Financial Accounting I
Fundamentals of financial accounting under IFRS: the IASB conceptual framework and the key standards governing revenue, financial-statement presentation, inventories, accounting policies, property plant and equipment, government grants, and borrowing costs.
Syllabus contents
Areas worth reviewing
High-yield areas pulled from past papers. If your time is short, study these first.
- /01
IASB Framework qualitative characteristics
- /02
IFRS 15 five-step revenue recognition model
- /03
IAS 1 complete set of financial statements
- /04
IAS 2 inventory valuation (lower of cost and NRV)
- /05
IAS 8 retrospective vs prospective application
- /06
IAS 16 depreciation calculations (straight-line & reducing balance)
- /07
IAS 20 government grants recognition rules
- /08
IAS 23 borrowing costs capitalization
The reading
Financial Accounting
Accounting Principles
Likely written questions
- Q1
What are the five components of a complete set of financial statements according to IAS 1?
- Q2
Define "inventory" according to IAS 2 and list the three main categories.
- Q3
How is Net Realizable Value (NRV) calculated under IAS 2?
- Q4
State the five-step model for revenue recognition under IFRS 15.
- Q5
Explain the difference between a change in accounting policy and a change in accounting estimate under IAS 8.
- Q6
Under IAS 16, what components make up the initial cost of Property, Plant, and Equipment (PPE)?
- Q7
What is the fundamental difference between the Capital Approach and the Income Approach for recognizing government grants related to assets under IAS 20?
- Q8
Define a "Qualifying Asset" in the context of IAS 23 (Borrowing Costs).
- Q9
What happens to borrowing costs incurred during an extended period where active construction of a qualifying asset is halted (e.g., due to a strike) under IAS 23?
- Q10
Explain the "Imprest System" in relation to a Petty Cashbook.
- Q11
Differentiate between Capital Expenditure and Revenue Expenditure.
- Q12
What is an Error of Principle? Give an example.
- Q13
List three reasons why a cash book balance might not agree with a bank statement balance.
- Q14
Define "Prime Cost" in a manufacturing account.
- Q15
What is the fundamental difference between Marginal Costing and Absorption Costing?
- Q16
Provide the formulas for calculating the Re-order Level and the Maximum Stock Level.
- Q17
Explain "Break-Even Point" and provide its formula in units.
- Q18
What is the "Margin of Safety"?
- Q19
Describe the First-In, First-Out (FIFO) method of inventory valuation.
- Q20
What is "Labour Turnover" and how is the Separation Rate measured?
Files to download
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