General Objective

This paper is intended to introduce the candidate to the overall objective of accounting, regulations, the accounting treatment and presentation of basic transactions and preparation and analysis of financial statements.


Learning Outcomes

A candidate who passes this paper should be able to:

  1. Prepare books of original entry and basic ledger accounts under the double entry system
  2. Prepare basic financial statements of sole traders, partnerships, companies, manufacturing entities and not for profit organizations
  3. Comply with the regulatory framework in the accounting field
  4. Analyse financial statements by use of ratios and statement of cash flows




1.Introduction to Accounting

1.1 Nature and Purpose of Accounting

1.2 The objective of Financial Accounting

1.3 The Elements of Financial Statements

1.4 The Accounting Equation

1.5 The Users of Accounting Information


2.The Accounting Process and Systems

2.1 The Source documents such as receipts and invoices

2.2 The Books of Prime entry/Original Entry from the journals, cashbooks ,Petty cash books and registers

2.3 The Ledger and the concept of double entry

2.4 The Trial Balance

2.5 The Financial Statements


  1. Regulation and other principles guiding the accounting profession

3.1 The legal sources of regulation

3.2 The Professional sources of regulation (Local and international bodies) and Ethics

3.3 Accounting Standards

3.4 Common accounting principles/concepts

3.5 Qualities of useful financial information


  1. Accounting for Assets and Liabilities

4.1 Property, Plant and Equipment (depreciation, acquisition, disposal, exchange, excluding revaluations)

4.2 Intangible Assets

4.3 Financial Assets and Financial Liabilities (Definition, Examples and Classification only)

4.4 Inventory

4.5 Cash in hand and cash at bank  ( bank reconciliation statements)

4.6 Trade Receivables (Measurement and credit Losses)

4.7 Trade payables

4.8 Accrued Incomes/Expenses and Prepaid Incomes/Expenses

  1. Financial Statements of a sole trader

5.1 Statement of Profit or Loss

5.2 Statement of Financial Position


  1. Financial Statements of a partnership

6.1 The partnership deed/agreement

6.2 The statement of Profit or Loss and appropriation

6.3 Partners’ capital and current accounts

6.4 The statement of financial position

6.5 Accounting treatment and presentation when there is a change in profit/loss sharing ratio, admission/retirement of a partner, dissolution of a partnership etc


7.Financial Statement of a Company

7.1 Important concepts of a company (Ordinary and Preference share capital, issuing new shares by way of full market price, bonus shares and rights issue, Reserves, retained profits and corporation tax)

7.2 Statement of Profit or Loss

7.3 Other comprehensive incomes

7.4 Statement of Financial Position

7.5 Statement of Cash flows


  1. Financial Statements of a manufacturing entity

8.1 Manufacturing Statement for production

8.2 Statement of Profit or Loss

8.3 Statement of Financial Position


  1. Statements of a not-for-profit entity

9.1 Objectives of Not- for- profit organizations

9.2 Statement of Incomes and Expenditures

9.3 Statement of Financial Position


  1. Correction of errors and preparing financial statements with incomplete records

10.1 Types and causes of errors

10.2 Correcting errors in source documents, the books of prime entry, the ledger, the trial balance and financial statements.

10.3 Reasons for incomplete information.

10.4 Preparation of financial statements from incomplete information.


  1. Analyzing Financial Statements

11.1 The objective of analyzing financial statements

11.2 Analyzing financial statements using financial ratios (Liquidity, Profitability, Solvency, Efficiency, Investor/Value and Cash Flow categories)


  1. Accounting in the Public Sector

12.1Features of public sector entities (as compared to private sector)

12.2 Structure of the public sector (National and county governments, State Corporations,  Departments and Agencies)

12.3 Regulation and oversight (International Public Sector Accounting Standards Board, Director of Accounting Services, National Treasury, Parliamentary Committees, Accounting Officers at national and county levels)

12.4 Objectives of public sector financial statements and Standards (IPSAS)

12.5 Accounting techniques in public sector such as budgeting, cash, accrual, commitment and fund accounting)


  1. Wood, F & Robinson, S. (2013). Book-Keeping and Accounts (8thed.). Harlow, England: Financial Times Press/Pearson Education Ltd.
  2. Glautier, M., Underdown, B., & Morris, D. (2011). Accounting: theory and practice (8thed.). Harlow, England: Financial Times Press/Pearson Education Ltd.


  1. Sangster, A. & Wood, F. (2012). Frank Wood’sBusiness Accounting Volume 1 (12thed.) Harlow, England: Financial Times Press/Pearson Education Ltd.



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