The aims of this module are:

To enable students to extend their Knowledge and Understanding achieved in Financial Accounting Fundamentals.

To introduce and develop more advanced Financial Accounting practices over a range of topic areas.

To develop student competence in the Analysis and Interpretation of Financial Statements.

The knowledge, understanding and cognitive, practical and transferable skills which a student is expected to be able to demonstrate after studying this module is expressed in the following learning outcomes. These are grouped under appropriate syllabus headings.

Partnerships and Business Amalgamations (50 Hours / Three Weeks)

By the end of this Syllabus Topic the student will be able to:

Prepare the accounts dealing with the purchase of a Sole Trader’s business by a Partnership, showing the entries in the books of both the Vendor and the Purchaser

Prepare the accounts dealing with the purchase of one Partnership business by another, showing the entries in the books of both the vendor and the purchaser

Prepare accounts dealing with the Amalgamation of one or more Sole Traders to form a Partnership, showing the closing entries in the books of the old business and the opening entries in the new.

Make appropriate entries in the books of a Partnership to record the Admission of a new Partner.

Make appropriate entries in the books of a Partnership, including entries in the Partners’ Capital and Current Accounts, to deal with the retirement of a Partner

Prepare the closing entries in the books of a Partnership, including entries in the Partners’ Capital and Current Accounts showing the Dissolution of a Partnership, including those occasions where one or more of the Partners is insolvent i.e. Garner V Murray

Prepare accounts for the conversion of a Partnership into a Limited Company and differentiate between pre and post incorporation profits

Prepare accounts showing the distribution of shares and cash between shareholders of Partners when a new company takes over the Assets and Liabilities and pays in cash, shares or cash and shares

By the end of this Syllabus Topic the student will be able to:

Account for Provisions and Reserves showing how alterations in either can be achieved and how such alterations will affect the Capital Structure of the Company

Explain Share Premium Account and the uses to which it can be put

Explain Capital Redemption Reserve and Revaluation Reserve

Deal with the Issue and Redemption of Shares and Debentures to include those issued at a Premium, Bonus Issues and Rights Issue

Prepare Financial Statements for Companies in accordance with Current Practice and Regulations

Demonstrate an understanding of the role of the Legal and Regulatory Framework of accounting as it relates to Limited Companies

By the end of this Syllabus Topic the student will be able to:

Select and apply appropriate Accounting Ratios to the solution of business problems.

Apply Financial Ratios and statements of changes in Liquid Assets to business problems.

Understand the need for Accounting for price level changes in relation to statements prepared under the Historic Cost Convention.

Assessment

Achievement of these Learning Outcomes will be reflected in student responses to a 
THREE HOUR OPEN BOOK Examination.

Examination Structure

Five Compulsory Questions

Partnerships and Business Amalgamations (weighted 25%)
 

Three Questions involving Limited Companies (weighted 5% each)
Analysis and Interpretation of Financial Statement (weighted 30%)

Indicative Reading
Current Editions of the following Textbooks are recommended.
 
Textbooks:

Elliott B and Elliott J “Financial Accounting and Reporting” Prentice Hall
Lewis R and Pendrill D “Advanced Financial Accounting” FT Pitman
Blake J “Accounting Standards” FT Pitman
 

Journals:

Financial Accountant
Accountancy
Accounting and Business Research
Journal of Accountancy