Principles of Accounting
SPM · 57 topics available
Form 4
Chapter 1 · Introduction to Accounting
Accounting, Its Sub-fields, Careers and Professional Bodies
Understanding what accounting means, its main sub-fields, career opportunities and the professional bodies that regulate the accounting profession in Malaysia.
OpenThe History and Development of Accounting
Tracing accounting from ancient times, Luca Pacioli's contribution to double-entry bookkeeping, and its development into the computerised era.
OpenFinancial Statements
An introduction to the two main financial statements: the trading and profit & loss account that computes profit, and the statement of financial position that shows assets, liabilities and equity.
OpenAssumptions, Principles and Limitations in Accounting
Exploring the basic accounting assumptions and concepts such as going concern, accrual, consistency and prudence, as well as the limitations of accounting information.
OpenBusiness Entities
Understanding the separate entity concept and the three main forms of business entity in Malaysia: sole proprietorship, partnership and limited company.
OpenChapter 2 · Classification of Accounts and the Accounting Equation
Components of the Trading and Profit & Loss Account and the Statement of Financial Position
Getting to know the three main components of the financial statements — the trading account, the profit and loss account, and the statement of financial position — and what each one measures.
OpenItems in Each Component of the Trading and Profit & Loss Account and the Statement of Financial Position
Classifying items into revenue, expenses, assets, liabilities and equity so that each is placed in the correct component of the financial statements.
OpenThe Accounting Equation
Understanding the accounting equation Assets = Liabilities + Owner's Equity and how every transaction keeps it in balance.
OpenContra Entries and the Chart of Accounts
Understanding contra entries in the cash book and debtor/creditor set-offs, and how the chart of accounts organises all the accounts of a business.
OpenChapter 3 · Business Documents as Sources of Information
Business Documents
Recognising the role of business documents as evidence of transactions and distinguishing source documents from non-source documents.
OpenSource Documents
Identifying the main source documents — invoice, receipt, credit note, debit note and cheque — and the books of first entry they relate to.
OpenNon-Source Documents
Understanding non-source documents — the quotation, purchase order, delivery order and statement of account — which support a transaction but are not recorded in the accounting books.
OpenChapter 4 · Books of First Entry (Journals)
Books of First Entry
Meet the books of first entry and their role before transactions are posted to the ledger.
OpenThe General Journal
Learn how the General Journal records special transactions such as opening entries and credit asset purchases.
OpenSpecial Journals
Explore the four special journals and the source documents used to record credit transactions.
OpenThe Cash Book
Understand the two- and three-column Cash Book, contra entries and the treatment of discounts.
OpenThe Petty Cash Book
Learn how the Petty Cash Book and the imprest system manage small routine payments.
OpenChapter 5 · The Ledger
The Ledger
Get to know the ledger, T-accounts, posting from journals and balancing accounts.
OpenThe Double-Entry System
Master the rules of debit and credit at the heart of the double-entry system.
OpenControl Accounts
Understand the debtors and creditors control accounts as a check on ledger accuracy.
OpenChapter 6 · Trial Balance
The Trial Balance
Preparing a trial balance from ledger balances, identifying debit and credit balances, and understanding the errors it does and does not reveal.
OpenThe Link between the Trial Balance, Closing Inventory and Financial Statements
Understanding how the trial balance, closing inventory and financial statements are linked, and why closing inventory appears twice.
OpenChapter 7 · Financial Statements of a Sole Proprietor without Adjustments
Trading and Profit & Loss Account
Preparing the Trading and Profit & Loss Account to work out gross profit, net profit and cost of goods sold.
OpenStatement of Financial Position
Preparing a Statement of Financial Position showing non-current assets, current assets, liabilities and owner's equity.
OpenClosing the Revenue, Expense and Inventory Accounts at the End of the Financial Period
Making the closing entries for revenue, expense and inventory accounts at the end of the financial period.
OpenChapter 8 · Adjustments at the Balance Date and Preparation of Sole Proprietor Financial Statements
Cash Basis and Accrual Basis Accounting and Types of Adjustments
Distinguishing the cash basis from the accrual basis, and getting to know the four types of adjustment made at the end of the accounting period.
OpenAdjustments to Nominal Accounts
Computing and recording adjustments for prepaid expenses, accrued expenses, accrued income and prepaid income in the nominal accounts.
OpenBad Debts, Bad Debts Recovered and Provision for Doubtful Debts
Recording bad debts written off, bad debts recovered, and creating and adjusting the provision for doubtful debts.
OpenDepreciation and Accumulated Depreciation
Computing depreciation using the straight-line and reducing-balance methods, and recording accumulated depreciation.
OpenDisposal of Non-Current Assets for Cash
Computing the gain or loss on the disposal of a non-current asset sold for cash and recording it in the disposal account.
OpenAdjusted Trial Balance
Preparing the adjusted trial balance after incorporating end-of-period adjustments and ensuring it still balances.
OpenFinancial Statements with Adjustments
Incorporating all adjustments into the profit and loss account and statement of financial position to obtain the correct net profit and position.
OpenChapter 9 · Correction of Errors
Correction of Errors
Identifying the two types of accounting errors and how to correct them, including the use of a suspense account for errors that affect the trial balance.
OpenFinancial Statements After Correction of Errors
Determining how correcting errors affects net profit and the statement of financial position, and preparing a statement of corrected profit.
OpenForm 5
Chapter 1 · Analysis and Interpretation of Financial Statements for Decision Making
Chapter 2 · Incomplete Records
Introduction to Incomplete Records
Understanding what incomplete records (single entry) are, why they occur and the methods for finding profit from them.
OpenComparison Method
Finding profit from incomplete records by comparing opening and closing capital and adjusting for drawings and additional capital.
OpenAnalysis Method
Rebuilding full accounts from incomplete records using control accounts to find credit sales, credit purchases and other figures.
OpenChapter 3 · Accounting for Internal Control
Cash Control
Internal control procedures a business uses to safeguard its cash against theft, loss and error.
OpenBank Reconciliation Statement
Explaining why the cash book balance differs from the bank statement balance and how to reconcile them.
OpenCash Budget
A forecast of cash receipts and payments used to plan the future cash position.
OpenChapter 4 · Accounting for Partnerships
Partnership Business
The features of a partnership business, the partnership agreement, and the Partnership Act 1961.
OpenProfit and Loss Appropriation Account
How a partnership's net profit is shared among the partners through the appropriation account.
OpenPartners' Equity and Partnership Financial Statements
Partners' capital and current accounts, and how equity is shown in the financial statements.
OpenDissolution of Partnership
Winding up a partnership through the realisation account and distributing the balance to partners.
OpenChapter 5 · Accounting for Companies Limited by Shares
Introduction to Companies Limited by Shares
Understanding what a company limited by shares is, its features, and the difference between a Sdn. Bhd. and a Bhd.
OpenTypes of Capital and Issue of Shares
Distinguishing authorised, issued and paid-up capital, and understanding the issue of ordinary and preference shares.
OpenOwner's Equity of a Company Limited by Shares
Identifying the components of a limited company's owner's equity — share capital, reserves and retained earnings — and how they are presented.
OpenCash Dividends
Understanding cash dividends, distinguishing interim and final dividends, and calculating preference and ordinary share dividends.
OpenChapter 6 · Accounting for Clubs and Societies
Clubs and Societies
Understanding clubs and societies as non-profit organisations and how their accounting differs from a profit-oriented business.
OpenReceipts and Payments Account
Preparing the Receipts and Payments Account as a summary of a club's cash book showing all cash receipts and payments for the period.
OpenMembers' Subscriptions Account
Preparing the Members' Subscriptions Account and computing the subscription for the current year after adjusting for subscriptions in arrears (accrued) and in advance (prepaid).
OpenIncome and Expenditure Account
Preparing the Income and Expenditure Account to determine a club's surplus or deficit — the non-profit equivalent of the Profit and Loss Account.
OpenStatement of Financial Position of a Club
Preparing a club's Statement of Financial Position and computing the accumulated fund, the non-profit equivalent of capital.
OpenChapter 7 · Cost Accounting
Types of Cost and Work in Progress
Classifying costs into direct/indirect and fixed/variable, and understanding work in progress in manufacturing.
OpenManufacturing Account
Preparing a manufacturing account to compute prime cost and the production cost of finished goods.
OpenBreak-Even Analysis
Calculating contribution per unit and the break-even point, and understanding its use in decision-making.
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