1 ACCOUNTING PREPARATION GR 12

ACCOUNTING

1

PREPARATION GR 12

ACCOUNTING

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PREPARATION GR 12

Bank reconciliations

? Analysis & interpretation of bank statements and bank reconciliation statements

Debtors' and creditors' reconciliation

? Analysis & interpretation of control accounts

? Reconciliation of debtors' & creditors' statements / accounts

? Age analysis

Ethics

? Ethics relating to debtors & creditors ¨C payment periods, interest, credit ratings, fraud, etc.

? Ethics relating to banking environment ¨C fraud, money laundering, tax evasion

Internal control & internal audit

? Internal audit processes & internal control over debtors, creditors, cash receipts & payments

? Role of completing debtors', creditors' and bank reconciliations in internal auditing

? Audit evidence, results & reports

? Accountable management of debtors, creditors & cash

Companies - concepts

? Public & private companies

? Establishment

? Shareholders

? Share capital

? Share premium

? Dividends

? Retained income

?

Companies ¨C recording of information

? Subsidiary journals

? Ledger accounts

o Ordinary share capital

o Ordinary share premium

o Shareholders for dividends

o SARS: Income tax

o Ordinary share dividend

o Income tax

Companies ¨C accounting equation

? Effect of transactions on accounting equation

Companies ¨C final accounts

? Adjustments relating to companies

o Income tax

o Dividends

o Retained income

? Final accounts

o Trading account

o Profit & loss account

o Appropriation account

? Closing transfers

ACCOUNTING

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PREPARATION GR 12

Companies ¨C GAAP


Accounting / Financial period


GAAP principles

o
Historical cost principle

o
Matching & accrual principle

o
Prudence principle

o
Going concern principle

o
Consistency principle

o
Materiality principle

o
Business entity principle

Companies ¨C financial statements

? Year-end adjustments

o Income tax

o Dividends

o All Gr. 10 & 11 adjustments

? Reversal of year-end adjustments

?

Income statement

?

Balance sheet

?

Notes to financial statements

Companies
Cash Flow Statement


Notes to the cash flow statement

Companies ¨C interpretation of financial statements


Profitability

? Gross profit on sales

? Gross profit on cost of sales

? Operating expenses on sales

? Operating profit on sales

? Net profit after tax on sales


Liquidity


Acid test ratio


Current ratio


Rate of stock turnover


Number of months stock on hand

? Average debtors' collection period

? Average creditors' payment per.


Solvency

? Solvency ratio


Return

? Return on shareholders equity

? Net asset value per share

? Dividends per share

? Earnings per share


Risk

? Debt/equity ratio (gearing)

ACCOUNTING

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PREPARATION GR 12

Companies published financial statements


Analyse published statements of

companies


Analyse audit reports of companies

Companies ¨C internal control & - audit

? Internal audit processes & internal control

? Audit evidence

? Audit samples

? Sampling techniques

? Report on internal audit results

? Interpretation of internal audit reports

? Accountable management of resources

?

Companies ¨C ethics

? Ethics relating to companies ¨C integrity, credibility, accountability,

? King Code ¨C Corporate governance

? Disciplinary procedures

*employer & employees

*Labour Relations Act

? Legislation ¨C Companies Act

? Professional bodies

* SAICA, * SAIPA * IRBA * IFRS

? HIV awareness

Budgets (sole trader)

? Prepare cash budget

(revision grade 11)

? Prepare projected income statement (revision grade 11)

? Analyse & interpret: (grade 12)

o Projected income statement

o Cash budget

o Debtors' collection schedule

o Creditors' payment schedule

Ethics

? Ethics relating to budgeting and projections ¨C consideration of stakeholders, etc.

Internal control & internal audit

? Internal audit processes & internal control relating to budgeting & projections ¨C variance

analysis

? Audit evidence, results & reports

? Accountable management of budgets

Value Added Tax

? VAT calculations

? Ledger accounts:

o VAT Input

o VAT Output

o VAT Control

? VAT returns

Ethics

? Ethics relating to VAT ¨C effect on population, VAT fraud, etc.

ACCOUNTING

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PREPARATION GR 12

Internal control & internal audit

? Internal audit processes & internal control relating to collection of VAT from customers and

payment of VAT to SARS

? Audit evidence, results & reports

? Accountable management of collection and payment of VAT

Non-current assets

? Interpret & report on results of asset movement

? Age of assets

? Replacement rate

? Life span of assets

Inventory valuation methods

? Weighted average method

? FIFO method

Ethics

? Ethics relating to assets ¨C fraud, theft, misappropriation, etc.

? Ethics relating to inventory ¨C quality, pricing, fraud, theft, misappropriation, etc.

Internal control & internal audit

? Internal audit processes & internal control over assets and inventory

? Audit evidence, results & reports

? Accountable management of assets and inventory

Manufacturing

? General ledger accounts

(Revision grade 11 work)

? Production cost statement & notes

? Trading statement

? Profit & loss statement

? Calculate & interpret:

o Gross profit & net profit

o Break-even point

o Total cost of production

o Marginal cost

o Unit cost

Ethics

? Ethics relating to manufacturing ¨C product quality, raw materials, support for local products,

pricing, fraud, theft, etc.

Internal control & internal audit

? Internal audit processes & internal control

? Audit evidence,

? Audit samples

? Sampling techniques

? Report on internal audit results

? Interpretation of internal audit reports

? Accountable management of resources

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