O LEVEL
ACCOUNTING
REVISION KIT
PREPARED BY:
AHMED SAYA
,Contents
BASIC ACCOUNTING....................................................................................................................................... 4
BOOKS OF ORIGINAL ENTRY / PRIME ENTRY ...............................................................................................11
ADJUSTMENTS TO FINAL ACCOUNTS ..........................................................................................................13
ACCOUNTING CONCEPTS .............................................................................................................................15
DEPRECIATION .............................................................................................................................................17
BAD DEBTS ...................................................................................................................................................17
FINAL ACCOUNTS .........................................................................................................................................29
SOURCE DOCUMENTS……………………………………………………………………………………………………………………………37
DEPARTMENTAL ACCOUNTING ...................................................................................................................39
BANK RECONCILIATION STATEMENT ...........................................................................................................41
CONTROL ACCOUNTS ..................................................................................................................................46
ERRORS AFFECTING AND NOT AFFECTING TRIAL BALANCE ........................................................................48
MANUFACTURING ACCOUNTS ....................................................................................................................51
NON-PROFIT ORGANISATIONS (NPO) ..........................................................................................................57
INVENTORY VALUATION ..............................................................................................................................62
SINGLE ENTRY ..............................................................................................................................................66
INCOMPLETE RECORDS................................................................................................................................68
RATIO ANALYSIS ...........................................................................................................................................70
PARTNERSHIP ...............................................................................................................................................75
LIMITED COMPANIES ...................................................................................................................................85
PAYROLL ACCOUNTING................................................................................................................................97
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Page
,Page
3
, BASIC ACCOUNTING
ACCOUNTING is an art of
1. Classifying
2. Recording
3. Summarizing Business Transactions
4. Interpreting
5. Communicating
Transactions are day to day activities of the business which involves monetary value.
Business is an entity that transforms resources to perform activities to achieve business
objectives.
CLASSIFICATION OF ACCOUNTS
5 PILLARS OF ACCOUNTING:
1) ASSETS
2) LIABILITIES
3) CAPITAL ALCER
4) EXPENSES
5) REVENUES
ASSETS:
They are resources of business whether owned or owed. They are the possessions of the
business. They are divided into 2 categories:
➢ Non-Current Assets
➢ Current Assets
Non-Current Assets are those assets which are used in the course of the business for more than
an accounting period. They comprise of machines, motor vehicles, factories and so on. They are
also known as Fixed Assets.
Accounting period usually comprises of 12 months but in some cases, it can be extended up to
18 months.
Current Assets are those assets which are used in the course of the business for less than an
accounting period. Example: Inventory, Receivables, Cash and Cash Equivalents. They change
their form continuously.
4
Page
ACCOUNTING
REVISION KIT
PREPARED BY:
AHMED SAYA
,Contents
BASIC ACCOUNTING....................................................................................................................................... 4
BOOKS OF ORIGINAL ENTRY / PRIME ENTRY ...............................................................................................11
ADJUSTMENTS TO FINAL ACCOUNTS ..........................................................................................................13
ACCOUNTING CONCEPTS .............................................................................................................................15
DEPRECIATION .............................................................................................................................................17
BAD DEBTS ...................................................................................................................................................17
FINAL ACCOUNTS .........................................................................................................................................29
SOURCE DOCUMENTS……………………………………………………………………………………………………………………………37
DEPARTMENTAL ACCOUNTING ...................................................................................................................39
BANK RECONCILIATION STATEMENT ...........................................................................................................41
CONTROL ACCOUNTS ..................................................................................................................................46
ERRORS AFFECTING AND NOT AFFECTING TRIAL BALANCE ........................................................................48
MANUFACTURING ACCOUNTS ....................................................................................................................51
NON-PROFIT ORGANISATIONS (NPO) ..........................................................................................................57
INVENTORY VALUATION ..............................................................................................................................62
SINGLE ENTRY ..............................................................................................................................................66
INCOMPLETE RECORDS................................................................................................................................68
RATIO ANALYSIS ...........................................................................................................................................70
PARTNERSHIP ...............................................................................................................................................75
LIMITED COMPANIES ...................................................................................................................................85
PAYROLL ACCOUNTING................................................................................................................................97
2
Page
,Page
3
, BASIC ACCOUNTING
ACCOUNTING is an art of
1. Classifying
2. Recording
3. Summarizing Business Transactions
4. Interpreting
5. Communicating
Transactions are day to day activities of the business which involves monetary value.
Business is an entity that transforms resources to perform activities to achieve business
objectives.
CLASSIFICATION OF ACCOUNTS
5 PILLARS OF ACCOUNTING:
1) ASSETS
2) LIABILITIES
3) CAPITAL ALCER
4) EXPENSES
5) REVENUES
ASSETS:
They are resources of business whether owned or owed. They are the possessions of the
business. They are divided into 2 categories:
➢ Non-Current Assets
➢ Current Assets
Non-Current Assets are those assets which are used in the course of the business for more than
an accounting period. They comprise of machines, motor vehicles, factories and so on. They are
also known as Fixed Assets.
Accounting period usually comprises of 12 months but in some cases, it can be extended up to
18 months.
Current Assets are those assets which are used in the course of the business for less than an
accounting period. Example: Inventory, Receivables, Cash and Cash Equivalents. They change
their form continuously.
4
Page
