Faculty of Business Management Sciences & Economics

Department of Finance & Accounting

Module Name: Business Accounting

Module Code: ACCN 101

Lecturer Contact Details

Mr. S. Chaitezvi
Finance and Accounting Department, UZ.
Cell phone #: +263772713331
Email Address: [email protected]

1.0 AIMS OF THE COURSE

Accounting is essential in order to for business to function be it small or large business. Managers use it as a
communication tool for the firm’s financial and economic information to external stakeholders such as shareholders,
potential investors and creditors, just to mention a few. No one working in business can therefore avoid financial
illiteracy whether you run your own business or work in a business environment. You want to be able to talk
business when interacting with accounting experts. As such the benchmark for business locates accounting as a
major learning area within the business curriculum. The challenge of the curriculum is to provide students with
appropriate tools for their future careers. The ability to understand and interpret accounting data is essential for
management roles in the organization. As such the focus of learning will be on the provisions of an understanding of
the role of common financial accounting statements and teaching, the information that they provide to external
stakeholders and management respectively. Skills will be developed in the preparation and understanding of
financial statements.

2.0 COURSE OBJECTIVES

The course therefore assists students to:
(a) Familiarize themselves with essential accounting language
(b) Appreciate the role of accounting in day to day operations of managers.
(c) Identify and apply the conceptual and legal frameworks upon which Financial Statements are
prepared, analyzed and interpreted
(d) Provide a conceptual base for learning more and more accounting.
2.1 Outcomes
 To be able to develop a business proposal for a product manufacturing and service provision organisation
 To enable to predict corporate failure of listed firms using available models such as Altman’s Z-Score etc
 To be able to evaluate the performance of the company listed and unlisted using DuPont Ratios etc
 To be able to prepare a set of financial statements (SOCI, SOFP, SOCE, SOCE).

3.0 Lecture Times & Venue: To be advised

4.0 Lecturer details:

5.0 Assessment:

Assessment will be 50% of course work and 50% final examination.

Note that your course work should be at least 40% of the 50% course work in order for you to be allowed to sit for
your final exam. If you fail to meet the required course work mark and you go ahead and sit for the exam the highest
mark you can achieve for the course is 48%. This means you will have to repeat the course.

No books or notes are allowed for a test or the final examination.

Test papers will be handed back to the students. Students are advised to keep these in safe custody as evidence in
case of queries in connection with marks awarded.

Students should have their student identity cards when writing tests and final examination to allow invigilators to
check if they need to. Student number should be provided on each script otherwise the script will not be marked.

Calculators are allowed but cannot be shared. Every student should have his/her own calculator.

Assignments must be submitted on or before the due date. Late assignments will attract a penalty of 5 marks per
day. Assignments handed in after seven days will not be accepted.

7.0 Prescribed Literature

Antrill P &McLaney E. Accounting and Finance for Non-Specialists 8thEdition, 2013 Pearson Education Ltd.

Pizzey A Finance and Accounting for Non-Specialist Students Pearson Education Limited.

7.1 Other Reading Lists

Loughran M. Financial Accounting for Dummies 2011 Edition John Wiley &Sons Inc.

Berry P R, de Klerk ES, Doussy F, Jansen van Rensburg, Ngcobo RN, Rehwinkel, Scheepers D and Scott D about
Financial Accounting (latest editions) Edition LexisNexis

Harrison W T, Horngren C T, Thomas C W and Suwardy T Financial Accounting International Financial Reporting
Standards Eighth Edition Pearson Global.

Wood, F. & Sangster, L. Business Accounting 1& 2 (latest editions) Pitman Publications.
Cost and Management Accounting J.T M Chikondo (UZ Publications 2015 1st Edition).
Cost Accounting: A Managerial Emphasis – 5th Edition by Hornhren C.T Published by Prentice Hall
Costing: T.A. Lucey – 4th Edition by DP Publishing

8.0 COURSE CONTENT

8.1 Financial Accounting
Introduction
 Conceptual Framework for Financial Reporting
 IASB’s Conceptual Framework
 The objective of general-purpose financial reporting
 Underlying assumption
 Qualitative characteristics of useful financial information
 The elements of financial statements
 Recognition of the elements of financial statements
 Measurement of the elements of financial statements
 Fair presentation and compliance with IFRS
 Users of Financial Information and their Needs.
 Why Financial Reporting?
 Theories linked to Financial Reporting

8.2.1 Recording Business Transactions.

  Basic accounting terminology.
 The accounting equation.
 Double entry bookkeeping basics and Accounting Concepts
 Books of accounts.
 Preparation of final accounts (Trial Balance)
 The accounting system (Refer to Packages and Procedures)
 Demo using Quick Books.

8.2.3 Statement of Profit or Loss and Other Comprehensive Income

 Introduction.
 Elements of the Income Statement
 Income Statement for Sole Traders
 Income Statement for Partnerships
 Income Statement for Companies (IAS 1)

8.2.4 The Statement of Financial Position

 Introduction.
 Elements of a Statement of Financial Position
 Statement of a Financial Position

8.2.5 Statement of Changes in Equity

8.2.6 Cash Flow Statements (IAS 7)

 The difference between profitability & liquidity
 Why cashflow statements
 Net cash from operating activities.
 Cash flows from investing activities.
 Cash flows from financing activities.
 Cash flow analysis.
 Impact of operations on liquidity.
 Significant facts to remember about cash flow statements.

8.2.7 Interpretation of Financial Statements

 Introduction.
 Usefulness of Financial Statements Analysis
 Horizontal analysis.
 Vertical analysis.
 Balance sheet analysis.
 Income statement analysis.
  Financial ratio analysis.
 Management of return on investment.
 Limitations of ratio analysis.
 Prediction of business failure (Z-Score & A-Score)
 Indicators of financial distress

8.2.6 Working Capital

 What is working capital
 Working Capital Cycle
 Working capital and time
 Consequences of insufficient working capital
 Overtrading
 Stock control
 Debtors control
 Models and Techniques for Working Capital Management
 Working capital trade off strategies

9.0 Management Accounting

9.1.1 Concepts of Cost and Cost Behaviour
 Definition of a cost
 Elements of a cost
 Behavior of cost elements
 Variable Costs & Fixed Costs
 Mixed Costs
 Separation of Mixed costs using HL & Regression Method
 Overheads Analysis
9.1.2 Costing Methods
 Absorption Costing
 Marginal Costing
 Standard Costing & Variance Analysis
 Activity Based
 Target Costing
 Life Cycle Costing
9.1.3 Decision Making
 Decision Making using Marginal Costing
 Break Even Analysis
 CVP Analysis
 Sensitivity Analysis
 Make/Buy
  Optimization of Scarce Resources
 Shutdown Decisions
 Sale or Process Further
 Acceptance of Orders Below Normal Prices
9.1.4 Budgetary and Budgetary Control
 What is a budget
 Budgetary Systems
 Usefulness of Budgets
 Types of Budgeting
 Budgeting Approaches
 Sales, Raw Material, Labour & Cash Budgets
 Master Budgets

9.1.5 Performance Measurement

 Performance Management Information Systems
 Sources of MIS
 Performance Measurement in Private Sector Organisations
 Divisional Performance and Transfer Pricing
 Further Aspects of Performance Management

Methods/strategies of teaching
The teaching strategy will include lectures, group discussions, class presentations, power point projector and
markers and board. Each topic will be introduced by a lecturer to provide information and ideas, and to raise
questions and promote discussion.

1. Assessment Scheme

The assessment structure for the course is made up of the following broad components in the proportions
shown in the table below:

Group Assignments 7.5%

Individual Assignment 7.5%
In-Class Test 15%
Total Coursework 50%
Final Examination------------------------------------------------------------------------------------ ………. .50%
TOTAL======================================================= ..====== 100%