FINANCIAL ACCOUNTING

TÀI LIỆU HỌC TẬP

ACCA, 2021-2022, Study
Text, Financial Accounting,
BBP

01 GIÁO TRÌNH VÀ NGÔN NGỮ ACCA, 2021-2022, Practice

and Revision Kit, Financial
Accounting, BBP
02 Bà i giả ng điện tử : in bài giảng
Dictionary of financial
accounting
03 Sá ch trắ c nghiệm, bà i tậ p

04 Bà i tậ p nhó m (chia nhóm), tình huố ng,...

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QUY ĐỊNH HỌC TẬP

01 Đi họ c đầ y đủ , đú ng giờ
02
Nghỉ họ c
03
Tinh thầ n họ c tậ p
04
Bà i kiểm tra, điểm

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 CHAPTER 1: OVERVIEW OF
FINANCIAL ACCOUNTING

OVERVIEW OF FINANCIAL ACCOUNTING

Financial Accounting Kế toá n tà i chính Going Concern Assumption Hoạ t độ ng
Qualitative Đặ c điểm thô ng tin kế toá n Accruals Basis Cơ sở dồ n tích
Characteristic
s
Financial Transactions Giao dịch kế toá n Understandability Dễ hiểu
Double Entry Nguyên tắ c bú t Relevance Sự thích hợ p
Bookkeepin toá n kép
g
Recording Transactions Ghi nhậ n nghiệp vụ Reliability Đá ng tin cậ y

Suppliers Nhà cung cấ p Faithful Presentation Sự trình bà y trung thự c

Customers Khá ch hà ng Comparability Có thể so sá nh

The Khung phá p lý Consistency Nhấ t quá n
Regulatory
Framework
Fair Presentation Trình bà y hợ p lý Neutrality Tính khá ch quan

Materiality Tính trọ ng yếu Completeness Tính đâ ỳ đủ

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 1.1: THE CONTEXT AND PURPOSE
OF FINANCIAL REPORTING

OVERVIEW OF
FINANCIAL
ACCOUNTING

The context and The qualitative The use of double-

purpose of characteristics of entry and
financial financial accounting systems
reporting information
Sources,
Ledger
records
Introductio The accounts From trial
and
n to regulatory and balance to
books of
accounting framework double FS
prime
entry
entry

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 1.1 The purpose of financial reporting

FINANCIAL ACCOUNTING AND MANAGEMENT ACCOUNTING

Financial Management
accounting accounting

PURPOSE

Financial accounting Management accounting

Planning and Decision

Financial Financial
controlling activities making
performance position

External users Internal users

Historical information Budgets/Forecasts

Financial statements Management reports

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Financial reporting is a way of
recording, analysing and
summarising financial data

Financial data is the name given to the

actual transactions carried out by a
business
eg: sales of goods, purchases, payment…

Totals are posted

Books of Ledger Financial

Transactions prime accounts statements
entry

Recorded and analysed Summaried in

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 The trial balance

Outcomes

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 Three main types
of business entity

LIMITED LIABILITY
SOLE TRADERS COMPANIES PARTNERSHIPS

1.2: REGULATORY FRAMEWORK

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 Develops
IFRSs

- 28 IASs
- 16 IFRSs

The IASB (International Accounting Standards

Board) develops IFRSs.

The main objectives of the IFRS Foundation are to

raise the standard of financial reporting and
eventually bring about global harmonisation of
accounting standards.

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 Revision

QUESTION 1 Which of the following is NOT a component of

financial statements?
A. A statement of comprehensive income
B.A statement of changes in equity
C.A cash flow forecast.
D.Accounting policies and explanatory notes.

Revision
QUESTION 2 Which of the following statements is/are true?
1. The directors of a company are ultimately responsible for the preparation of
financial statements, event if the majority of the work on them is performed by
the finance department.
2. If financial statements are audited, then the responsibility for those
financial statements instead falls on the auditors instead of the directors.
3. There are generally no laws surrounding the duties of directors in
managing the affairs of a company.
A. 1 only
B. 1 and 2 only
C. 1, 2 and 3
D. 1 and 3 only

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 Revision
QUESTION 3 Which of the following are advantages of trading as a
limited liability company?
1. Operating as a limited company makes raising finance easier because
additional shares can be issued to raise additional cash
2. Operating as a limited company is more risky than operating as a sole
trader because the shareholders of a business are liable for all the debts of the
business whereas the sole trader is only liable for the debts up to the amount
he has invested
A. 1 only
B. 2 only
C. Both 1 and 2
D. Neither 1 and 2

1.3 THE QUALITATIVE CHARACTERISTICS

OF FINANCIAL INFORMATION

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 The qualitative characteristics of FI
Conceptual
Qualitative Framework Balance
characteristics Elements of sheet
Financial
Income
statements
Fundamental Enhancing statement
qualitative qualitative Statement of
characteristics characteristics Recognition
Cash flows

Faithful Statements of
Comparability Consistency Measurement changes in
representation
equity
Fair Underlying
Verifiability Notes to FS
presentation assumptions
Going
Relevance Timeliness concern

Understanda Accruals
Materiality bility basis

The qualitative characteristics of FI

Fundamental Definition
quality
characteristics
Relevance ► Financial information is capable of making a difference in
decisions if it has predictive value, confirmatory value or
both.
Faithful ► To be a faithful representation information must be
representation complete, neutral and free from error.

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 The qualitative characteristics of FI
Enhancing Definition
quality
characteristics
Comparability ► Consistency refers to the use of the same methods for the
same items (i.e consistency of treatment) either from period to
period within a reporting entity or in a single period across
entities
Verifiability ► Assure users that information faithfully represents the
economic phenomena it purports to represent

The qualitative characteristics of FI

Enhancing Definition
quality
characteristics
Timeliness ► having information available to decision-makers in time to be
capable of influencing their decisions. Generally, the older
information is the less useful it is.

Understandability ► Financial reports are prepared for users who have a

reasonable knowledge of business and economic activities and
who review and analyze the information diligently.

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 Revision
QUESTION 4:
Which accounting concept requires that
foreseen losses should be anticipated
and taken into account immediately
A. The consistency concept
B. The accruals concept
C. The prudence concept
D. The going concern concept

Revision
QUESTION 5: Which of the following
items is not an enhancing qualitative
characteristic of useful financial
information as started in the IASB
Framework?
A. Comparability
B. Timeliness
C. Faithful representation
D. Understandability

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1.4 THE USE OF DOUBLE ENTRY AND
ACCOUNTING SYSTEMS

1.4.1: SOURCES, RECORDS AND BOOKS OF

PRIME ENTRY

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Quotation /kwəʊˈteɪʃ Bả ng bá o Various /ˈveə.ri.əs/ Khá c nhau
n/ giá

Receipt /rɪˈsiːt/ Biên lai Cross refer /krɒs.rɪˈfɜːr/ Tham khả o chéo

Goods /ɡʊdz/ Hà ng đã gử i Payment /ˈpeɪmənt Thanh toá n đã

despatched /dɪˈspætʃ/ received rɪˈsiːvd/ nhậ n

Description /dɪˈskrɪp.ʃ Mô tả Establish /ɪˈstæb.lɪʃ/ Thiết lậ p/Thà nh

n/ lậ p
Required /rɪˈkwaɪə Yêu cầ u
d/

Statement /ˈsteɪtmənt Bả n bá o cá o Credit note /ˈkredɪt nəʊt/ Giấ y bá o có

/
Detail /ˈdiːteɪl/ Chi tiết Contain /kənˈteɪn/ Bao hà m
Invoice /ˈɪnvɔɪs/ Hó a đơn Goods /ɡʊdz rɪ Hà ng trả lạ i
returned ˈtɜːnd/

Value /ˈvæljuː/ Giá trị Quantity /ˈkwɒntəti/ Định lượ ng

Payment /ˈpeɪmənt Thanh toá n Sales tax /ˈseɪlz tæks/ Thuế doanh thu
made meɪd/ đã thự c hiện
Refund /ˈriːfʌnd/ Hoà n tiền Terms of /ˌtɜːmz əv Điều khoả n tín
credit ˈkredɪt/ dụ ng
Amount /əˈmaʊnt Số tiền thiếu Regard /rɪˈɡɑːd/ Sự liên quan đến
owing ˈəʊɪŋ/ nợ

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 Business transactions
Business transactions

Cash Credit Discounts

transactions transactions

Cash
Cash
transactions

Sole goods
Purchased
for cash at goods for
$1,000. cash $50

Cash Cash
sales purchases

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 Credit
transactions

Sole goods on Bought goods

credit for $5,500 on credit $110
including 10% including sales
sales tax tax of 10%

Credit
Credit purchases
sales

Discounts

Discount Discount
received allowed

Cash
Trade
discounts
discounts

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 Sources of documents

Documents Content Purpose

Quotation Quantity/description/details of To establish price from
goods required. various suppliers and
cross refer to purchase
requisition

Purchase Details of supplier, e.g. name, Sent to supplier as

order address.
Quantity/description/details of
goods required and price.
Terms and conditions of
delivery, payment, etc.
request for supply. To
check to the quotation
and delivery note.

Documents Content Purpose

Receipt Details of payment Issued by the selling
received. company indicating the
payment received.
Goods Details of supplier, e.g. Provided by supplier.
dispatched name and address. Checked with goods
note – GDN Quantity and received and purchase
description of goods order.

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Documents Content Purpose
Goods Quantity and Produced by company receiving the
received description of goods. goods as proof of receipt. Matched with
note (GRN) delivery note and purchase order.

Invoice Name and address of Issued by supplier of goods as a

supplier and request for payment. For the supplier
customer; details of selling the goods/services this will be
goods, e.g. quantity, treated as a sales invoice. For the
price, value, sales customer this will be treated as a
tax, terms of credit, purchase invoice.
etc.

Documents Content Purpose

Statement Details of supplier, name and
address. Date, invoice numbers
and values, payments made,
refunds, amount owing.
Credit note Details of supplier, name and
address.
Contains details of goods
returned, quantity, price, value,
sales tax, terms of Credit.
Issued by the supplier.
Checked with other
documents to ensure that
the amount owing is
correct.
Issued by the supplier.
Checked with documents
regarding goods returned.

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Documents Content
Debit note Details of the supplier.
Contains details of goods
returned, e.g. quantity,
price, value, sales tax,
terms of credit, etc.
Remittance Method of payment,
advice invoice number, account
number, date, etc.
Books of prime entry
Books of prime entry
Sales day book
Purchases day book
Sales returns day book
Purchases returns day book
Cash book
Petty cash book
The journal
Purpose
Issued by the company
receiving the goods. Cross
referred to the credit note
issued by the supplier.
Sent to supplier with, or as
notification of, payment.
Transaction type
Credit sales
Credit purchases
Returns of goods sold on credit
Returns of goods bought on credit
All bank transactions
All small cash transactions
All transactions not recorded elsewhere
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Revision
QUESTION 6: State which books of prime entry the following
transactions would be entered into.
Transactions Book of prime entry
Your business pays A Brown (a supplier) $450
You send D Smith (a customer) an invoice for $650
Your accounts manager asks you for $12 urgently in order to
buy some envelopes
You receive an invoice from A Brown for $300
You pay D Smith $500
F Jones (a customer) returns goods to the value of $250
You return goods to J Green to the value of $504
F Jones pays you $500

1.4.2: LEDGER ACCOUNTS AND

DOUBLE ENTRIES

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 Ledger Account
►Nominal ledger (General ledger/GL) is an
accounting record which contains the principle
accounts and which summarizes the financial affairs of
a business
►The method used to summarise these records:
ledger accounting and double entry.
►Format of a nominal ledger
Account Name

Dr Cr

The accounting equation

ASSETS = CAPITAL + LIABILITIES

The Business Equation

CLOSING OPENING
NET INTRODUCED
NET PROFIT DRAWINGS
ASSETS CAPITAL
ASSETS

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 Concepts Description
Stocks/Inventories Unsold goods
Account Amounts owed to the business by its customers
receivables (AR)
Account payables Amount owed by the business to its suppliers
(AP)

Retained earnings Profit generated from operation by a business but not yet
(RE) distributed to its owners

Drawings Amounts of money or assets taken out of a business by its

owners

Gross profit Gross profit = Sales – Cost of goods sold (COGS) Net
profit Net profit = Gross profit – Expenses

Double Entry Bookkeeping

Dual effect (duality concept)

► Double entry bookkeeping is the method used to transfer the
weekly/monthly totals from the books of prime entry into the nominal
ledger.

► Every accounting event must be entered in ledger accounts both as a

debit and as an equal but opposite credit.

► The duality concept means that each transaction will affect at least two
ledger accounts.
Total DR side = Total CR side (balance)

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Double Entry Bookkeeping
Double entry
Double entry for typical transactions Debit Credit
(DR) $ (CR) $
Sales transactions

Cash sales
Sold goods for cash at $ 1,000
Cash at bank 1,000
Sales 1,000
Credit sales
Sold goods on credit for $ 1,175 including 17.5%
sales tax 1,175
Trade receivables 1,000
Sales 175
Sales tax-output

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 Double entry
Double entry for typical transactions Debit Credit
(DR) $ (CR) $
Purchase transactions

Cash purchases
Payment of a purchase billed totaling $ 1,175 including
sales tax of 17.5% 1,000
Purchase (Inventory) 175
Sales tax – Input 1,175
Cash at bank
Credit purchase
Bought goods on credit $ 1,175 including sales tax of
17.5% 1,000
Purchases 175
Sales tax – Input 1,175
Trade payables

Double entry
Double entry for typical transactions Debit Credit
(DR) $ (CR) $
Receipt from credit customers
A customer paid $ 1,100 to totally clear his debt
Cash at bank 1,100
Trade receivables 1,100

Payment to suppliers
A payment of $ 1,100 for the company’s AP
Trade payables 1,100
Cash at bank 1,100

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 Balancing off a ledger account

Once the transactions for a period have been recorded, it will be

necessary to fin the balance on the ledger account:
1. Total both sides of the T-account and find the larger total.
2. Put the larger total in the total box on the debit and credit side
3. Insert a balancing figure to the side of the T-account which
does not currently add up to the amount in the total box. Call this
balancing figure “balance c/f” (carried forward) or “balance c/d”
(carried down).
4. Carry the balance down diagonally and call it “balance b/f”
(brought forward) or “balance b/d” (brought down).

Example 1
Payables ledger account

$ $
Bank 68,900 Balance b/f 34,500
Discounts received Purchase 78,400
1,200 (credit)
Purchase returns 4,700
Balance c/f
38,100

112,900 112,900
Balance b/f 38,100

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 1.4.3: FROM TRIAL BALANCE TO
FINANCIAL STATEMENTS

The Trial Balance (TB)

At suitable intervals, the entries in each ledger account are totaled and a
balance is struck. Balances are usually collected in a trial balance which is then used
as a basis for preparing a statement of profit or loss and a statement of financial
position.

A trial balance is a list of ledger balances shown in debit and credit columns.
Steps to prepare the Trial Balance (TB):
► Step 1: Collect of ledger accounts
► Step 2: Balance ledger accounts
► Step 3: Collect the balances
► Step 4: Check and reconcile

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