SBOTS Accounting & Financial Management Syllabus

Accounting & Financial Management syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Accounting & Financial Management in SBOTS, not a summary of it.

1. 1

   Accounting Fundamentals

   4 topics

   • Accounting Concepts & Conventions
   • Double-Entry System
   • Journal, Ledger & Trial Balance
   • Accounting Equation
2. 2

   Financial Statements

   4 topics

   • Income Statement
   • Balance Sheet
   • Cash Flow Statement
   • Adjusting & Closing Entries
3. 3

   Financial Statement Analysis

   4 topics

   • Liquidity Ratios
   • Profitability Ratios
   • Leverage & Solvency Ratios
   • Efficiency Ratios
4. 4

   Corporate Finance

   4 topics

   • Time Value of Money
   • Capital Budgeting (NPV, IRR, Payback)
   • Cost of Capital
   • Working Capital Management
5. 5

   Auditing Basics

   3 topics

   • Internal vs External Audit
   • Audit Process & Evidence
   • Internal Controls
6. 6

   Bank Accounting & Reporting

   3 topics

   • Bank Financial Statements
   • IFRS & Disclosure Requirements
   • Provisioning & Non-Performing Loans

Accounting & Financial Management flashcards for SBOTS

20 of 61 cards from the Accounting & Financial Management deck — real questions with worked answers.

1. What is the going concern convention in accounting?

   It assumes a business will continue to operate indefinitely (for the foreseeable future) and is not about to be liquidated, so assets are recorded at cost rather than liquidation value.

2. State the accounting concept that requires expenses to be recorded in the same period as the revenues they help generate.

   The matching concept (also called the matching principle).

3. What does the prudence (conservatism) convention require?

   That revenues and profits are only recognised when reasonably certain, while losses and liabilities are provided for as soon as they are foreseen.

4. Under the accruals (accrual) concept, when is revenue recognised?

   When it is earned, not necessarily when cash is received; similarly, expenses are recognised when incurred, not when paid.

5. What does the money measurement concept state?

   Only transactions and events that can be expressed in monetary terms are recorded in the accounts.

6. What is the business entity (separate entity) concept?

   The business is treated as separate and distinct from its owners, so only business transactions (not the owner's personal ones) are recorded in the business's books.

7. What is the dual aspect concept and which system is built on it?

   Every transaction has two equal and opposite effects (a debit and a credit); it is the foundation of the double-entry system.

8. State the golden rule of double-entry bookkeeping.

   For every debit there must be an equal and corresponding credit, so total debits always equal total credits.

9. In double-entry, what increases an asset account and what increases a liability account?

   A debit increases an asset; a credit increases a liability (and equity).

10. For the modern rules of double entry, how are increases in income/revenue and expenses recorded?

    Income/revenue increases are credited; expense increases are debited.

11. What is a journal in accounting?

    The book of original (prime) entry where transactions are first recorded chronologically, showing the accounts to be debited and credited with a narration.

12. What is a ledger?

    The principal book of accounts where journal entries are posted and classified into individual accounts, summarising all transactions of each account.

13. What is a trial balance and its main purpose?

    A list of all ledger account balances (debits and credits) on a given date; its purpose is to check the arithmetical accuracy of the ledger by verifying total debits equal total credits.

14. Name one type of error NOT revealed by a trial balance even though it still balances.

    An error of omission (also acceptable: error of commission, error of principle, compensating error, or complete reversal of entries).

15. State the basic accounting equation.

    Assets = Liabilities + Owner's Equity (Capital).

16. Rearrange the accounting equation to express Owner's Equity.

    Owner's Equity = Assets - Liabilities.

17. How does the expanded accounting equation incorporate income and drawings?

    Assets = Liabilities + Capital + Revenues - Expenses - Drawings.

18. What is the primary purpose of an income statement (profit and loss account)?

    To measure financial performance over a period by reporting revenues earned and expenses incurred to arrive at net profit or loss.

19. How is gross profit calculated on an income statement?

    Gross Profit = Net Sales (Revenue) - Cost of Goods Sold.

20. How is Cost of Goods Sold (COGS) calculated?

    COGS = Opening Inventory + Purchases - Closing Inventory.

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