ACCA paper F3 Financial Accounting
Financial Accounting (FA) is the third exam you will be required to appear in the ACCA journey and final exam of the ACCA knowledge level. The syllabus of Financial Accounting (FA) aims to develop understanding and application of basic accounting concepts and the underlying principles of financial accounting and technical proficiency in the usage and application of double-entry bookkeeping and preparation of financial statements. NCFM Academy Hyderabad offering ACCA Paper F3 Financial Accounting at its Ameerpet Training center.
Exam Format of Financial Accounting
The syllabi of all foundation level exams are assessed by a two-hour-long computer-based examination. The syllabi as a whole are examinable; all of the questions in the exams will be compulsory which means that there is no topic that should be left out by the students during their preparation. The questions are designed in such a way that they test the knowledge, comprehension, and application of the knowledge acquired by the students.
The examination will consist of two sections. Section A will contain 35 two mark objective test questions.
Section B will contain 2 fifteen mark multi-task questions. These will test consolidations and accounts preparation. The consolidation question could include a small amount of interpretation and the accounts preparation question could be set in the context of a sole trader or a limited company
Syllabus ACCA F3 Financial Accounting
The syllabus is divided into eight sections with further sub-sections.
A- The context and purpose of financial reporting
This is the first section of this course; the aim of this section is to introduce students to the scope and purpose of financial statements for external reporting. Students will use the understanding from their “Accountant in Business” exam to develop a deeper understanding of stakeholders and their role. This section will introduce the students to the basic elements of the financial statements and the framework and standards which form the underlying principles of financial accounting. Students will also learn the duties and responsibilities of those charged with governance.
B- The qualitative characteristics of financial information
The second section covers the theoretical framework and the qualitative characteristics of financial information. Students will learn about the relevance, timeliness, comparability and other characteristics. They will also be introduced to materiality, going concern, substance over form, prudence, accruals, and other similar accounting concepts.
C- The use of double-entry and accounting systems
The third section of this course will introduce the students to the very important concept of double-entry bookkeeping. Students will need to learn, understand and apply this concept. This section will cover the need for double entry and maintenance of proper accounting records and sources of accounting information.
Students will learn double-entry bookkeeping principles including maintenance of accounting records and sources of accounting information. The need and importance of keeping and maintaining proper accounting records will be covered in this section followed by ledger accounts including purchase ledger, sales ledger. Students will be required to identify types of ledgers and their books of prime entry and proper accounting treatment of different transactions.
This section will require students to understand and illustrate the uses of journals and the posting of journal entries into ledger accounts. Students will need to be able to pass transactions in the books of prime entry, ledgers, and close of the ledger and balance the trial balance.
D- Recording transactions and events
This is the fourth section of this course and it covers the treatment and classification of different categories of transactions.
Students will need to understand and have technical proficiency in identifying the correct accounting treatment and passing the related entries for sales and purchases. Students will need to understand the correct accounting treatment of sales returns, purchase returns, discounts allowed and discounts received.
Students will need to learn and understand the need for petty cash accounts and pass correct accounting entries for cash.
This section will introduce the concept of inventory and inventory valuation. Students will learn how to pass related accounting entries and understand why and how inventory required adjustments. Different methods for inventory valuation such as FIFO, LIFO, and AVCO will be covered; perpetual and periodic methods of recording inventory will be covered. Students will learn IASB treatment for inventory. Students will learn to recognize which costs should be included in inventory valuation, understand the impact on inventory valuation of accounting concepts.
This section will also introduce the concept of Current and Non-Current assets, their proper accounting treatment beginning from purchase, revaluation and disposal and profit/loss of non-current assets. Students will be required to explain and understand the difference between capital and revenue expenditure. Correct accounting treatment of depreciation will also be covered and the concept of depreciation will be further studied in detail.
The concept of intangible non-current assets will be introduced along with proper accounting treatment and amortization of intangibles. The matching concept introduced in the earlier section will be further built upon and correct accounting treatment will be covered. Students will learn the difference between receivables and payables and the correct accounting treatment of the provision of doubtful debts will be covered under this section.
This section will also introduce the concepts of “provision” and “contingencies: and their correct accounting treatment. Students will also be required to learn and understand what makes up the capital structure of a company and how to record changes in the capital structure.
E- Preparing a trial balance
This section will cover the trial balance in depth. Students will be required to identify and correct various accounting errors and record them in suspense account when needed. Control accounts will be introduced and the students will be required to have technical proficiency in preparing control accounts. Bank reconciliation as a topic will also be introduced. Students will be required to learn, understand and draw up bank reconciliations.
F- Preparing basic financial statements
This is the sixth section of this course and it introduces the students to the basics of preparing financial statements including the statements of financial position, statements of profit or loss and other comprehensive income, disclosure notes, identification and correct treatment of events after the reporting period, statements of cash flows and incomplete records.
G- Preparing simple consolidated financial statements
The seventh section of this course introduces the students to consolidated financial statements.
H- Interpretation of financial statements
The final section of this course will introduce the students to the importance and need for interpretation and analysis of financial statements. Financial ratios will be introduced and students will be required to have technical proficiency in calculating the ratios and analyzing the results.
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