Course

Financial Accounting: Foundations and Entity Statements (9706)

Name: Financial Accounting: Foundations and Entity Statements (9706)
Price: 2499 BDT

Double entry, the two statements and ratio analysis, taught on books you can post to. Commit to a prediction, apply the transaction, then read the effect off the same set of accounts.

100 lessons9h 56mEnglishPart 1 of 2

What you'll learn

Apply the accounting equation to any transaction, and see at once when an entry does not balance
Record events through the books of prime entry into the ledger, and extract a trial balance
Prepare an income statement and a statement of financial position in the format 9706 marks
Adjust for accruals, prepayments, depreciation and irrecoverable debts before you prepare anything
Account for a sole trader, a partnership and a limited company, and explain what changes between them
Calculate liquidity, profitability, gearing and efficiency ratios, then interpret them rather than list them
Use the command words state, explain, calculate, prepare, analyse and evaluate the way an examiner reads them
Separate profit from cash, an expense from a payment, and a debit from a decrease

Requirements

O Level or IGCSE mathematics: percentages, ratio and simple algebra are enough
No previous accounting is assumed; the course starts at the accounting equation
A calculator, and paper for setting out statements by hand

Course content

100 lessons · 9h 56m

1.2 · The accounting equation and the double-entry rule

The one rule the whole subject rests on. What a business owns, what it owes, and why every transaction touches the books twice. Ends with debit and credit as sides, not as good and bad.

0/10

Assets, liabilities and capital

Predict the capital of a shop from what it owns and what it owes, then meet the equation.

Preview6m 2.

Every transaction keeps the equation level

Post four transactions of a Mirpur service centre onto a scale that must stay level.

Preview7m

Who financed what the business owns

Split the assets between the owner and the outsiders, and read the equation from the right.

The amount that enters the books

A parts bill: predict the total, then see why quantity times price is the recorded figure.

Debit and credit are sides, not good and bad

The normal balance of each account type, and the misreading that costs the most marks.

Choosing the debit and the credit

Four workshop transactions, each posted to two accounts, with the T-accounts filling as you go.

Where income and expenses go

A sale, a rent payment and drawings: three events that all change capital in the end.

What a one-sided entry does

Predict what happens to the equation if only one account is changed, then break it on purpose.

Rearranging the equation, and the command words

Capital equals assets minus liabilities, and what state and calculate ask you to write.

10.

One exam question, end to end

Eight marks across four parts, with no options: assets, capital, a credit purchase, then drawings explained.

1.2, 1.4 · Books of prime entry and the ledger

How a real business gets thousands of transactions into the ledger without writing every one of them there. The day books, the cash book, discounts, the trial balance, and the control account that proves the ledger.

0/10

Why the ledger is not written directly

Five books of prime entry, what enters each one, and the one document that decides.

Preview6m 2.

Checking the invoice before you record it

A buying-house invoice: predict the total, then see what the day book actually copies.

Preview5m

From the day book into the ledger

Post credit purchases and credit sales, and see the two ledger accounts each one touches.

A return reverses the original entry

Predict what returning faulty fabric does to the equation, then post it both ways.

The cash book, and the contra entry

Money moved between the till and the bank changes two assets and nothing else.

One cost, three orders

Share a container charge across three orders on one rate, the way an analysis column works.

Trade discount and cash discount

Predict which discount ever appears in the ledger, then drag the bar to the invoice figure.

What the trial balance cannot catch

Post a full set of events, then meet the six errors that leave the totals equal.

The sales ledger control account

Build the control account line by line, and see what each line is there to prove.

10.

One exam question, end to end

Eight marks across four parts, with no options: the book, the entry, a control account balance, then an error named.

1.5-1.6 · From trial balance to the income statement

Turning a list of balances into a statement of performance. Which balances belong to the period, how cost of sales is built, what gross profit and net profit each measure, and what "prepare" means to an examiner.

0/11

The income statement covers a period

Predict which balances belong to the year and which survive into the next one.

Preview6m 2.

Sorting the trial balance into two statements

Every balance goes to exactly one statement. Sort a jewellery shop trial balance and check the equation.

Preview7m

Building cost of sales

Opening inventory, purchases, carriage inwards, returns and closing inventory, in that order.

Gross profit, and where it goes next

Drag revenue and cost of sales and watch profit move, then land in capital.

Closing inventory is one day of a moving level

Watch stock rise and fall through the year, then read the single figure the statement uses.

Margin and mark-up are different fractions

The same gross profit measured against revenue and against cost gives two different numbers.

Splitting one expense between two counters

Rent shared by floor area, so each counter carries the cost it actually causes.

From gross profit to profit for the year

Predict what heavier expenses do to profit, then to cash, then to capital.

Your turn: the expenses that leave nothing

A graded question: find the level of expenses at which profit for the year is zero.

10.

Closing the books carries profit into capital

Sort the silver counter accounts, then close them and watch the equation hold.

11.

One exam question, end to end

Ten marks across four parts, with no options: cost of sales, gross profit, profit for the year and the margin.

1.5 · The statement of financial position

The statement that describes one date. Current and non-current, the capital account that links two year ends, and why a loan changes the picture without changing the profit.

0/10

A statement about one date

Predict what the word "at" in the heading changes about what belongs in the statement.

Preview6m 2.

Current and non-current

Sort a poultry farm trial balance, and use the twelve-month test on every item.

Preview7m

Where the profit lands

Drag the trading figures and follow the profit from one statement into the other.

Drawings reduce capital, not profit

Predict what the owner taking eggs for the family does to profit, then to capital.

Financed by the owner or by the bank

Split the farm assets between the two groups with a claim on them.

Interest makes a liability grow

Predict the loan balance after five years, with interest added rather than paid.

The capital account links two year ends

Opening capital plus profit less drawings, set out the way the exam wants it.

Your turn: find the missing figure

A graded question where capital is the unknown and the equation is the only tool.

A loan changes the sheet, not the profit

Predict what borrowing does to profit for the year before you look at the statement.

10.

One exam question, end to end

Ten marks across four parts, with no options: current assets, closing capital, the profit, then one classification.

1.5 · Adjustments: accruals, prepayments and irrecoverable debts

The step between the trial balance and the statements. Why an expense is not a payment, how to turn cash paid into the charge for the year, and how doubtful receivables are dealt with without deleting them.

0/10

An expense is not a payment

Predict the charge for the year when the December bill has not been paid yet.

Preview6m 2.

The accrual entry

Post an unpaid electricity bill, and see which two accounts an accrual touches.

Preview7m

The prepayment entry

Rent paid one month ahead: predict whether the extra month is an asset or an expense.

From cash paid to the charge for the year

The four-line calculation that turns any payment figure into the expense figure.

Rent accrues evenly, payments do not

Predict the rent charged by month twelve, then compare it with the cash actually paid.

An accrual creates a liability

Predict what recording an unpaid bill does to the two sides of the equation.

Irrecoverable debts and the allowance

Predict what a five per cent allowance takes off receivables, then drag the bar to it.

Every adjustment appears twice

Sort a fuel station trial balance that already carries an accrual and a prepayment.

Your turn: the charge for the year

A graded question on turning payments plus an opening and closing accrual into one figure.

10.

One exam question, end to end

Ten marks across five parts, with no options: a prepayment, an accrual, an allowance, then where each is shown.

1.3 · Depreciation of non-current assets

Spreading the cost of an asset over the years that use it. Straight line against reducing balance, the double entry, the carrying amount in the statement, and the profit or loss on disposal.

0/10

Depreciation allocates cost, it does not value

Predict whether depreciation moves cash, then meet what the charge actually represents.

Preview6m 2.

The straight-line method

An equal charge each year, and what residual value does to the calculation.

Preview7m

The reducing-balance method

Predict the year one charge at 25 per cent, then see why later years cost less.

Two paths from the same cost

Draw both book value curves together, and change the rate to see where they cross.

What the annual charge does to the books

Predict the effect of the charge on cash, then post two years of it onto the equation.

The provision for depreciation account

Why the asset account is never touched, and how the carrying amount is worked out.

How much of the cost has gone by year three

Predict the share of the depreciable amount used up after three years, then drag to it.

Cost, accumulated depreciation, carrying amount

Sort a service centre trial balance where one asset account carries a negative balance.

Your turn: profit or loss on disposal

A graded question comparing sale proceeds with the carrying amount on the day of sale.

10.

One exam question, end to end

Ten marks across four parts, with no options: two depreciation methods, a carrying amount and a disposal.

1.1, 1.5, 3.1 · Sole trader, partnership and limited company

The same double entry, three different owner sections. Limited liability, the partnership appropriation account, capital and current accounts, and what a share issue does to equity.

0/10

Three structures, one set of books

Predict what changes between a sole trader and a company: the entries, or the owner section.

Preview6m 2.

What limited liability actually limits

A failing restaurant owes more than it holds. Predict what the owner personally loses.

Preview7m

Capital accounts and current accounts

Post two partners joining and taking drawings, and see which account each entry touches.

The appropriation account

Interest on capital and a partner salary come out before anything is shared.

Sharing the residual profit

Predict each partner share of the residual, then drag the divider to the agreed ratio.

When the ratio is the capital ratio

A third partner joins, and the residual is split on one rate per dollars of capital.

More debt, the same protection

Predict what a much larger shortfall costs a shareholder in a limited company.

The equity section of a company

Share capital, retained earnings, and where the profit for the year goes instead of capital.

A rights issue and a bonus issue

Predict whether a bonus issue changes total equity, then post both issues.

10.

One exam question, end to end

Eleven marks across four parts, with no options: an appropriation, a current account balance, then one evaluation.

1.6, 3.5 · Ratio analysis and interpreting the statements

Turning two statements into a judgement. Profitability, liquidity, gearing and efficiency, the ratios that answer each one, and the difference between calculating a ratio and interpreting it.

0/9

A ratio on its own says nothing

Predict whether a current ratio of 1.2 is good, then meet the three comparisons that decide.

Preview6m 2.

Profitability: margin and return

Read gross margin, net margin and return on capital employed off one healthy pharmacy.

Preview7m

Margin against mark-up, again

Predict which of the two is larger for the same gross profit, then drag the bar.

Liquidity: can it pay next month

The second pharmacy looks profitable and cannot pay. Predict the quick ratio first.

Your turn: return on capital employed

A graded question on the ratio 9706 calls the primary measure of performance.

Gearing: who carries the risk

Predict what happens to a highly geared business when sales fall by a fifth.

Efficiency: how long cash is tied up

Inventory turnover in days, receivables days, payables days, and the cycle they make.

Run the pharmacy: profit is not cash

Make the decisions yourself, then read the two statements the decisions produced.

One exam question, end to end

Twelve marks across five parts, with no options: two net margins, a quick ratio, a return on capital, a comparison.

1.4 · Sales and purchases ledger control accounts

Build both control accounts, reconcile them to personal ledgers, locate errors and trace each correction into the financial statements.

0/5

Purpose and source documents

Map each control-account entry back to a book of prime entry.

Preview6m 2.

Sales ledger control account

Source and place credit sales, receipts, discounts, returns, bad debts, interest and contra entries.

Preview8m

Purchases ledger control account

Source and place credit purchases, payments, discounts, returns, refunds and contra entries.

Reconcile the control account and personal ledgers

Adjust the correct side of a disagreement, then distinguish ledger correction from financial-statement correction.

Control accounts: exam question

Prepare, reconcile and evaluate control accounts in one structured application.

10.

1.5 · Incomplete records

Recover capital, sales, purchases and profit from partial records, then prepare statements for trading and service businesses.

0/4

Profit from opening and closing capital

Adjust the change in capital for drawings and additional capital.

Preview6m 2.

Recover missing sales and purchases

Use control accounts, cash records and margins to reconstruct totals.

Preview6m

Prepare statements from incomplete records

Combine reconstructed figures with year-end adjustments.

Incomplete records: exam question

Apply the chapter rule in a new context, then compare the response with a two-mark scheme.

11.

3.1 · Clubs and societies

Turn cash records into subscriptions income, trading results, accumulated funds and financing decisions for a non-profit organisation.

About the creator

Reckonry