Financial Accounting 102

What Will You Learn?

• Understand how inventory flows through the accounting system and how to calculate cost of sales
• Distinguish between periodic and perpetual inventory systems and know when each is used
• Value inventory correctly using cost formulas and apply the lower of cost and net realisable value rule
• Identify and correct inventory errors and understand their effect on profit and the statement of financial position
• Classify expenditure as capital or revenue and determine the true cost of an asset
• Calculate depreciation using straight-line, reducing balance, and other common methods
• Account for the disposal of property, plant and equipment and calculate the resulting gain or loss
• Apply the accrual concept to record accrued expenses, prepaid expenses, accrued income, and income received in advance
• Account for trade receivables, write off irrecoverable debts, and create an allowance for expected credit losses
• Present receivables correctly in the financial statements
• Prepare a bank reconciliation statement and update the cash book for items appearing only on the bank statement
• Identify the different types of accounting errors and determine which ones affect the trial balance
• Use a suspense account and prepare correcting journal entries for accounting errors
• Prepare an adjusted trial balance from an unadjusted trial balance plus year-end information
• Construct a Statement of Profit or Loss and a Statement of Financial Position from an adjusted trial balance
• Classify assets, liabilities, and owner's equity correctly in the financial statements
• Work through the complete accounting cycle from source documents to final financial statements
• Approach and solve an integrated accounting problem using a structured, exam-ready method
• Complete a full capstone practical challenge based on a realistic fictional business