CONTENT PROVIDER ACCA approved content …

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ACCA Approved

Interactive Text

pogukntancy FFA /

For exams from 1 September 2016 to 31 August 2017

Free access

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FreeboAoCCkAsA.pPPkROVED CONTENT PROFVIrDeEeRbooks.pk

As the first accredited publisher of ACCA materials, BPP Learning Media has set the benchmark for producing exceptional study materials for students and tutors alike.

Our Study Texts, Practice & Revision Kits and i-Passes (for exams on demand) are reviewed by the ACCA examining team and are written by our in-house authors with industry and teaching experience who understand what is required for exam success.

EXAM SUCCESS SITE To help maximise your chances of succeeding in your exams, we've put together a suite of exclusive ACCA resources. Our Exam Success site provides you with access to a free digital version of this publication, as well as extra resources designed to focus your efforts on exams and study methods.

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FForeuenbodokas.tpikons in Accountancy

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Accounting

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BPP Learning Media is an ACCA Approved Content Provider for the Foundations in

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Accountancy qualification. This means we work closely with ACCA to ensure this Interactive Text contains the information you need to pass your exam.

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In this Interactive Text, which has been reviewed by the ACCA examination team,

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Highlight the most important elements in the syllabus and the key skills you

need

Signpost how each chapter links to the syllabus and the study guide

Provide lots of exam focus points demonstrating what the examination team

will want you to do

Emphasise key points in regular fast forward summaries

Test your knowledge in quick quizzes

Examine your understanding in our practice question bank

Reference all the important topics in our full index

BPP's Practice & Revision Kit also supports this paper.

FOFR ErXeAeMSbFoRoOMk1sS.pEPkTEMBER 2016 TO 31 AUGUFSTre20e17books.pk

F3/FFA FINANCIAL ACCOUNTING

Freebooks.pk First edition March 2011

Fifth edition January 2016

ISBN 9781 4727 4590 3 (Previous ISBN 9781 4727 3525 6) e-ISBN 9781 4727 4631 3

British Library Cataloguing-in-Publication Data A catalogue record for this book is available from the British Library

Published by

BPP Learning Media Ltd BPP House, Aldine Place London W12 8AA

learningmedia

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Unit 2 Wells Place Merstham RH1 3LG

Your learning materials, published by BPP Learning Media Ltd, are printed on paper obtained from traceable sustainable sources.

All our rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of BPP Learning Media.

We are grateful to the Association of Chartered Certified Accountants for permission to reproduce past

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practice answer bank have been prepared by BPP Learning Media Ltd, except where otherwise stated.

BPP Learning Media is grateful to the IASB for permission to reproduce extracts from the International Financial Reporting Standards including all International Accounting Standards, SIC and IFRIC Interpretations (the Standards). The Standards together with their accompanying documents are issued by:

The International Accounting Standards Board (IASB) 30 Cannon Street, London, EC4M 6XH, United Kingdom. Email: info@ Web:

Disclaimer: The IASB, the International Financial Reporting Standards (IFRS) Foundation, the authors and the publishers do not accept responsibility for any loss caused by acting or refraining from acting in reliance on the material in this publication, whether such loss is caused by negligence or otherwise to the maximum extent permitted by law.

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BPP Learning Media Ltd 2016

A note about copyright Dear Customer

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What does the little ? mean and why does it matter?

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CONTENTS

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Page

Introduction

Helping you to pass ...................................................................................................................... v Chapter features ........................................................................................................................... vi Studying F3/FFA.......................................................................................................................... vii The Computer Based Examination ............................................................................................... xxiii Tackling Multiple Choice Questions.............................................................................................. xxiv

Part A The context and purpose of financial reporting

1 Introduction to accounting ..................................................................................................... 3 2 The regulatory framework .................................................................................................... 19

Part B The qualitative characteristics of financial information

3 The qualitative characteristics of financial information............................................................. 31

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The use of double entry and accounting systems

4 Sources, records and books of prime entry ............................................................................. 45 5 Ledger accounts and double entry......................................................................................... 59 6 From trial balance to financial statements.............................................................................. 89

Part D Recording transactions and events

7 Inventory ......................................................................................................................... 107

8 Tangible non-current assets ............................................................................................... 133

9 Intangible non-current assets.............................................................................................. 169

10 Accruals and prepayments ................................................................................................. 181

11 Provisions and contingencies.............................................................................................. 195

12 Irrecoverable debts and allowances..................................................................................... 207

13 Sales tax.......................................................................................................................... 223

Part E

Preparing a trial balance

14 Control accounts............................................................................................................... 235 15 Bank reconciliations .......................................................................................................... 257 16 Correction of errors ........................................................................................................... 271

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Preparing basic financial statements

17 Incomplete records............................................................................................................ 287 18 Preparation of financial statements for sole traders ............................................................... 311 19 Introduction to company accounting.................................................................................... 323 20 Preparation of financial statements for companies ................................................................ 341 21 Events after the reporting period ......................................................................................... 369 22 Statements of cash flows ................................................................................................... 375

Part G

Preparing simple consolidated financial statements

23 Introduction to consolidated financial statements.................................................................. 397 24 The consolidated statement of financial position ................................................................... 411 25 The consolidated statement of profit or loss ......................................................................... 437

Part H Interpretation of financial statements

26 Interpretation of financial statements................................................................................... 451

Practice question bank ......................................................................................................................... 479

Practice answer bank ........................................................................................................................... 505

Index ..................................................................................................................................................... 517

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F3/FFA FINANCIAL ACCOUNTING

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iv

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INTRODUCTION

HelpiFngBrPeyPoeuLbetoaorpnoianskgssM.epdiak? ACCA Approved ContentFPrroeviedebr ooks.pk

As an ACCA Approved Content Provider, BPP Learning Media gives you the opportunity to use study materials reviewed by the ACCA examination team. By incorporating the examination team's comments and suggestions regarding the depth and breadth of syllabus coverage, the BPP Learning Media Interactive Text provides excellent, ACCA-approved support for your studies.

The PER alert!

To become a Certified Accounting Technician or qualify as an ACCA member, you have to not only pass all your exams but also fulfil a practical experience requirement (PER). To help you to recognise areas of the syllabus that you might be able to apply in the workplace to achieve different performance objectives, we have introduced the 'PER alert' feature. You will find this feature throughout the Interactive Text to remind you that what you are learning in order to pass your Foundations in Accountancy and ACCA exams is equally useful to the fulfilment of the PER requirement.

Freebooks.pk Freebooks.pk Your achievement of the PER should be recorded in your online My Experience record. Tackling studying

Studying can be a daunting prospect, particularly when you have lots of other commitments. The different features of the Interactive Text, the purposes of which are explained fully on the Chapter features page, will help you whilst studying and improve your chances of exam success.

Developing exam awareness

Our Interactive Texts are completely focused on helping you pass your exam.

Our advice on Studying F3/FFA outlines the content of the paper and the recommended approach to studying.

Exam focus points are included within the chapters to highlight when and how specific topics might be examined.

Using the Syllabus and Study Guide

Freebooks.pk Freebooks.pk You can find the syllabus and study guide on page ix ? xxii of this Interactive Text. Testing what you can do

Testing yourself helps you develop the skills you need to pass the exam and also confirms that you can recall what you have learnt.

We include Questions ? lots of them ? both within chapters and in the Practice Question Bank, as well as Quick Quizzes at the end of each chapter to test your knowledge of the chapter content.

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F3/FFA FINANCIAL ACCOUNTING

Freebooks.pk Freebooks.pk Chapter features Each chapter contains a number of helpful features to guide you through each topic.

Topic list Introduction

Tells you what you will be studying in this chapter and the relevant section numbers, together with the ACCA syllabus references.

Puts the chapter content in the context of the syllabus as a whole.

Study Guide

Links the chapter content with ACCA guidance.

Fast Forward Summarises the content of main chapter headings, allowing you to preview and review each section easily.

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Freebooks.pk Demonstrates how to apply key knowledge and techniques.

Definitions of important concepts that can often earn you easy marks in exams.

Exam Focus Point

Tells you how specific topics may be examined.

Formula

Formulae which have to be learnt.

PER Alert

Freebooks.pk Question Chapter Roundup Quick Quiz Practice Question Bank

This feature gives you a useful indication of syllabus areas that closely relate to performance objectives in your Practical Experience Requirement (PER).

Freebooks.pk Gives you essential practice of techniques covered in the

chapter.

A full list of the Fast Forwards included in the chapter, providing an easy source of review.

A quick test of your knowledge of the main topics in the chapter.

Found at the back of the Interactive Text with more examstyle chapter questions. Cross referenced for easy navigation.

vi

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