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There are 3 papers at this level that equip the students with basics of Financial Accounting, cost accounting, Economics and business mathematics and statistics. Students may be eligible for exemption of any or all of the papers of this level if they possess a professional qualification from a body we recognize.


ASSESSMENT PRINCIPLES

Assessment principles of Foundation Level are as under:

  • Students can take any number of papers in one seat to examination.
  • There are no rules for order in which these papers shall be taken. A student a can take any of the papers alone or in combination with other papers at this level.
  • The assessment exam for each paper shall be of 1.5 hours duration with 50% pass marks.
  • The foundation exams contains 100% mandatory questions to ensure that students study all the syllabus in details for passing the exams.

FL1: Introduction To Financial Accounting
Learning Objectives

To enable the students to demonstrate knowledge understanding of basic accounting concepts and principles underlying the preparation of financial records, including basic financial statements.

Key Competencies

On successful completion of this exam, the student shall be able to:

  • Demonstrate his knowledge of basic accounting concepts and principles.
  • Possess understanding of double entry system of book keeping.
  • Identify financial transactions and their recording mechanism in relevant financial records.
  • Prepare journals and ledger accounts.
  • Prepare trial balance from the ledger accounts.
  • Make bank reconciliation statements and controls accounts reconciliations.
  • Make period end entries for finalization of financials statements.
  • Correct the errors in financial transactions recording.

GRID Weightage
Accounting concepts and principles 15-20
Recording of accounting transactions and control accounts 15-25
Period End accounting adjustments and rectification of errors 20-30
Preparation adjusted financial statements and partnership accounts 25-40
Preparation of financial statements in accordance with IAS 1 including accounting for inventories. 25-30
Total 100
Components
Introduction to accounting and book keeping

Introduction to Accounting
  • Definition of business
  • Explain types of business organizations (sole proprietorship, partnerships and limited companies).
  • Users of financials statements and their needs
  • Define and identify assets, liabilities, equity, income and expenses.
  • Explain accounting equation

Basic Accounting Concepts

Fundamental accounting concepts: accrual, materiality, prudence, consistency, going concern, substance over form, completeness, true and fair view.


Book Keeping

Obtain in depth knowledge of basic books of accounts and their mechanism including

  • Books of prime entry
  • Double entry systems
  • The journal
  • Recording of sales purchase transactions
  • Concept and control accounts and their reconciliations with individual accounts.
  • Preparing Ledger Accounts
  • Preparing trial balance
  • Preparation of simple financials statements


Qualitative Characteristics of Financial Information

Define and explain qualitative characteristics of financial information:

  • Relevance
  • Reliability
  • Faithful presentation
  • Understandability
  • Timeliness


Period End Adjustments

Develop comprehensive understanding of following period end adjustments:

  • Allowance of doubtful debts and write offs.
  • Prepayments
  • Accruals
  • Bank reconciliation statements
  • Preparation of adjusted financial statements


Rectification of mistakes

Identify, classify and correct the errors in financial transactions recording.

Partnership Accounts
  • Accounting for goodwill
  • Preparation of partner’s capital and current accounts
  • Preparation of partnership financial statements
IAS 1: Preparation of Financial Statements
  • Preparation of statement of financial position
  • Preparation of statement of comprehensive income
IAS 2: Inventories
  • Determination of Inventory cost as the requirements of IAS 2 Inventories
  • Understand the concept of NRV and its calculation.
  • Accounting for inventories in financial statements in accordance with requirements of IAS 2.