Financial Statements and Business Performance

Learn financial accounting from the mechanics of double entry through to reading and analysing published financial statements, with every method worked as a numerical.

Year 1
Term 1

Course Overview

This course builds financial accounting from first principles. You will study the double entry system, journals, ledgers and the trial balance, the preparation of the profit and loss account, balance sheet and cash flow statement, the ten accounting concepts and their practical consequences, revenue recognition across delivery, percentage of completion, completed contract, cost recovery and instalment methods, inventory valuation under FIFO, LIFO and weighted average, fixed assets and all four depreciation methods, reading published financial statements including Schedule III, consolidation, deferred tax and the profit ladder, and assessing business performance through common size analysis, trend analysis, the ROTA to ROCE to ROE chain and solvency measures. Worked exercises and journal entries run throughout.

What You'll Learn

  • Introduction to Financial Accounting and Mechanics of Accounting
  • Preparation of Profit and Loss Account, Balance Sheet and Cash Flow Statement
  • Accounting Concepts
  • Revenue Recognition
  • Inventory Accounting and Valuation
  • Fixed Assets and Depreciation Accounting
  • Reading Financial Statements
  • Assessing Business Performance through Financial Statements

Course Content

  • Introduction to Financial Accounting and Mechanics of Accounting

    The purpose and users of financial accounting, the four forms of business organisation, and the full mechanical chain from journal entry to trial balance to finished statements, worked twice: the Ram garment business and the Pharma Asia comprehensive exercise.

    View Notes

  • Module 1 Test: Accounting Mechanics

    Ten exam-level questions on business forms, account types, the golden rules, journal and ledger format, subsidiary books and ledgers, the accounting equation, the trial balance tie-out and the Pharma Asia closing adjustments.

    10 Questions
    Take Test