Transactions are being recorded in 5 different types of accounts namely:

• Asset
• Liability
• Owners Equity/ Capital
• Revenue
• Expenses

To remember this I use the following mnemonic A.L.O.R.E , later I will explain why I placed them in the following order.

So here is the format in which your ledger accounts (commonly called T-accounts) should look like:

Ledger Account

So now you know how your ledger account should look like, congrats!

-The concept of audit and other assurance engagements
-Statutory audits
-The regulatory environment and corportate governance-Proffessional ethics and the ACCA’s code of ethics and conduct

B-Internal Audit
-Internal audit and corporate governance
-Differences between the external auditor and the internal audint function
-The scope of the internal audit function-Outsourcing the internal audit function
-Internal audit assignments
C-Planning and risk assessment
-Objective and general principles
-Assessing the riks of material mistatement
-Understanding the entity and its environment
-Materiality, fraud, laws and regulations
-Analytical procedures
-Planning an audit
-Audit documentation

D-Internal control
-Internal control systems
-The uses of internal control systems by auditors
-Transaction  cycles
-Tests of control
-The evaluations of internal control components
-Communication on internal control
E-Audit evidence
-Uses assertions by auditors
-Audit procedures
-The audit of specific items
-Audit sampling and other means of testing
-Computer-assisted audit techniques
-The work of others
-Not-for-profit organizations
F-Review
-Subsequent events
-Going concern
-Written representations
-Audit finalisation and the final review
G-Reporting
-Audit reports
-Reports to management
-Internal audit reports
The above is what you will be required to learn and apply for the forthcoming exams. By the end of this, I hope to compile all this posts into an info product and offer it for free for subscribers to tbe blog
As you all know, this paper is 90% application and 10% knowledge so it is most important if you could answer atleast 1 exam type questions after each blog post, and dont forget to email me if you need help.

So for the coming December sitting I will be writing the F4 , F5 and F6 papers as well as going to school full time on my Accounting and Finance degree.

So what is in for the Accounting Student and you? With my next 3 papers being written based exams I will have more text questions which I can write posts about as opposed the more mathematically demanding ones like F3 and F2. So this month will see the introduction of 3 more categories namely :

F4 : Questions&Answers

F5: Questions&Answers

F6: Questions&Answers

In the various categories I will be answering questions on various chapters and topics trying to do my best to offer the best quality I can, and as usually I will highly entertain any comments and questions.

Hey guys first I will like to apologize for the long abscence, I know in the past I was more active helping out fellow accounting students like myself but I have been flooded with lots and I mean lots of work given that I am pursuing an ACCA qualification as well as a BA (hons).

Okay, enough about me! You tell me, what have you being upto? What will you like to know more about in Accounting? Just respond to the poll above and leave a comment and I’ll be all working on it!

The income statement, otherwise known as the Profit and Loss account according to the UK accounting terminology shows the revenues and expenses of the business and eventually if the business as made any profits or incurred any loss.

This financial statement records all transactions the business have taken part in, this helps to deduce if the company has being profitable or has incurred a loss. The income statement can be broken down into two parts, with the first part resulting in the Gross Profit / Loss and the second part resulting in the Net Loss / Profit.

The first part is done by taking the Sales (whatever the company sells it can be a product or service) less (minus) the cost of sales (that is the cost of producing and selling the product/service). The result will be called your Gross Profit.

Sales – Cost of Goods Sold = Gross Profit

The second part involves taking the Gross Profit figure less the other expenses which are not directly related with the production of your goods/service. Examples of such expenses are rent, wages, sundry expenses etc.

The resulting figure is called your Net Profit/Net Loss. I will show you the basic pro-forma and hopefully it will make things clearer and show you where everything goes.