AAT – Financial Accounting: Preparing Financial Statements

This course teaches students how to prepare financial statements, such as profit or loss statements and balance sheets for sole traders and partnerships, starting from a trial balance. It equips them with both the theoretical knowledge and practical skills necessary for producing final accounts in a professional setting, whether manually or using accounting software.

Students will learn double-entry bookkeeping to accurately record transactions and make necessary adjustments like accruals to reflect the true financial status of the organization. They will understand depreciation methods for non-current assets and provisions for doubtful debts to enhance financial reporting accuracy.

The course also emphasizes the importance of final accounts’ format and usage. Students will refine their skills in error analysis and correction in ledgers and perform reconciliations to verify account balances with external documents like bank statements. Additionally, they will be introduced to accounting ratios to better assess and interpret the financial health of businesses.

Ethical practices, including integrity, objectivity, and professional competence, are integrated throughout the course to ensure students apply ethical principles in their accounting work.

Learning Outcomes:
On successful completion of this subject, you should be able to:

1. Understand the accounting principles underlying final accounts preparation
2. Understand the principles of advanced double-entry bookkeeping
3. Implement procedures for the acquisition and disposal of non-current assets
4. Prepare and record depreciation calculations
5. Record period end adjustments
6. Produce and extend the trial balance
7. Produce financial statements for sole traders and partnerships
8. Interpret financial statements using profitability ratios
9. Prepare accounting records from incomplete information