Financial Accounting KNEC notes


Introduction to accounting:

  • Definition of terms used in accounting
  • Users of accounting information
  • Information needs
  • Qualities of good accounting information
  • Nature of accounting equation
  • Effects of business transactions

The ledger and the trial balance

  • Definition of a ledger and an account
  • Importance of a ledger
  • Relationship between a ledger and an account
  • Classifications of ledgers
  • Nature of double- entry system
  • Definition of a trial balance
  • Importance of a trial balance
  • Balancing off of accounts
  • Definition of a trial balance
  • Importance of a trial balance

Types of errors and their correction

  • Types of errors that do not affect the agreement of a trial balance
  • Types of errors that do not affect the agreement of a trial balance
  • Types of errors that affect the agreement of a trial balance
  • Functions of suspense account
  • Corrections of errors using a

Source documents

  • Meaning of source documents
  • Types of source documents
  • Uses of source documents
  • Relationship between source documents and books of account

Books of original entry

  • Definition of books of original entry
  • Classifications of books of original entries
  • Preparation of books of original entry
  • Posting transactions from the books of original entry to the ledger

The cashbook

  • Definition of cashbook
  • Types of cashbook
  • Types of discounts
  • Recording transactions in a cashbook

Petty cashbook

  • Definition of petty cashbook
  • Imprest system
  • Purpose of petty cash
  • Preparation of petty cashbook

Bank reconciliation statements

  • Definition of bank reconciliation statements
  • Purpose of  preparing bank reconciliation statements
  • Causes of the differences between bank statements and the cashbook balance
  • Steps/procedure in preparing bank reconciliation statement

Control accounts

  • Definition of control accounts
  • Uses of control accounts
  • Preparation of control account

Accounting concepts, conventions and bases

  • Definition of accounting concepts, conventions and bases
  • Types of accounting concepts, conventions and bases

Capital and revenue expenditure

  • Definition of capital and revenue expenditure
  • Double entry system for revenue and capital expenditure
  • Classification of expenditure

Adjustments to final accounts

  • Meaning of final accounts
  • Purpose of final accounts adjustment
  • Procedure of making adjustments in final accounts

Accounting for fixed assets

  • Definition of depreciation
  • Causes of depreciation
  • Reasons for providing for depreciation
  • Methods for providing for depreciation
  • Double entry for depreciation.
  • Accounting for disposal of fixed assets
  • The fixed asset movement schedule

Final Accounts for sole-proprietorship

  • Definition of final accounts
  • Types of final accounts
  • Preparation of final accounts

Non-Profit Making Organizations

  • Definition of Non-profit making Organization
  • Differences between  Receipts and payment accounts
  • Relationship between Income and Expenditure accounts
  • Preparation of final accounts of Non-profit making Organizations

Emerging Trends and Issues in Financial Accounting

  • Emerging trends and issues in financial accounting
  • Challenges posed by emerging trends and issues in financial accounting
  • Coping with the challenges posed by emerging trends and issues in financial accounting to managing emerging financial issues

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