BAC 101: FUNDAMENTALS OF ACCOUNTING II
Lecturer: Dr. Koori J- 0733233551.
3 credit hours/Contact hours: 39
Purpose of the Course
The course main focus is the preparation of
accounting statements of various business
organisations in line with international reporting
standards.
The course is designed to develop the learner with
knowledge, skills and understanding of
fundamental processes, systems, frameworks
and techniques of accounting with a view of
analyzing and interpreting financial statements of
different forms of business organisations.
Course Objectives
3.1.2 Expected Learning Outcomes of the
Course
By the end of this course, the student will be able to:
CLO 1: Demonstrate an appreciation of accounting practices of
different forms of business organizations.
CLO 2: Prepare accounting records of various business
organizations in line with the international reporting
standards.
CLO 3: Analyse financial statements of a business organization
CLO 4: Interpret financial statements of a business organization
(CLO=Course Learning Outcome)
Course Content
TOPIC ONE: INTRODUCTION TO PARTNERSHIP ACCOUNTING
Basic Partnership Accounts:
Partnership agreement
Accounting for partnership accounts
Distribution of profits and loses
Preparation of income statement
Appropriation account
Statement of financial position
Partnership Realignments: (Goodwill and Revaluation of assets)
Admission of a new partner
Retirement of a partner
Cont’d…
TOPIC TWO: COMPANY ACCOUNTS
The financial and legal framework of limited
liability companies
Issue of shares and debentures.
Shares issued at a premium
Shares issued at a discount
Calls in arrears.
Forfeiture
Rights and bonus issue
Cont’d…
TOPIC THREE: MANUFACTURING ACCOUNTS
Manufacturing Account- (cost classification
and apportionment)
Valuation of stocks of finished goods
Trading account
The income statement for manufacturing firm.
The statement of financial position
Cont’d…
TOPIC FOUR: CASH FLOW STATEMENT
Uses of cash flow statement
Structure of cash flow statement as per IAS 7
- Cash flow from operating activities
- cash flow from investing activities
- cash flow from financing activities
Cash flow statement format using direct and
indirect formats.
Cont’d…
TOPIC FIVE: ACCOUNTING FOR NON PROFIT MAKING
ORGANISATIONS
Characteristics of non profit making organizations
Receipts and payments accounts
Income and expenditure accounts
Treatment of peculiar items which include; members’
subscriptions, donations, legacies, entrance/registration fees,
life membership.
Statement of financial position
Cont’d…
TOPIC SIX: BASIC ACCOUNTING RATIOS
Mark ups and margins
i. Turnover ratio, working capital, acid test ratio, stock turnover
ratio, debtors ratio, rate of return on capital, debtors
turnover, sales assets
ii. Merits and demerits of accounting ratios.
Student Assessment and reading materials at course level
Type Weighting
1. Continuous Assessment, assignments and class presentations: 30%
2. End-Semester Examination 70%
Total 100%
Core Reading Materials
•Wangombe, D. (2021). 2nd Edition, Fundamentals of Accounting. Focus Publishers, Nairobi
•Mitchell, F. & LeMoyne, C. (2019). Principles of Accounting Volume 1 Financial Accounting
•Meigs, W. B. & Johnson C. E. (2020) – Accounting for Business Decisions, Mcgraw Hill, New York.
•Frank, W. & Allan, S. (2022). Business Accounting 14 th Edition.
Recommended Reference Materials
•Kermit, D., Heidi, D. & John, H. (2022). 17th Edition, Fundamental Accounting Principles Volume
1. McGraw Hill, New York
•Financial Accounting Study Text-CPA. https://www.academia.edu
