A Level Accounting 9706 (AS Accounts) - by ARD | Urdu/Hindi

1. Financial Accounting (AS Level)

1.1 Financial reporting and financial statements

• Understand the purpose and elements of financial reports (balance sheet, income statement, cash flow statement, and statement of changes in equity).
• Know how to prepare ledger accounts and financial statements for a limited company, including recording transactions, adjustments, and closing entries.
• Be aware of the distinction between capital reserves (share premium and revaluation reserve) and revenue reserves (retained earnings and general reserve).
• Understand how to prepare ledger accounts for issuing shares at par or at a premium, rights issue of shares, and bonus issues of shares. 1.2 Sources of finance and their impact on financial statements
• Know the various sources of finance for specified purposes, including long-term sources (e.g., equity, debentures) and short-term sources (e.g., overdrafts, loans).
• Understand how these sources affect the financial position and performance of a company. 1.3 Analysis and communication of accounting information 1.3.1 Users of accounting information
• Recognize that different stakeholders have differing requirements for accounting information.
• Know how to communicate and analyze the information required by various users such as owners, managers, employees, investors, lenders, suppliers, customers, government, and public and environmental bodies. 1.3.2 Calculation and evaluation of ratios
• Understand how to calculate key financial ratios (profitability ratios like gross profit margin, mark-up, profit margin, return on capital employed; liquidity ratios like current ratio, acid test ratio; efficiency ratios like non-current asset turnover, trade receivables turnover, trade payables turnover, inventory turnover, rate of inventory turnover).
• Know the limitations of accounting information and how to evaluate the financial health of an organization by interpreting these ratios. 1.4 Budgeting, planning, and forecasting
• Understand the purposes and importance of budgets in planning, controlling, and decision-making processes.
• Recognize various types of budgets and the stages in the budgetary process (initiation, preparation, execution, review, and revise).
• Know how to prepare a master budget that includes operational budgets, financial budgets, and flexible budgets. 1.5 Management accounting (AS Level) 2.1 Costs and cost behaviour 2.1.1 Materials and labour
• Understand the principles of recording material and labour costs, distinguishing between fixed, variable, semi-variable, and stepped costs.
• Know how to calculate closing inventory using FIFO and AVCO methods (both perpetual and periodic). 2.1.2 Overhead cost allocation and control
• Understand the concepts of direct and indirect costs, and know how to allocate overheads to departments or products.
• Recognize methods for controlling costs and performance through budgeting and variance analysis. 2.2 Marginal and absorption costing 2.2.1 Marginal costing
• Know how to calculate contribution, break-even point, and margin of safety.
• Understand how to interpret a break-even chart and the use of marginal costing in decision-making (make-or-buy, special orders, closure of business unit). 2.2.2 Absorption costing
• Know how to prepare costing and profit statements using absorption costing, and understand its uses and limitations. 2.2.3 Cost–volume–profit analysis
• Understand the advantages and limitations of CVP analysis.
• Recognize the usefulness of CVP data in decision-making processes such as determining the optimal level of activity to achieve a target profit, limiting factors, and target profit analysis. 2.3 Budgeting, planning, and forecasting (continued)
• Know how to prepare flexible budgets that account for changes in activity levels.
• Understand the use of sales and production budgets, activity-based budgets, and zero-based budgeting techniques. 2.4 Decision-making techniques
• Recognize various decision-making techniques such as payback period, net present value (NPV), internal rate of return (IRR), and profitability index.
• Know how to apply these techniques in the context of making investment decisions, product mix decisions, and capital budgeting. 2.5 Performance evaluation
• Understand the principles of performance evaluation for managers and departments using techniques such as responsibility accounting, activity-based costing (ABC), and Balanced Scorecard.
• Recognize how to measure and evaluate the efficiency and effectiveness of managerial decisions and performance.