C3-Accounting for Tax Practitioners

C3-ACCOUNTANCY FOR TAX PRACTITIONERS

This Paper assumes elementary knowledge of accounting and focuses on interpretation of financial statements for tax purposes. It covers topics such as Company accounts, preparation of accounts from incomplete records, Ratio Analysis, Cash Flow Statements and the Regulatory Framework of Financial Accounting.

Objectives

A student who has successfully completed this subject should have:

1. A knowledge of accounting concepts relating to the preparation of the Balance Sheet, Income Statement and Cash Flow Statements;
2. The ability to effectively interpret financial reports and supporting notes;
3. The ability to calculate and interpret financial reporting ratios;
4. The ability to understand accounting issues in commercial transactions; and
5. An awareness of the limitations of financial reports.

Structure of the examination paper

There shall be a three hour examination consisting of five (5) compulsory questions of twenty (20) marks each. Candidates will be allowed fifteen minutes’ reading and planning time.

Detailed Syllabus

• UNIT 1 - NATURE OF ACCOUNTING

• Element 1: The Meaning of Accounting
• Element 2: The role of Accounting in the management of organizations
• Element 3: Users of Accounting Information
• Element 4: The Principal Financial Statements
• Element 5: The Role of the Accountant

• UNIT 2 - THE LEGAL & REGULATORY FRAMEWORK

• Element 1: Introduction
• Element 2: Company Law
• Element 3: Accounting Standards
• Element 4: The Lusaka Stock Exchange
• Element 5: The International Influences

• UNIT 3-THE FRAMEWORK OF FINANCIAL ACCOUNTING

• Element 1: Fundamental Accounting concepts
• Element 2: The Accounting Equation
• Element 3: The principle of double entry bookkeeping
• Element 4: Type of financial statements and their tax implications.
• Element 5: The Distinction between Profit & Cash
• Element 6: Distinction between capital and revenue items

• UNIT 4-THE BALANCE SHEET & INCOME STATEMENT

• Element 1: Purpose and Layout of the Balance Sheet
• Element 2: Assets
• Element 3: Liabilities
• Element 4: Capital
• Element 5: Layout of the Trading Account
• Element 6: Layout of the Profit and Loss Account
• Element 7: Relationship with the Balance Sheet
• Element 8: Balance Sheet Redrafting (Adjusting for post balance sheet events)

• UNIT 5-FINANCIAL RECORDS

• Element 1: Source Documents
• Element 2: Books of Prime Entry
• Element 3: The Ledger

• UNIT 6 – PREPARATION OF ACCOUNTS FROM A TRIAL BALANCE

• Element 1: The Trial Balance
• Element 2: Trading, Profit & Loss Account
• Element 3: Accounting Process Overview
• Element 4: The Balance Sheet

• UNIT 7-PERIOD END ADJUSTMENTS

• Element 1: Cost of Goods Sold
• Element 2: Accruals and Prepayments
• Element 3: Bad and Doubtful Debts
• Element 4: Depreciation
• Element 5: Stock and their Valuation
• Element 6: Treatment of Current Taxes
• Element 7: Treatment of Deferred Taxes

• UNIT 8-CONTROLLING THE ACCOUNTING SYSTEM

• Element 1: Preventing Errors
• Element 2: Detecting Errors
• Element 3: Bank Reconciliation Statements
• Element 4: Reconciliation of Supplier Statements
• Element 5: Control Accounts
• Element 6: Suspense Accounts and Correction of Errors
• Element 7: Computers in Accounting
• Element 8: Accounting Coding Systems

• UNIT 9-PREPARATION OF ACCOUNTS OF NON-PROFIT ORGANIZATIONS

• Element 1: Preparation of receipt and payment account.
• Element 2: Income and expenditure account
• Element 3: Accumulated Fund
• Element 4: Balance Sheet
• Element 5: Income from Trading Activities

• UNIT 10-PREPARATION OF ACCOUNTS FOR JOINT VENTURE

• Element 1: Principles of joint venture in accounting
• Element 2: Preparation of joint venture accounts

• UNIT 10-PREPARING ACCOUNTS FROM INCOMPLETE RECORDS

• Element 1: Introduction
• Element 2: Use of Control Accounts
• Element 3: Credit Sales and Debtors
• Element 4: Purchases and Trade Creditors
• Element 5: Purchases, Stocks and Cost of Sales
• Element 6: Expenses Figures
• Element 7: Opening Capital
• Element 6: The Cash Book and Bank Account Summaries
• Element 7: Accruals and Prepayments
• Element 8: Drawings Element 9: Comprehensive Approach

• UNIT 11-LIMITED COMPANY ACCOUNTS

• Element 1: Introduction
• Element 2: Framework of Limited Company Accounts
• Element 3: Share Capital & Reserves
• Element 4: The Final Accounts of Limited Companies
• Element 5: Taxation in Company Accounts
• Element 6: Accounting for Dividends
• Element 7: Provisions, Reserves and Liabilities
• Element 8: Published Financial Statements of Limited Companies
• Element 9: Group Financial Statements – an introduction
• Element 10: Consolidated Balance Sheet
• Element 11: Inter- Company Dealings
• Element 12: Consolidated Income Statements
• Element 13: Acquisition of Shares in Associated Companies

• UNIT 12-MANUFACTURING ACCOUNTS

• Element 1: The Need for Manufacturing Accounts
• Element 2: Costs included in the Manufacturing Accounts
• Element 3: Layout of Manufacturing Accounts
• Element 4: Trading Accounts for Manufacturing Companies
• Element 5: Profit & Loss Accounts for Manufacturing Companies
• Element 6: Balance Sheets for Manufacturing Companies
• Element 7: The Accounting System for Manufacturing Companies.

• UNIT 13-CASH FLOW STATEMENTS

• Element 1: Introduction
• Element 2: Profits and Cash flow
• Element 3: Purpose of Cash Flow Statements
• Element 4: The Cash Flow Statement Technique
• Element 5: Advantages & Disadvantages of Cash Flow Statements
• Element 6: IAS 7 - Standard Headings
• Element 7: Treatment of Capital Expenditure & Financial Investments

• UNIT 14-PATNERSHIP ACCOUNTS

• Element 1: Introduction
• Element 2: Partnership Accounts
• Element 3: Goodwill for Sole Traders and Partnerships
• Element 4: Revaluation of Partnership Assets
• Element 5: Dissolution of Partnerships
• Element 6: Conversion of Partnerships into Limited Liability companies

• UNIT 15-INTERPRETATION OF FINANCIAL STATEMENTS

• Element 1: Introduction
• Element 2: Profitability Ratios
• Element 3: Liquidity Ratios
• Element 4: Efficiency Ratios
• Element 5: Capital Structure Ratios
• Element 6: Ratio Analysis of Sole Traders