Scribd
Upload
20 views

Financial Accounting A Practical Version

This document provides an introduction to the authors of a textbook on financial accounting. Dr. Abanis Turyahebwa is a senior lecturer of accounting who has over 15 years of teaching experience. He holds a PhD in accounting and finance as well as other qualifications. The textbook covers topics such as the nature and purpose of accounting, principles of double-entry bookkeeping, recording business transactions, management of cash, and the trial balance. It is intended to provide students with a practical guide to financial accounting.

Uploaded by

206 Angela Ginting
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
20 views

Financial Accounting A Practical Version

This document provides an introduction to the authors of a textbook on financial accounting. Dr. Abanis Turyahebwa is a senior lecturer of accounting who has over 15 years of teaching experience. He holds a PhD in accounting and finance as well as other qualifications. The textbook covers topics such as the nature and purpose of accounting, principles of double-entry bookkeeping, recording business transactions, management of cash, and the trial balance. It is intended to provide students with a practical guide to financial accounting.

Uploaded by

206 Angela Ginting
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 10

FINANCIAL ACCOUNTING

A PRACTICAL APPROACH, 1st Edition

By

Dr Abanis Turyahebwa PhD Actg, CFIP, MBA Actg&Fin, BBA Actg


Senior Lecturer, Department of Business Studies
Kabale University

And

Kasozi Geoffrey MSc. Acc & Fin (MUK), B.Com (Hons) MUK, DIP BS
ABOUT THE AUTHORS

Dr. Abanis Turyahebwa is a Chartered Accountant and a Senior Lecturer


in the Department of Business Studies at Kabale University. He holds a PhD in
Management Science (Accounting and Finance), Certified Forensic Investigation
Professional (CFIP), MBA (Accounting&Finance) and BBA (Accounting). He has
been teaching accounting for over 15 Years.

2
ABOUT THE AUTHORS ................................................................................................................................................. 2
INTRODUCTION .............................................................................................................................................................. 6
CHAPTER ONE .................................................................................................................................................................. 7
THE NATURE AND PURPOSE OF ACCOUNTING ............................................................................................. 7
1.1 INTRODUCTION ............................................................................................................................................... 7
1.2 THE PURPOSE OF ACCOUNTING ............................................................................................................. 9
REVIEW QUESTIONS ................................................................................................................................................. 37
CHAPTER THREE ........................................................................................................................................................... 39
PRINCIPLES OF DOUBLE ENTRY AND SYSTEMS OF ACCOUNTING ................................................. 39
DOUBLE-ENTRY BOOK-KEEPING SYSTEM ..................................................................................................... 39
3.1 INTRODUCTION ............................................................................................................................................. 39
3.2 PRINCIPLES OF DOUBLE-ENTRY SYSTEM ....................................................................................... 40
3.3 THE ACCOUNTING EQUATION ............................................................................................................... 44
REVIEW QUESTIONS ................................................................................................................................................. 45
CHAPTER FOUR ............................................................................................................................................................. 46
RECORDING BUSINESS TRANSACTIONS ....................................................................................................... 46
4.1 INTRODUCTION ............................................................................................................................................. 46
4.2 THE JOURNAL .................................................................................................................................................. 48
4.3 SALES JOURNAL ............................................................................................................................................. 51
4.4 PURCHASE JOURNAL ................................................................................................................................... 53
4.5 LEDGERS ............................................................................................................................................................. 54
4.6 BALANCING OFF LEDGERS ....................................................................................................................... 55
3.7 CHART OF ACCOUNTS ................................................................................................................................. 60
NON-CURRENT ASSETS ............................................................................................................................................ 61
102 ACCUMULATED DEPRECIATION – MOBILE NON CURRENT ASSETS ................................. 61
110 IMMOBILE ASSETS ....................................................................................................................................... 61
CURRENT ASSETS ........................................................................................................................................................ 62
140 CASH & BANK .................................................................................................................................................. 62
145 BANK ..................................................................................................................................................................... 62
150 ACCOUNTS RECEIVABLES ......................................................................................................................... 62
152 OTHER RECEIVABLES .................................................................................................................................. 62
160 PREPAIDS .......................................................................................................................................................... 62
161 ADVANCES ......................................................................................................................................................... 62
EQUITY AND LIABILITIES ...................................................................................................................................... 62
200 SHARE CAPITAL ............................................................................................................................................. 62

3
260 PROVISIONS .................................................................................................................................................... 63
270 PROVISION FOR DEPRECIATION......................................................................................................... 63
280 REVENUE ............................................................................................................................................................ 63
300 VEHICLE EXPENSES ..................................................................................................................................... 64
400 SALARIES & WAGES .................................................................................................................................... 64
405 STAFF BENEFITS ............................................................................................................................................ 64
500 ADMINISTRATIVE EXPENSES................................................................................................................. 64
600 COMPUTER EXPENSES ................................................................................................................................ 65
700 FINANCIAL EXPENSES ............................................................................................................................... 65
11200 MISSIONS ......................................................................................................................................................... 65
REVIEW QUESTIONS ................................................................................................................................................. 66
CHAPTER FIVE ............................................................................................................................................................... 67
MANAGEMENT OF CASH ........................................................................................................................................... 67
5.1 INTRODUCTION ............................................................................................................................................. 67
5.2 NATURE OF THE CASH BOOK .................................................................................................................. 67
5.3 THE PETTY CASH BOOK ............................................................................................................................. 67
5.4 BANK RECONCILIATION ........................................................................................................................... 73
5.5 INTERNAL CONTROL SYSTEM: ............................................................................................................... 78
REVIEW QUESTIONS ................................................................................................................................................. 80
CHAPTER SIX ................................................................................................................................................................. 82
THE TRIAL BALANCE .................................................................................................................................................. 82
6.1 INTRODUCTION ............................................................................................................................................. 82
6.2 ERRORS IN THE TRIAL BALANCE ......................................................................................................... 83
6.3 NOTE ON CORRECTION OF ERRORS ................................................................................................... 84
6.4 ADJUSTING ENTRIES .................................................................................................................................. 94
REVIEW QUESTIONS ................................................................................................................................................. 96
CHAPTER SEVEN ........................................................................................................................................................... 97
FINAL ACCOUNTS 1: THE INCOME STATEMENT......................................................................................... 97
7.1 INTRODUCTION ............................................................................................................................................. 97
7.2 TRADING ACCOUNT ..................................................................................................................................... 97
7.3 PROFIT AND LOSS ACCOUNT ............................................................................................................... 101
7.4 SPECIAL ITEMS ............................................................................................................................................ 103
7.5 ALLOCATION OR APPROPRIATION OF NET PROFIT ............................................................... 105
7.6 IAS 1: PRESENTATION OF FINANCIAL STATEMENTS – INCOME STATEMENT. ....... 105
CHAPTER EIGHT ......................................................................................................................................................... 109
FINAL ACCOUNTS 2: THE BALANCE SHEET ................................................................................................ 109

4
8.1 INTRODUCTION ........................................................................................................................................... 109
8.2 NATURE OF THE BALANCE SHEET ...................................................................................................... 109
8.3 ASSETS .............................................................................................................................................................. 111
7.4 LIABILITIES ................................................................................................................................................... 113
8.5 DISTINCTION BETWEEN CAPITAL AND REVENUE EXPENDITURES............................... 115
8.6 PREPARATION OF A BALANCE SHEET ............................................................................................. 116
8.7 IAS 1: PRESENTATION OF FINANCIAL STATEMENTS. ........................................................... 117
REVIEW QUESTIONS ............................................................................................................................................... 129
CHAPTER NINE ............................................................................................................................................................ 132
MANUFACTURING ACCOUNTS ............................................................................................................................ 132
9.1 INTRODUCTION ........................................................................................................................................... 132
9.2 MANUFACTURING COSTS ....................................................................................................................... 132
PARTNERSHIP ACCOUNTS.................................................................................................................................... 145
10.1 INTRODUCTION ........................................................................................................................................... 145
10.2 NATURE OF PARTNERSHIP - THE BASICS. ................................................................................... 145
10.3 PARTNERSHIP VS SOLE TRADER VS LIMITED COMPANY .................................................... 147
10.4 PREPARING PARTNERSHIP ACCOUNTS ......................................................................................... 150
10.5 PROFIT AND LOSS APPROPRIATION ACCOUNT ........................................................................ 151
10.6 REVALUATION METHOD .......................................................................................................................... 160
10.7 PROCEDURE WHERE A PARTNER IS INSOLVENT – THE RULE IN GARNER VS
MURRAY .......................................................................................................................................................................... 169
REVIEW QUESTIONS ............................................................................................................................................... 174
CHAPTER ELEVEN ...................................................................................................................................................... 176
IAS 16 .............................................................................................................................................................................. 176
DEPRECIATION AND DISPOSAL OF NON-CURRENT ASSETS ........................................................... 176
11.1 INTRODUCTION ........................................................................................................................................... 176
10.3 DISPOSAL OF NON CURRENT ASSETS ............................................................................................. 178
REVIEW QUESTIONS ............................................................................................................................................... 182
CHAPTER TWELVE ..................................................................................................................................................... 183
ACCOUNTING FOR NON PROFIT ORGANISATIONS ............................................................................... 183
12.1 INTRODUCTION ........................................................................................................................................... 183
12.2 RECEIPTS AND PAYMENTS ACCOUNTS ........................................................................................... 183
12.2 INCOME AND EXPENDITURE ACCOUNTS ....................................................................................... 185
REVIEW QUESTIONS ............................................................................................................................................... 196

You might also like