Principles of Accounts

PRINCIPLES OF ACCOUNTS

GENERAL OBJECTIVES

The aim of the Unified Tertiary Matriculation Examination (UTME) syllabus in Principles of
Accounts is to prepare the candidates for the Board’s examination. It is designed to test their
achievement of the course objectives, which are to:

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1. Stimulate and sustain their interest in Principles of Accounts;
2. Use the basic knowledge of and practical skills in Accounting;
3. Apply the knowledge and interpretation of accounting information to decision making;

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4. Determine the relevance of accounting information to business and governments;
5. Use information and communication technology for present and future challenges.
6. Use current accounting principles in financial reporting.

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DETAILED SYLLABUS
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TOPICS/CONTENTS/NOTES OBJECTIVES

1. Nature and Significance of Book keeping Candidates should be able to:

and Accounting
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i. differentiate between Book Keeping and Accounting;
a. Development of Accounting (including ii. understand the historical background of Book Keeping
branches of accounting) and Accounting;
b. Objectives of Book Keeping and iii. apply the right principles, concepts and conventions to
accounting solving Accounting problems;
c. Users and characteristics of Accounting iv. understand the role of Accounting information in
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information decision making;

d. Principles, concepts and conventions of v. identify the types/branches of Accounting such as Cost
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Accounting (nature, significance and Accounting, Management Accounting, Auditing,

application) Financial Accounting, Forensic Accounting, Social and
e. Role of Accounting records and Environmental Accounting, Government Accounting
information and Taxation; and

2. Principles of Double Entry Candidates should be able to:

a. Source documents i. identify various source documents and their uses;

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b. Books of original entry ii. relate source documents to the various books of original
c. Accounting equation entry;
d. Ledger and its classifications iii. determine the effect of changes in elements of
e. Trial balance Accounting equation;
f. Types and correction of errors iv. understand the role of double entry principles in treating
g. Suspense Account financial transactions;
v. extract a trial balance from ledger accounts;
vi. identify various types of errors and their corrections;
and
vii. correct errors using suspense account.

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3. Ethics in Accounting Candidates should be able to:

a. Objectives i. understand the ethics required in preparing and

b. Qualities of an Accountant presenting Accounting information;
ii. understand qualities of an Accountant such as honesty,
integrity, transparency, accountability and fairness;

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4. Cash Book Candidates should be able to:

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a. Columnar Cash Books: i. determine the cash float;
i. single column ii. differentiate between two and three columnar
ii. double column cash books and how transactions are recorded in
iii. three column them;
iii. differentiate between trade and cash discounts;
b. Discounts

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iv. examine the effects of trade and cash discounts in
c. Petty Cash Book and imprest system the books of accounts; and
v. identify various petty cash expenses.
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5. Bank Transactions and Reconciliation Candidates should be able to:
Statements
i. identify various instruments of bank transactions such
a. Instrument of bank transactions as cheques, pay-in-slips, credit cards, debit cards,
b. e-banking system
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internet banking and their uses;
c. Causes of discrepancies between cash ii. assess the impact of automated credit system, credit
book and bank statement transfers, interbank transfers and direct debit on cash
d. Bank reconciliation statement balances;
iii. identify factors that cause discrepancies between cash
book balance and bank statement; and
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iv. determine adjusted cash book balance.

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6. Final Accounts of a Sole Trader Candidates should be able to:

a. Income statement (Trading and profit and i. determine the cost of sales, gross profit and net profit of
loss account) a sole trader;
b. Statement of financial position (Balance ii. identify non-current assets, current assets, long- term
sheet) liabilities, current liabilities and proprietor’s capital;
c. Adjustments: iii. compute adjustable items on the related expenditure and
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i. provision for bad and doubtful debt income in the statement of profit or loss; and
ii. provision for discounts iv. differentiate between bad debts and provision for bad
iii. provision for depreciation using straight- and doubtful debts.
line and reducing balance methods
iv. accruals and prepayment

Candidates should be able to:

7. Stock Valuation
i. determine the value of materials issued to production
a. Methods of stock valuation e.g FIFO, department using FIFO, LIFO and simple average;
LIFO and simple average

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b. Advantages and disadvantages of the ii. calculate the closing stock of materials or finished
methods goods using FIFO, LIFO and simple average;
c. The importance of stock valuation iii. compare the advantages and disadvantages of each
method of stock valuation; and
iv. determine the effects of stock valuation on elements of
income statement.

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Candidates should be able to:
8. Control Accounts and Self balancing
ledger i. understand the meaning of control accounts;

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ii. identify the uses of control accounts in a business
a. Meaning and uses of control accounts enterprise;
b. Purchases ledger control account iii. differentiate between sales ledger control account and
c. Sales ledger control account purchases ledger control account; and
iv. identify the entries in control accounts.

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Candidates should be able to:

9. Incomplete Records and Single Entry i. determine proprietor’s capital using statement of
affairs;
a.
b.
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Determination of missing figures
Preparation of final accounts from
ii. determine the amount of sales, purchases, cash
balances, debtors, creditors and expenses by
incomplete records converting single entry to double entry; and
c. Conversion of single entry to double iii. use accounting equations, gross and net profit
entry percentages to determine cost of sales, gross and net
profits.
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Candidates should be able to:

10. Manufacturing Accounts i. identify the reason for preparing manufacturing

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account;
a. Cost classification ii. calculate prime cost, overhead cost, production cost
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b. Cost apportionment and total cost; and

c. Preparation of manufacturing account iii. determine the basis of cost apportionment among
production, administration, selling and distribution.

Candidates should be able to:

11. Accounts of Not-For-Profit-Making
Organizations i. distinguish between profit oriented and Not-For-Profit-
Making Organizations;
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a. Objectives ii. determine annual subscription, subscription in arrears

b. Receipts and payments account and in advance; and
c. Income and expenditure account iii. compute the cash balances, accumulated funds, surplus
d. Statement of financial position or deficit for the period.

Candidates should be able to:

12. Departmental Accounts
i. identify the reasons for preparing departmental
a. Objectives accounts;
b. Apportionment of expenses

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c. Departmental trading and profit and loss ii. determine the expenses and incomes attributable to
account departments;
iii. compute departmental profit or loss

Candidates should be able to:

13. Branch Accounts
i. understand the reasons for preparing branch accounts;

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a. Objectives ii. calculate profit or loss from branches; and
b. Branch account in the head office iii. reconcile the difference between branch and head office
books accounts.

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c. Head office account
d. Reconciliation of branch and head
office books

14. Joint Venture Accounts Candidates should be able to:

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a. Objectives and features i. identify the objectives and features of joint venture;
b. Personnel account of venturers ii. determine the profit or loss of joint venture.
c. Memorandum joint venture accounts iii. determine the profit or loss of each venture

15.
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Partnership Accounts
Candidates should be able to:

i. understand the procedures for the formation of

a. Formation of partnership partnership;
b. Profit or loss account ii. identify the accounts maintained for partnership
c. Appropriation account business;
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d. Partners current and capital accounts iii. determine the effects of admission and retirement of a
e. Treatment of goodwill partner;
f. Admission/retirement of a partner iv. determine profit or loss on revaluation of assets; and
g. Dissolution of partnership v. determine the partners’ share of profit or loss on
h. Conversion of a partnership to a dissolution.
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company
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Candidates should be able to:

16. Introduction to Company Accounts
i. differentiate between types of companies;
a. Formation and classification of ii. identify the procedures of treating the issue of shares
companies and debentures;
b. Issue of shares and debentures iii. compute the elements of final accounts of companies;
c. Final accounts of companies: and
d. Accounting ratios iv. compute and interpret Accounting ratios such as
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e. Distinction between capital and current, acid test and stock turnover.
revenue reserves

17. Public Sector Accounting Candidates should be able to:

a. Comparison of cash and accrual basis i. differentiate between public and private sector
of Accounting accounting;
b. Sources of government revenue ii. identify the sources of government revenue;
c. Capital and recurrent expenditure iii. differentiate between capital and recurrent expenditure;
d. Consolidated Revenue Fund

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e. Statement of assets and liabilities iv. calculate consolidated revenue fund and determine the
f. Responsibilities and powers of: values of assets and liabilities;
i. The Accountant General v. identify the duties of the Accountant General, Auditor
ii. The Auditor General General, Minister of Finance and Treasurer of Local
iii. The Minister of Finance Government;
iv. The Treasurer of Local vi. distinguish between elements of control in government
Government accounting procedures e.g. warrant, votes, budget and
g. Instruments of financial regulation due process certificate

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18. Information Technology in Accounting Candidates should be able to:

a. Manual and computerized i. differentiate between manual and computerized

Accounting processing system Accounting processing system;
b. Procedures involved in data ii. identify the procedures involved in data processing;
processing iii. relate the different component of computer.
c. Computer hardware and software iv. identify the advantages and disadvantages of manual

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d. Advantages and disadvantages of and computerized Accounting processing system.
manual and computerize Accounting
processing system.
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 Principles of Accounts

RECOMMENDED TEXTS

Adekunle, K.O. (2014). Bounty Financial Accounting for Schools and College, Ibadan: Bounty Press Ltd.
Agbasiere, E.A., Ufot C.I and Olugbenga T.E. (2015). New age Financial Accounting SSS Text Books, Anambra:
New Age Press Ltd.
Ayodele A. (2015). Financial Accounting for Schools and Colleges, Ibadan: Spectrum Books Ltd.
Ekwue K. C. (2010). Principles of Accounts, Book 1 & 2, Onitsha: Adson Publishing Company,

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Femi L. (2013). Simplified and Amplified Financial Accounting.
Frankwood and Alan S. (2002). Frankwood’s Business Accounting, Prentice Hall International Edition.
Hassan M. M. (2001). Government Accounting, Lagos: Malthouse Press Limited.

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Ibrahim, R.A and Kazeem R. A (2018). Essential Financial Accounting for Senior Secondary Schools (sixth edition),
Ogun State: Tonad Publishers Limited.
Igben, R. O. (2004). Financial Accounting Made Simple (Vol. I) Lagos: Roi Publishers.
ICAN (2021). Foundation Level Financial Accounting Study Text, Lagos: Institute of Chartered Accountants of

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Nigeria.
Ono, D.I., Oshunnira, M. and Ozurigbo, P.M. (2015). Financial Accounting for Senior Secondary Schools, Ibadan:
Hebn Publishers Plc.
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