QCF Syllabus

Introduction to Accounting
Unit Title
Unit Reference Number
Guided Learning Hours
Level
Number of Credits

Introduction to Accounting
R/600/0601
100
4
12

Unit purpose and aim(s):

This unit aims to give learners a sound understanding of:
the importance of effective accounting information systems
accountancy terms and definitions
the principles, purposes, concepts and techniques used in financial and management accounting

Learning Outcome 1
The learner will: Understand the nature and scope of accounting.
Assessment Criteria
The learner can:

Indicative Content

1.1 Describe the purpose and aims of

financial and management
accounting.

1.1.1 Define financial and management accounting and identify the essential differences
between the two.

1.2 Describe the different users of

financial information.

1.2.1 Define internal stakeholders and identify the different internal stakeholders
requiring information from a business.
1.2.2 Define external stakeholders and identify the different external stakeholders
requiring information from a business.

1.3 Describe the main types of

business operating for profit
and their accounting obligations.

1.3.1 Explain the differences between a sole trader, a partnership and a limited company.
1.3.2Describe the role and function of accounting concepts, standards and principles,
including: Statements of Standard Accounting Practice (SSAPs); Financial Reporting
Standards (FRSs), and International Accounting Standards (IASs).

Learning Outcome 2
The learner will: Be able to carry out double entry book-keeping.
Assessment Criteria
The learner can:

Indicative Content

2.1 Prepare book-keeping

adjustments from books of
original entry (e.g. day books) to
trial balance stage.

2.1.1 Accurately reflect book-keeping entries and adjustments including two and three
column cash books, control accounts and accruals and prepayments.
2.1.2 Prepare a trial balance that accurately reflects any necessary bookkeeping
adjustments.

Learning Outcome 3
The learner will: Be able to prepare a set of final accounts.
Assessment Criteria
The learner can:

Indicative Content

3.1 Construct accurate final accounts

for a sole trader.

3.1.1 Preparation (with relevant and appropriate adjustments) of the trading account and
profit and loss account (Statement of Comprehensive Income), and the balance
sheet (Statement of Financial Position).

3.2 Construct accurate final accounts

for a partnership.

3.2.1 Preparation (with relevant and appropriate adjustments) of the trading account, the
profit and loss account, the appropriation account and the balance sheet.

3.3 Construct accurate final accounts

for a limited company.

3.3.1 Preparation (with relevant and appropriate adjustments) of the trading account, the
profit and loss account, the appropriation account and the balance sheet.

Learning Outcome 4
The learner will: Be able to prepare a cash flow statement.
Assessment Criteria
The learner can:

Indicative Content

4.1 Describe the requirements for,

and purpose and uses of, a cash
flow statement.

4.1.1 Outline and describe the requirements for a cash flow statement (Statement of Cash
Flows).
4.1.2 Describe the uses of a cash flow statement.

4.2 Prepare an accurate cash flow

statement.

4.2.1 Prepare a cash flow statement using either the direct (i.e. cash) method or the
indirect (i.e. accruals) method.

Learning Outcome 5
The learner will: Be able to interpret accounts using financial ratio analysis.
Assessment Criteria
The learner can:

Indicative Content

5.1 Calculate a range of financial and

accounting ratios.

5.1.1 Define and calculate basic profitability ratios (e.g. gross profit and net profit ratios),
creditor payment days, debtor payment days and stock turnover days, liquidity
ratios (e.g. current ratio and acid test ratio) and gearing ratios (e.g. return on capital
employed ROCE).

5.2 Explain the implications of ratios.

5.2.1 Describe and explain accurately the results and implications of any ratio
calculations.

Learning Outcome 6
The learner will: Understand and be able to calculate different elements of cost.
Assessment Criteria
The learner can:

Indicative Content

6.1 Describe and explain the nature,

purpose and objectives of cost
and management accounting.

6.1.1 Describe and explain the nature, purpose and objectives of cost and management
accounting.

6.2 Define and explain basic

accounting terms.

6.2.1 Define basic accounting terms: direct and indirect cost; overhead cost; fixed and
variable cost.

6.3 Calculate labour and material

costs.

6.3.1 Calculate material costs using FIFO (first in first out), LIFO (last in first out) and AVCO
(average cost).
6.3.2 Calculate labour costs given a range of figures on wage and payroll rates and labour
hours.

Learning Outcome 7
The learner will: Understand break-even analysis.
Assessment Criteria
The learner can:

Indicative Content

7.1 Explain concepts and principles

of break-even analysis.

7.1.1 Describe and explain the concepts and principles of the break-even point and breakeven analysis.

7.2 Calculate break-even figures

accurately.

7.2.1 Use the concepts of break-even analysis to calculate the break-even point for a
given level of profit and accurately account for changes in either the fixed or
variable cost level.

Learning Outcome 8
The learner will: Understand budgeting.
Assessment Criteria
The learner can:

Indicative Content

8.1 Explain concepts of budgeting.

8.1.1 Describe and explain the main purposes and benefits to a business of budgets.
8.1.2 Describe and explain the different timescales for budgets and the main steps in the
preparation of a budget.
8.1.3 Describe and explain the different styles and types of budgets.

8.2 Calculate budgets accurately.

8.2.1 Prepare an accurate budget from a given set of simple figures.

Assessment:
Assessment method: written examination (unless otherwise stated).
Written examinations are of three hours duration.
All learning outcomes will be assessed.

Recommended Reading:
Introduction to Accounting ABE Study Manual.
Please refer to the Tuition Resources section of the Members
Area of the ABE website (www.abeuk.com) for further
recommended reading.