Financial Accounting Scheme of Work for SS1 Third Term

 

SCHEME OF WORK

WEEK 1: PREPARATION OF BANK RECONCILIATION ACCOUNT

WEEK 2: PREPARATION OF BANK RECONCILIATION WHEN THERE IS A BANK OVERDRAFT

WEEK 3: END-OF-YEAR ADJUSTMENTS IN PROFIT AND LOSS ACCOUNT

WEEK 4: PROVISION FOR BAD DEBT AND PROVISION FOR DISCOUNT ALLOWED AND RECEIVED

WEEK 5: BAD DEBTS RECOVERED

WEEK 6&7: DEPLETION OF FIXED ASSETS

WEEK 8: STRAIGHT LINE AND REDUCING BALANCE METHODS OF DEPRECIATION

WEEK 9: TREATMENT OF DEPRECIATION IN PROFIT AND LOSS ACCOUNTS AND BALANCE SHEET

 Below are the 2022 complete SS1 Financial Accounting Third Term Lesson Note 

Financial Accounting Lesson Note SS1 Third Term

Week 1

Topic: What is a Bank Reconciliation Account?

A Bank Reconciliation Account is a critical tool for managing cash balance. Reconciling is, therefore, the process of comparing the cash activity in accounting records to the transactions in a bank statement. This process helps an accountant to monitor all of the cash inflows and outflows in a bank account. The reconciliation process also helps accountants identify fraud and other unauthorized cash transactions. As a result, it is critical for every accountant to reconcile their organization’s bank accounts within a few days of receiving their bank statements. To learn more, Click here.

Week 2

Topic: Introduction 

A Bank Reconciliation statement is prepared by the accountant when the cash book bank statement doesn’t match the Pass Book. This is done with the intention of knowing the cause of the difference. Usually, all firms open current Bank Accounts as there are so many transactions to record in the bank column of the cash book. Bank also maintain separate ledger accounts for each firm customer and supplies a copy of the account to the firm for information. Now considering that all the transactions with the bank are entered in both the  Cash Book and Pass Book, the balances of the two books must therefore tally with each other. Unfortunately, the two balances hardly tally. In light of this, therefore, a Bank Reconciliation Statement is prepared to reconcile the difference between the Bank Balance shown by the Cash Book and Bank Pass Book. To learn more, Click here

Week 3

Topic: Understanding the End of the Year Adjustment in Profit and Loss Accounts

These are adjustments which are made in the profit and loss account and balance sheet,  thus will ensure that the final accounts of an organization show the true view of their transaction, they are closing adjustments or amendments made in the book at the end of the accounting period in order to match revenue with expenses. this will show an accurate picture of the accounts. they are shown as additional information after the trial balance.

The Profit and Loss Account starts with the credit from the Trading Account in respect of gross profit (or debit if there is gross loss). Thereafter, all those expenses or losses which have not been debited to the Trading Account are debited to the Profit and Loss Account. If there is any income besides the gross profit, it will also be transferred to the credit of the Profit and Loss Account. To learn more, Click here

Week 4

Topic: Provision for Bad Debt

The provision for bad debts has to do with making room in the balance sheet account for instances when a client is unable to redeem their debt. Also known as Allowance for Bad Debts, it makes provision for Bad Debts as a contra asset account (i.e., an asset account with a credit balance). It is used along with the account Accounts Receivable in order to report the net realizable value of the accounts receivable. Provision for Bad Debts might also be an income statement account also known as Bad Debt Expense or Uncollectible Account Expense. In this situation, the Provision for Bad Debts reports the credit losses that pertain to the period shown on the income statement. To learn more, Click here

Week 5

Topic: What are Bad Debts Recovered

Sometimes, it so happens that the bad debts previously written off get recovered. When this happens, the amount so recovered is a gain and hence credited to the bad debt recovered account. Such recovered debts are known as Bad Debt Recovered. When bad debts are recovered from debtors after closing off a financial year, such recovered debt will be shown as income.

Bad Debt Recovered can also be defined as debt from a loan, credit line/accounts receivable which is recovered either in whole or in part after it has been written off or classified as a bad debt. Because it generally generates a loss when it is written off, a bad debt recovery usually produces income. To learn more, Click here

Week 6

Topic: What is Depreciation of Fixed Assets?

Depreciation is the systematic reduction in the recorded cost of a fixed asset.  Examples of fixed assets that can be depreciated are buildings, furniture, leasehold improvements, and office equipment. The only exception is land, which is not depreciated (since land is not depleted over time, with the exception of natural resources). The reason for using depreciation is to match a portion of the cost of a fixed asset to the revenue that it generates; this is mandated under the matching principle, where you record revenues with their associated expenses in the same reporting period in order to give a complete picture of the results of a revenue-generating transaction. The net effect of depreciation is a gradual decline in the reported carrying amount of fixed assets on the balance sheet. To learn more, Click here

Week 8

Topic: Straight Line method

 This method makes provision for an equal amount to be charged as depreciation for each year of useful life.  It is calculated by thus; cost of the asset is less residual value divided by the number estimated as the useful life span. It is said to be the easiest to calculate and consists of depreciating the value of an asset in equal instalments over the cost of its useful life. In order to calculate straight-line depreciation, you’ll need the following information:

• The asset’s initial cost
• The salvage value (Its estimated value at the end of its useful life)
• The useful lifespan, in years. To learn more, Click here

Week 9

Topic: Treatment of Depreciation in Profit and Loss Accounts and Balance Sheet

Introduction

To learn more, Click here