本期预收的收入算作负债deferred income
    • Reversing when opening
      • DR Deferred income CR Income
        • 防止漏记 DR
  • 判断 与计算（课后题）
• CH12 Irrecoverable debts and allowance 坏账、坏账准备
  • Irrecoverable debts
    • Debts which will never pay
    • expence account
    • accounting
      • happen
        • DR Irrecoverable debts account (expence) CR Receivable
      • recovered
        • DR cash at bank CR Irrecoverable debts account (expence)
  • allowance
    • may not pay
    • assets account
    • accounting
      • increase
        • DR Irrecoverable debts expense CR Allowance for receivables
      • decrease
        • DR allowance for receivables CR Irrecoverable debtes expense
  • 课后题
• CH13 sales tax 增值税
  • sales tax
    • as
      • indirect tax 间接税
      • cumulative tax 累计税
    • registered
      • charge output sales tax on sales
      • suffer input sales tax on purchase
    • irrecoverable sales tax 不可抵扣增值税
      • regarded as part of the cost of the items
    • • gorss amount
        • inclvsive
      • net amount
        • exclusive
  • accounting
  • salex tax in books
    • sales day book
    • purchase book
    • cash book
  • payable
    • as a current liability in the SOFR
  • main points
• CH14 Concrol accounts 收支总账
  • Control accounts
    • receiveables ledger control account (RLCA)
      • memorandum ledger 明细账
        • receivables ledger
      • balances agree
    • payable ledger control account (PLCA)
      • memorandum ledger
        • payable ledger
      • balances agree
  • Other entries
    • Contra entries
      • customerz which also supplies
      • DR PLCA CR RLCA
    • Returns
      • sales return
        • 1. Sold DR RLCA CR Sales
        • 2. Customer pay DR Bank CR RLCA
        • 3. Returns DR Sales(Returns) CR RLCA
          • CO owes to customer
        • 4. Refunds customer DR RLCA CR Bank
      • pruchase retuen
        • 1. Purchased DR Purchase CR PLCA
        • 2. Pay supplier DR PLCA CR Bank
        • 3. Returns DR PLCA CR Purchase(Returns)
          • Supplier owes to CO
        • 4. Supplier refunds DR Bank CR PLCA
    • Discount
      • Settlement discount
        • Discount allowed
          • to customer
          • Customer is expected to take up
            • Sale DR RLCA （net of diacount） CR Revenue / Sales
              • If does noe take up DR Cash（discount） CR Revenue / Sales
          • Customer is not expected
            • Sale DR RLCA(full amount) CR Revenue / Sales (full amount)
              • If does take up DR Revenue / Sales (discount) CR RLCA
        • Discount recceived
          • net of Trade discount but inclusive of settlement discount
            • Purchase DR Purchase CR PLCA
              • Take up DR PLCA(discount) CR Discounts received (SPL)
          • from supplier
        • as an inducement to settle d debt early
      • Trade discount
        • reduce the selling price
        • for regular customers or bulk buygers
        • never appear in the financial statements
  • Reconciliation
    • PLCA
    • RLCA
• CH15 Bank reconciliations 银行对账单
  • Diffference
    • Timinng difference 未达事项（银行）
      • Outstanding logatments /deposits credited after date
      • Unpresented/Outstanding cheques
    • Omission 未达事项（企业）
      • Such as
        • standing orders
          • 定期付款指令
        • direct debits
        • bake charge
          • 如电费
        • interest
          • on deposit
            • 存款利息
          • on overdraft
            • 借款利息
        • Dishonoured/Bounced cheques
        • Credit transfer
    • Errors by business
      • Transposition errors
        • 数字串位
      • Casting errors
        • 求和错误
    • Errors by bank
  • Reconciliation
    • Cash book
    • Bank reconciliation
• CH16 Correction of errors 错账矫正
  • Types of errors
    • trial balance
      • errors of omissiion
        • 漏记
      • errors of commission
        • 错记但不改变账户性质
      • errors of principle
        • 错记且改变账户性质
      • compensating errors
        • 同时数据串位
    • not balance
      • transposition error
      • debits do equal credits
      • no corresponding credit/debit made
      • two debit/credit entry
  • Suspense account 暂记账
    • temporary accounts
      • never appear in the final account
    • used for
      • To account for a debit / credit entry when the accountant is unsure as to where it shoud go
      • To make a preliminary trail balance when an error has been detected
    • step
      • 1. Determine the original accounting entry which was made
      • 2. Decide what entry should have been made
      • 3. Make the required adjustment
  • Adujstment to profit
• CH17 Incomplete records 不完整记录
  • Cost structuree
    • Cost of sales = opening inventory +purchase -closing inventory
    • • Magin
        • Sales 100%
      • Mark-up
        • COS 100%
  • Derive missing figures from given information
    • credit sales and receiveables
    • purchase and payables
    • Drawing
      • cash drawing
        • DR Drawing CR Cash
      • goods drawing
        • DR Drawing CR Purchase
  • Accounting equation
    • Debiets =Credits
    • Assets = Liability + Capital + Profit -Drawings
• CH18 Preparation of financial statements for sole traders 个人独资企业的财报
• CH19 Introcuction to company accounting 概述公司的会计处理
• CH20 Preparciaion of financial statements for companies 编制公司财报
  • Working
    • Depreciation
      • (To administrative expense and Cost of sales)
    • Administrative expense
      • Pre T/B Depreciation Receivable allowance bad debts allowance accrued （prepayment）
    • Cost of sales
      • Opening inventory Purchase （purchase return） （Closing invetory） +-Errors(charge in T/B) Depreciation
    • Property, plant and equipment
      • cost Acc.dep chg.dep CA Buildings plant and equipment Property
    • Retained earnings
      • B/f per T/B profit for period Dividened paid
  • SOPL
    • Revenue (Cost of sales) GROSS PROFIT Discount received （Administrative expense） （Distribution costs） PROFIT BEFOR TAX (incomen tax for the year)(only chg) PROFIT FOR THE YEAR
  • STATEMENT OF CHANGE IN EQUITY
    • Share capital Share premium Retained earnings Total Balance at 1.Jan.YYYY Total comprehensive income for the year（profit for the year） Dividend paid Balance at 31.Dec.YYYY
  • SOFP
    • Assets Non-current assets Buildings plant and equitment property Current assets Inventory Cash at bank Trade reveivable(charge in bad debts, allowance) Prepayment Total assets Equity and liabilities Equity Share capital Share premium RE Revolution surplus Liability Bank overdraft Sales tax payable Current tax payable（注意计算方式） Trade payable Accrued Total equity and liabilities
• CH22 Statements of cash flows 编制现金流量表
  • types of cash flows
    • operating activities
    • investing activities
    • financing activities
  • method
    • indirect method
      • Cash flows from operting activities
        • profit before taxation
        • Adujustment for
        • Income taxes paid
      • Cash flows fom investing activities
    • direct method
• CH23 Introduction to consolidated financial statements 概述合并报表
  • types of investmen
    • Subsidiary （>50%）
      • An entity that is controlled by another entity
        • Consolidate
    • Associate （20% to 50%）
      • An entity over which the investor has sigificant influence
        • Equity account
    • Trade investment （0% to 20%）
      • An simple entity hat is not two another
        • Investment in SOFP and investment income in SPLOCI
    • Accounting tratment
  • Consolidation method for SOFP
  • Accounting tratment for an associate
    • Equity method
• CH24 The consolidated statement of financial position 编制合并资产负债表
  • Working
    • Group structure
    • Goodwill
      • Consideration (investment) X + FV non-controlling interest X - FV net assets at acquisition represented by: Share capital X Retained earings X X =Goodwill arising on acquisition X
    • Non-controlling intrest
      • FV NCI +NCI share of post-acquisition reserves -PUP on sales made by S =NCI at year end
    • Retained earnings
      • Per question X X PUP on sales made by P/S (X) (X) Pre-acquisition retained earnings (X) Group share of post-acquisition earnings X X subsidiary(%) X = X
    • Povision for unrealisted profit (PUP)
      • =总售价X利润率X未售占比
        • Margin
        • Mark-up
• CH25 The consolidated statement of profit or loss 编制合并利润表
  • Revenue
    • P′revenue + S′revenue － 内部交易售价
  • Cost of sales
    • P′COS + S′COS - 内部交易售价 + PUP
  • Gross profit
    • P'profit + S'profit - PUP
  • Working
    • Group structure
      • P—S DD.MM.YY shares
    • NCI
      • FV NCI X Share of post-acquisition RE X PUP on sales made by S (X) =NCI X
    • Unrealised profit
      • S—P pup