Course Description

This course includes both theoretical and practical concepts of financial accounting, enabling students to understand the working principles of financial accounting and apply these concepts in developing applications related to the financial sector.

Course Objectives

The general objective of this course is to develop a conceptual understanding of the fundamentals of the financial accounting system.

Unit Contents

1. Theoretical Framework

Teaching Hours: 4 hrs

This unit covers the meaning and scope of accounting, including its procedural aspects, sub-fields, users of accounting information, its relationship with other disciplines, limitations, and the role of accountants in society. It also explores accounting concepts, principles, and conventions, providing an overview of accounting concepts, principles, and conventions, qualitative characteristics of financial statements, and fundamental accounting assumptions. Additionally, it discusses accounting standards, focusing on their concepts, objectives, benefits, and an overview of Nepal accounting standards. The unit concludes with an examination of accounting policies, including their meaning, selection, and changes.

2. Accounting Process

Teaching Hours: 10 hrs

This unit deals with the books of accounts leading to the preparation of a trial balance. It includes journal entries, the double entry system, its advantages, concepts of transactions and events, classification of accounts, golden rules of accounting, and the advantages of journal, ledger, trial balance, and subsidiary books, including cash books. It also covers capital and revenue expenditures and receipts, contingent assets and liabilities, and errors, including rectifications.

3. Bank Reconciliation Statement

Teaching Hours: 4 hrs

This unit introduces bank reconciliation statements and explains how to ascertain the causes of differences between the bank balance in the cash book and the pass book. It also covers the procedure for reconciling the cash book balance with the pass book balance and the importance of bank reconciliation statements.

4. Depreciation Accounting

Teaching Hours: 4 hrs

This unit addresses concepts of depreciation, objectives for providing depreciation, methods for providing depreciation, and accounting for depreciation.

5. Inventories

Teaching Hours: 4 hrs

This unit covers the meaning, basis, and technique of inventory valuation, inventory recording systems, and stock-taking.

6. Preparation of Final Accounts for Sole Proprietors

Teaching Hours: 6 hrs

This unit explores the concept of closing entries concerning trading and profit & loss accounts. It includes the concept of accrual basis of accounting, matching concept, dual aspects, and manufacturing accounts. Additionally, it covers the preparation of balance sheets, including the arrangement and classification of assets and liabilities.

7. Introduction to Company Accounts

This unit introduces the meaning of a company, its salient features, and types of companies. It also covers the preparation of financial statements, share capital and its types, debentures and their types, and the distinction between debentures and shares. The unit concludes with the issue and redemption of preference shares.

Laboratory Works

Laboratory works should be carried out using any accounting packages (such as Tally, Fact, etc.) to implement the concepts discussed in the above-mentioned topics.