Book Keeping

INTRODUCTION

The Book Keeping syllabus is designed to assess the candidates’ basic knowledge of business activities and understanding of the financial system for the purpose of establishing a business and laying a good foundation for further studies.

OBJECTIVES

The aim of this paper is to test candidates’:

i. knowledge of basic skills required to start a business;

ii. ability to appreciate the rules and functions of book keeping;

iii. ability to apply the basic knowledge and skills in Book Keeping to modern business activities.

SCHEME OF THE EXAMINATION

There will be two papers, Papers 1 and 2, both of which will be a composite paper to be taken in one sitting.

PAPER 1: Will consist of forty multiple choice questions all of which must be answered in 50 minutes for 40 marks.

PAPER 2: Will consist of two sections, Sections A and B as follows:

Section A: Will cover the Theory of Book-Keeping and contain four questions. Candidates will be required to answer two for 20 marks.

Section B: Will cover the Practice of Book-Keeping and contain five questions. Candidates will be required to answer three for 60 marks. The paper will last 2 hours.

1. Introduction to Book Keeping

1.1 Meaning of Book Keeping
- Definition, history, nature, importance, and functions of Book Keeping
- Career opportunities and beneficiaries of bookkeeping;
- Qualities and values of bookkeepers.

1.2 Assets and Liabilities:
- Definition, differences, classification, and examples of Assets and Liabilities.

1.3 Business Transactions:
- Meaning and types of business transactions;
- Parties involved in business transactions.

1.4 Classification of Accounts:
- personal accounts (debtors and creditors);
- Impersonal accounts (real and nominal). 1.5 Source Documents
- Definition, identification, types, and uses of source documents.

2. Concepts and Conventions

- Definition
- Identification and the differences between concepts and conventions.

3. Books of Original Entry

- Definition
- Purpose
- Types
- Format, uses, and preparation of Books of Original entry

4 Ledger and Principles of Double Entry

4.1 Ledger: - definition, classification, format, uses and preparation of ledgers.

4.2 Principles of Double Entry:
- Meaning, history, rules, and making double entries.

5. Cash Book

5.1 Meaning, purpose, description, differences, and preparation of:
- Single column
- Double column
- Three column
- Petty cash book

6. Bank Reconciliation Statement

- Meaning and purpose
- Terminologies and banking documents
- Causes of differences between cash book and bank statement balance

7. Trial Balance and Errors

- meaning and functions of trial balance
- rules and preparation of trial balance
- meaning, types, classification of errors
- correction of errors and preparation of Suspense Account

8. Financial Statements of Sole Proprietorship

8.1 Trading Account
- Definition, purpose, format and preparation of simple Trading Account
- Methods of valuing stock (FIFO and LIFO).

8.2 Profit and Loss Account
- Definition, purpose, format and preparation of Profit and Loss Account

8.3 Balance Sheet
- Meaning, content, format and preparation of a simple balance sheet.

9. Adjustments to Financial Statements

9.1 Adjustment for prepayments, accruals, depreciation, bad and doubtful debts;

9.2 Meaning and methods of depreciation (straight line and reducing balance).

10. Control Accounts

- Meaning and preparation of Sales Ledger and Purchases Ledger Control Accounts.

11. Single Entry and Incomplete Records

- Meaning, limitations and preparation of final accounts from incomplete records

12. Accounts of Not-For-Profit Making organizations

Purpose, content and preparation of Receipts and Payments Accounts, Income and Expenditure Account.

14. Partnership Accounts

- meaning and terms
- partnership deed, drawings, interest on capital, interest on drawings
- preparation of Capital and Current Accounts, Profit and Loss and Appropriation Account and Balance Sheet
- admission of new partners and Goodwill Account.

15. Joint Venture Accounts

- Meaning and purpose
- Differences between joint venture and partnership

16. Departmental and Branch Accounts

- Importance and differences
- Preparation of Departmental and simple Branch Accounts.

17. Introduction to Company Accounts

- Formation and terminologies
- Preparation of simple financial statements.

18. Interpretation of Accounts

- Purpose and computation of ratios
- Net profit margin
- Stock turnover
- Quick ratio
- Acid test ratio
- Gross profit margin
- Return on capital employed