STRATHMORE UNIVERSITY SCHOOL OF MANAGEMENT AND COMMERCE BACHELOR OF COMMERCE COURSE OUTLINE Unit title and code: BCM

11 1: FUNDAMENTALS OF ACCOUNTING I
Lect!"e": M"# $o%n &ac%!di E'ail: $&ac%!di(St"at%'o"e#ed! Sta))"oo': *%a+e II Ba+e'ent Sta))"oo' in t%e li,"a"Mod!le Leade" Co!"+e De+c"i.tion: The course covers the nature and purpose of accounting. It also provides the necessary knowledge with regard to book keeping, preparation of basic financial statements, adjustments to financial statements, preparation of the cash book, bank reconciliation statement and control accounts, accounting for property, plant and equipment, correction of accounting errors, accounting for sole proprietorships, partnerships and limited companies and the preparation of the extended trial balance. The course aims at providing the students with exposure to the nature, purpose and methodology of accounting as well as the use of accounting information in the business. Ai' : To provide students with exposure to the nature, purpose and methodology of accounting as well as the use of accounting information COURSE OUTCOMES t the end of the course, the learners should be able to: !rite up the books of account of a sole trader and partnership "repare financial statements for a sole proprietor, and a partnership "erform the necessary adjustments to the financial statements accordingly, #xplain, integrate and apply the fundamental accounting principles learnt in real business scenarios and $nderstand the importance of accounting in any business. *"e"e/!i+ite: None Contact Ho!"+: 01 %o!"+ To.ic 1 Content INTRODUCTION TO ACCOUNTING E2.ected Lea"nin3 O!tco'e+ %y the end of this session the learners will be able to: &efine and explain the nature, purpose and scope of accounting, Identify the various qualities of useful accounting information, #xplain and apply the accounting principles in various business contexts. Di+c!++ion To.ic+ 'ature, purpose and scope of accounting, (bjectives of accounting, $sers of accounting information and their respective needs, )ualities of useful accounting information, ccounting principles: *oing concern, ccruals, +onsistency, "rudence, %usiness entity, &uality, ,onetary measurement, -ubstance over form, .eali/ation Cla++ Acti4itie+ Class discussions Class exercises 0

Worked out illustrations Group assignment 1 BOO6 6EE*ING E2.ected Lea"nin3 O!tco'e+ %y the end of this session the learners should be able to: #xplain and conceptuali/e the accounting cycle, "repare books of original entry and perform double entries. "repare ledgers, a simple cash book and the trial balance. Di+c!++ion To.ic+ The accounting cycle, &ouble entry book1keeping and books of original entry, The ledgers, cash book and the trial balance.

Cla++ acti4itie+
Class discussions Class exercises Worked out illustrations Group assignment 2 BASIC FINANCIAL STATEMENTS E2.ected Lea"nin3 O!tco'e+ %y the end of this session the learners should be able to: "repare financial statements for a sole proprietor in accordance with the required format, Di+c!++ion To.ic+ -tructure of financial statements: o -tatement of comprehensive income 2the income statement3 for a sole trader, o -tatement of financial position 2the balance sheet3 for a sole trader.

Cla++ acti4itie+
Class discussions Class exercises Worked out illustrations Group assignment 3 AD$USTMENTS TO FINANCIAL STATEMENTS E2.ected Lea"nin3 O!tco'e+ %y the end of this session the learners should be able to: ,ake the various adjustment to financial statement items inconformity with the accounting concepts discussed in topic one. "repare relatively more complex financial statements for a sole trader. Di+c!++ion To.ic+ +arriage in and carriage out, bad debts, %ad and doubtful receivables, bad debts recovered, drawings, discount received and allowed, accrued and prepaid income and expenses and depreciation and disposal of property, plant and equipment.

Cla++ acti4itie+
Class discussions Class exercises Worked out illustrations Group assignment 4 THE CASH BOO6 E2.ected Lea"nin3 O!tco'e+ %y the end of this session the learners should be able to: Identify and prepare the various types of cashbooks. #xplain the usefulness of preparing the various types of cashbooks to a business. Di+c!++ion To.ic+ 4

Two column cashbook, three column cashbook, analytical cashbook and the petty cashbook.

Cla++ acti4itie+
Class discussions Class exercises Worked out illustrations Group assignment 5 BAN6 RECONCILIATION STATEMENT E2.ected Lea"nin3 O!tco'e+ %y the end of this session the learners should be able to: +ompare the transactions that appear on both the cashbook and the bank statement, Identify the causes of the difference between the cashbook and the bank statement, &ifferentiate between unpresented and uncredited cheques and "repare a bank reconciliation statement. Di+c!++ion To.ic+ "urpose of bank reconciliation +auses of differences between cash and bank balances %ank reconciliation process, %ank overdrafts, and dishonoured cheques

Cla++ acti4itie+
Class discussions Class exercises Worked out illustrations Group assignment 6 CONTROL ACCOUNTS E2.ected Lea"nin3 O!tco'e+ %y the end of this session the learners should be able to: -how the need for maintaining control accounts, "repare a sales and purchases ledger control account. Di+c!++ion To.ic+ $ses of control accounts, -ales and purchases ledger control accounts.

Cla++ acti4itie+
Class discussions Class exercises Worked out illustrations Group assignment 7 *RO*ERTY: *LANT AND E;UI*MENT <**E= E2.ected Lea"nin3 O!tco'e+ %y the end of this session the learners should be able to: Identify the various types of long term assets, &istinguish between capital and revenue expenditure, pply the various methods of estimating depreciation expense, ccount for disposal of assets and Di+c!++ion To.ic+ +lassification of long1term assets, accounting for ""#, revenue and capital expenditure, relevant cost of ""#, methods of estimating depreciation, revaluation method, revaluation of ""#, exchange of assets, disposal of assets, schedule of ""# and presentation and disclosure of ""# in the financial statements.

Cla++ acti4itie+
Class discussions Class exercises 6

>

Worked out illustrations Group assignment 8 ACCOUNTING ERRORS E2.ected Lea"nin3 O!tco'e+ %y the end of this session the learners should be able to: Identify the various types accounting errors, +orrect both accounting errors affecting and not affecting the trial balance, "repare journal entries for correction of the accounting errors. Di+c!++ion To.ic+ Types of accounting errors, errors not affecting the trial balance and errors affecting the trial balance.

Cla++ acti4itie+
Class discussions Class exercises Worked out illustrations Group assignment 9 ACCOUNTING FOR *ARTNERSHI*S E2.ected Lea"nin3 O!tco'e+ %y the end of this session the learners should be able to: &istinguish between a partnership and a sole proprietorship, #xplain the elements of a partnership deed, "repare the partners capital and current accounts, "repare the partnership7s financial statements. Di+c!++ion To.ic+ Introduction to partnerships, partnership agreements, appropriation of profit, personal accounts, partners loan accounts, -tatement of comprehensive incomes 2income statement3 for a partnership, -tatement of financial position 2balance sheet3 for a partnership,

Cla++ acti4itie+
Class discussions Class exercises Worked out illustrations Group assignment 10

Co!"+e Deli4e"- Met%odolo3+lass discussions, 8ectures, !ritten assignments, ssigned readings and exercises

Academic Assessment
Type Examination Coursework CAT 1 (Supervised CAT) CAT 2 (Supervised CAT) CAT 3 (Assignment) Total Weighting (%) 70 30 10 10 10 30 100 %

Co!"+e Mate"ial+
Title :undamentals of ccounting 2,ain text3 'ew Introduction to :inancial ccounting, International #dition. n Introduction to ccountancy, %usiness ccounting, A!t%o" !ang7ombe, &. ;. ,eigs, .obert et al. ,aheshwar, - ' :rank !ood *!,li+%e" :ocus "ublishers 24<<=3 "rentice1@all20>>>3 Cikas "ublishing @ouse 20>>=3 "itman "ublishing 24<<=3 ISBN >>??1<01<=519 <1061?09=A>1B <15<?>1=>4?1< <14561?0>=01<

*olicie+
Cla++e+
1 2 3 Punctuality is !undamental "cti#e participation in class discussions is encouraged $et us re!rain !rom signing t%e attendance register on &e%al! o! colleagues '%o are not present

A++i3n'ent+ and?o" Co!"+e &o"@

0. "lagiarism is a serious offence. If detected in any form in course work and assignments, the following will apply: a. In partial or non1serious cases 2such as not citing whole word1for word quotes3, half the total possible marks of the assignment are duly struck off. b. In serious cases 2such as whole duplication of a paper3, a /ero policy will apply i.e., all offending assignments will be awarded a mark of /ero. 'ote: The level of seriousness referred above is at the discretion of the lecturer. ppeals are certainly possible through relevant channels. 4. 'otwithstanding the above, collaboration in course work is certainly encouraged as this promotes team spirit and group synergy provided originality is preserved.

A..oint'ent+
"lease make these by email whenever possible, though we could set up appointments after lectures. "lease refer to consultation times below for details.

Consultation times
!ednesday 4.0Apm 1A.0Apm