Summary FRK 111: An Introduction to the understanding of Accounting
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Course
FRK 111
Institution
FRK 111
The document provides a comprehensive overview of accounting principles and practices covered in chapters 1 to 10. It covers topics such as the fundamentals of accounting, the accounting equation, double-entry bookkeeping, recording transactions, adjusting entries, financial statements, inventory v...
an introduction to the understanding of accounting
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FRK 111
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FRK 111
An Introduction to the understanding of Accounting
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Table of Contents
Nature and function of Accounting.............................................................................................................4
I. History and Development of Accounting..............................................................................................4
II. What is accounting?.............................................................................................................................4
III. What is an Entity?...............................................................................................................................4
IV. Financial Statements..........................................................................................................................5
Chapter 2: Financial Position as Reflected in the Statement of Financial Position......................................5
I. The Statement of Financial Position.....................................................................................................5
II. Elements of the Statement of Financial Position.................................................................................5
III. Analyzing Financial Position through the Statement of Financial Position.........................................6
Chapter 3: Statement of Profit or Loss and Other Comprehensive Income.................................................7
II. Elements of the Statement of Profit or Loss and Other Comprehensive Income................................9
III. Analysis of the Statement of Profit or Loss and Other Comprehensive Income...............................10
Chapter 4: The Recording Process.............................................................................................................11
I. Calculations in the Recording Process.................................................................................................11
II. Transactions and Source Documents.................................................................................................12
III. Journals.............................................................................................................................................12
IV. Ledgers.............................................................................................................................................13
V. Trial Balance......................................................................................................................................13
VI. Inventory System..............................................................................................................................13
Chapter 5: Value Added Tax (VAT).........................................................................................................14
I. Terminology........................................................................................................................................14
II. What is VAT?......................................................................................................................................14
III. Who Registers for VAT?....................................................................................................................14
IV. How Does VAT Work?.......................................................................................................................14
V. Calculations.......................................................................................................................................15
VI. Treatment of VAT.............................................................................................................................15
VII. Calculating Amount Payable............................................................................................................16
Chapter 6: Internal Control: Debtors, Creditors, and Cash........................................................................16
I. Terminology........................................................................................................................................16
II. Objectives of Internal Control............................................................................................................16
III. Internal Control Techniques for Different Assets..............................................................................17
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IV. Reconciliation...................................................................................................................................18
Chapter 7: Trial Balance and Correction of Errors.....................................................................................18
I. Introduction........................................................................................................................................18
II. Preparation of the Trial Balance........................................................................................................19
III. Correction of Errors..........................................................................................................................19
Chapter 8: Adjustments.............................................................................................................................20
I. Terminology........................................................................................................................................20
II. Specific Types of Adjustments...........................................................................................................20
III. Post-Adjustment Trial Balance..........................................................................................................21
IV. Conclusion........................................................................................................................................21
Chapter 9: The Closing Process..................................................................................................................21
I. Introduction........................................................................................................................................22
II. Closing Process for Trading Entity (Periodic Inventory System).........................................................22
III. Closing Process for Trading Entity (Perpetual Inventory System).....................................................22
IV. Profit or Loss Account.......................................................................................................................23
V. Reversals of Adjustments..................................................................................................................23
Chapter 10: Financial Statements of a Sole Trader....................................................................................23
I. Financial Statements...........................................................................................................................23
II. Effect of Adjustments on Financial Statements.................................................................................24
III. Examples of Adjustments..................................................................................................................24
IV. Post-Adjustment Trial Balance..........................................................................................................25
V. Financial Statements.........................................................................................................................25
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