Principles of Accounting

• Credit value: 15 credits at Level 7
• Convenor and tutor: Dr Lorenzo Neri
• Assessment: a two-hour examination (100%)

This module consists of two parts. Part 1 covers the basic principles of financial reporting from which you will be introduced to the techniques of preparing and interpreting financial statements. Part 2 focuses on management accounting information and decision making. Together they provide a foundation in accounting on which you can further explore the world of accounting and finance.

Indicative syllabus

• Introduction to financial accounting
• Accounting concepts
• Double-entry bookkeeping
• Preparation of balance sheets and profit and loss accounts
• Principal sources of finance for companies
• Accounting ratios
• Limitations of conventional financial statements
• Costing for planning
• Decision making and control
• Accounting for materials
• Labour and overheads
• Absorption costing
• Marginal costing and break even analysis
• Budgetary control
• Standard costing and variance analysis
• Cash budgeting and management of working capital

By the end of this module, you will be able to:

• state the uses and users of accounting information
• explain and apply accounting concepts, principles and conventions
• analyse, interpret and communicate the information contained in basic financial statements, and explain the limitations of such statements
• explain the role of management accounting within an organisation and the needs for management information
• discuss the problems of traditional costing system
• apply the marginal costing approach in decision making
• examine the concept of relevant costing
• develop budgets for management purposes.