FAC1601
NOTES
, HOW TO PASS FAC1601
Going over the past papers allows you to understand what is expected of you in the
exam.
Practice, practice, practice – PRACTICE.
MOST IMPORTANT: KNOW your formats off by heart!!!
The following are sections of the work I would recommend concentrating on:
1. Partnerships:
1.1 Liquidation of partnerships (simultaneous & piecemeal)
1.2 1st interim repayment
1.3 Profit-sharing ratios
1.4 Financial Statements (ALL)
1.5 Valuation Account & Capital & Current Accounts
2. Close Corporations
2.1 Financial Statements (ALL)
3. Cash Flow Statements (Direct & indirect Method)
4. Companies
4.1 General Journal entries (Shares)
4.2 Capitalisation Shares
5. Branches
5.1 Branch Accounts (at cost price & at selling price) Financial Statements & Bank
Account
6. Analysis & interpretation
6.1 Calculation & interpretation of ratios
TIME ALLOCATION (Stick to it)
If you haven’t finished it YET…. MOVE ON
Do the questions you feel you know best first. Take 5 minutes to check through the
paper before you start.
Do not panic! Although it’s a fairly long paper, by getting worked up, 1 tends to get
careless and make unnecessary mistakes.
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, STUDY NOTES
I received the following notes from a fellow student.
Study Unit 1:
Introduction to the preparation of financial statements
Intro
The Framework “conceptual framework” sets out the objectives and concepts that
underlie the preparation and presentation of financial statements. Prescriptive
(Normative) and Descriptive (explanatory) in nature.
The two main purposes
• To assist the accountant in preparing and presenting financial statements
• To serve as a general guideline to the users of financial statement in understanding
the latter
Issued by the International Accounting Standards Board (IASB) and adopted by the
Accounting Practices Board (APB) in South Africa and applies to most business (profit &
non-profit)
Financial Statements as part of Financial Reporting
The framework gives a descriptive approach as to what constitutes financial statements.
It excludes reports from directors, chairman of the company and similar items but
management has primary responsibility for the preparation and presentation of the
financial statements of the entity.
Objective of financial statements
It is to provide information about the financial position (plus change in position) and
financial performance to users of the information. It includes
• Balance Sheet: Financial Position of the entity
• Income Statement: Financial Performance of the entity
• Statement of Changes in equity: Changes in capital structure
• Cash Flow Statement: Changes in the financial position of the entity
Notes: Relevant additional information to give a clearer picture
Underlying assumptions when preparing financial statements
• Accrual Basis: the effects of transactions are recognized when they occur, Occur:
When transaction initially takes place.
Going Concern: it will continue operations for the foreseeable future. If not then the
“Framework” provides a structure
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NOTES
, HOW TO PASS FAC1601
Going over the past papers allows you to understand what is expected of you in the
exam.
Practice, practice, practice – PRACTICE.
MOST IMPORTANT: KNOW your formats off by heart!!!
The following are sections of the work I would recommend concentrating on:
1. Partnerships:
1.1 Liquidation of partnerships (simultaneous & piecemeal)
1.2 1st interim repayment
1.3 Profit-sharing ratios
1.4 Financial Statements (ALL)
1.5 Valuation Account & Capital & Current Accounts
2. Close Corporations
2.1 Financial Statements (ALL)
3. Cash Flow Statements (Direct & indirect Method)
4. Companies
4.1 General Journal entries (Shares)
4.2 Capitalisation Shares
5. Branches
5.1 Branch Accounts (at cost price & at selling price) Financial Statements & Bank
Account
6. Analysis & interpretation
6.1 Calculation & interpretation of ratios
TIME ALLOCATION (Stick to it)
If you haven’t finished it YET…. MOVE ON
Do the questions you feel you know best first. Take 5 minutes to check through the
paper before you start.
Do not panic! Although it’s a fairly long paper, by getting worked up, 1 tends to get
careless and make unnecessary mistakes.
Downloaded by: pthemba03 |
Distribution of this document is illegal
, STUDY NOTES
I received the following notes from a fellow student.
Study Unit 1:
Introduction to the preparation of financial statements
Intro
The Framework “conceptual framework” sets out the objectives and concepts that
underlie the preparation and presentation of financial statements. Prescriptive
(Normative) and Descriptive (explanatory) in nature.
The two main purposes
• To assist the accountant in preparing and presenting financial statements
• To serve as a general guideline to the users of financial statement in understanding
the latter
Issued by the International Accounting Standards Board (IASB) and adopted by the
Accounting Practices Board (APB) in South Africa and applies to most business (profit &
non-profit)
Financial Statements as part of Financial Reporting
The framework gives a descriptive approach as to what constitutes financial statements.
It excludes reports from directors, chairman of the company and similar items but
management has primary responsibility for the preparation and presentation of the
financial statements of the entity.
Objective of financial statements
It is to provide information about the financial position (plus change in position) and
financial performance to users of the information. It includes
• Balance Sheet: Financial Position of the entity
• Income Statement: Financial Performance of the entity
• Statement of Changes in equity: Changes in capital structure
• Cash Flow Statement: Changes in the financial position of the entity
Notes: Relevant additional information to give a clearer picture
Underlying assumptions when preparing financial statements
• Accrual Basis: the effects of transactions are recognized when they occur, Occur:
When transaction initially takes place.
Going Concern: it will continue operations for the foreseeable future. If not then the
“Framework” provides a structure
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