TABLE OF CONTENTS

LESSON ONE……………………………………………..4

Partnership Accounts…………………………………….4

Appropriation A/C…………………………………………6

Current Accounts………………………………………….. 7

Appropriation Account………………………………….. 8

Partnership Loans………………………………………….9

Balance Sheet………………………………………………..11

Fixed Assets…………………………………………………. 11

Valuation Of Goodwill…………………………………… 12

Capital Accounts…………………………………………… 13

Partner’s Capital Accounts……………………………… 13

Revaluation…………………………………………………… 14

Current Assets……………………………………………….. 14

LESSON TWO……………………………………………… 18

Company Accounts………………………………………….. 18

2.0 Types Of Companies…………………………………… 18

2.1  The Balance Sheet………………………………………. 18

2.2  Types Of Shares………………………………………….. 19

2.5 Accounts Of Companies……………………………….. 21

LESSON THREE…………………………………………….. 25

The Accounts Of Non-Profit Organisations…………… 25

3.2 Sources Of Income For Non-Profit Organisations…………..25

Funds Of Non-Profit Organisations……………………..  26

The Receipts And Payments Account……………………… 26

1.0 Membership Subscriptions………………………………… 26

Subscriptions Account……………………………………………  28

3.3 Accounting For The Sale Of Investments And Long-Term Assets……….. 33

3.4 Income Statements……………………………………………. 36

LESSON FOUR ……………………………………………………  41

Cash Flow Statements……………………………………………….. 41

4.2. IAS 7 Cash Flow Statements…………………………………. 41

Objectives Of IAS 7…………………………………………………….. 42

Benefits Of Cash Flow Information……………………………….. 42

Cash And Cash Equivalents…………………………………………..  43

4.4 Presentation Of A Cash Flow Statement……………………… 43

Operating Activities………………………………………………………… 44

Investing Activities………………………………………………………….. 45

Financing……………………………………………………………………….. 45

Reporting Cash Flows From Operating Activities………………… 45

Using The Direct Method…………………………………………………..  45

Using The Indirect Method………………………………………………… 46

Indirect Versus Direct………………………………………………………… 46

Interest And Dividends……………………………………………………….. 47

1. Preparing Cash Flow Statement……………………………………. 50

Working: Non-Current Asset Disposals………………………………….. 53

Cost…………………………………………………………………………………….. 53

Accumulated Depreciation……………………………………………………… 54

Capital And Reserves……………………………………………………………… 55

Notes To The Cash Flow Stastement………………………………………….56

The Advantages Of Cash Flow Accounting…………………………………… 57

Criticisms Of IAS 7……………………………………………………………………. 58

LESSON FIVE…………………………………………………………………………. 60

Interpretation Of Financial Statements………………………………………….. 60

5.1 The Broad Categories Of Ratio………………………………………………….. 60

5.2. Profitability And Return On Capital………………………………………… 63

Capital Employed………………………………………………………………………….64

Return On Equity (ROE)………………………………………………………………. 65

Analyzing Profitability And Return In More Detail: The Secondary Ratios…….. 66

Profit Margin………………………………………………………………………………… 67

Long-Term Solvency: Debt And Gearing Ratios…………………………………69

Gearing/Leverage……………………………………………………………………………. 70

The Implications Of High Or Low Gearing/Leverage………………………… 71

Interest Cover……………………………………………………………………………….73

Cash Flow Ratio……………………………………………………………………………..74

Short-Term Solvency And Liquidity     74

The Cash Cycle……………………………………………………………………………..75

Liquidity Ratios: Current Ratio And Quick Ratio……………………………..76

Efficiency Ratios: Control Of Receivables And Inventories………………….77

P/E Ratio………………………………………………………………………………………..78

Dividend Yield…………………………………………………………………………………79

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