Level III Diploma in Manual Bookkeeping
Type of Examination:
Centre-based Examination
Prior knowledge:
Competence up to ICB Level II Bookkeeping
Prerequisites:
Candidates must have achieved the following ICB Bookkeeping examinations, or gained exemptions from them, before they may apply for the Level III Manual Bookkeeping qualification:
Candidates must also:
- have completed an ICB Level II Bookkeeping examination within the last two years and additionally hold valid student registration,
- or hold valid Associate Member status.
Syllabus Detail:
Students must be able to demonstrate their ability to understand and carry out the following functions:
(1) Stock Valuation
Prepare stock valuations and be able to:
- explain the accounting concept relevant to stock valuation
- apply methods of FIFO and AVCO
- calculate the value of stock
(2) Accruals and Pre-payments
Identify the need to provide for accruals and pre-payments and be able to:
- identify the need and purpose of accruals and pre-payments
- calculate accruals and pre-payments
- account for accruals and pre-payments
- prepare relevant journal entries
- show the effect on the final accounts
(3) Provision for Bad Debts
Account for and prepare a provision for bad debts and be able to:
- identify the need to provide such a provision
- calculate the provision
- account for both an increase and decrease in the provision
- prepare the relevant journal entry
- show the effect on the final accounts
(4) Acquisition and Disposal of Assets
Account for the acquisition and disposal of fixed assets and be able to:
- correctly identify the original cost of the asset disposed
- correctly identify and record all acquisition and disposal costs and revenues in the appropriate accounts
- correctly calculate and determine the cumulative depreciation to date on a disposal
- prepare the disposal account
- determine profit and or loss on sale of the asset
(5) Incomplete Records
Prepare a set of final accounts for a sole trader from incomplete records and be able to:
- determine the opening value of capital through the accounting equation
- determine bank and cash balances
- prepare ledger accounts to determine missing values for sales, purchases, expenses and drawings - use mark up and margin
- identify capital expenditure
- identify stock loss
- prepare adjustments for accruals and pre-payments
- prepare profit and loss account and balance sheet
(6) Partnerships
Prepare a set of final accounts for a partnership and be able to:
- define the term partnership
- identify the characteristics of a partnership agreement
- prepare relevant partnership accounts: capital accounts and current accounts
- provide for adjustments at the year end - accruals and pre-payments
- prepare profit and loss account, appropriation account and balance sheet
- prepare accounting entries for the admission and retirement of a partner including the treatment of goodwill
(7) Limited Company Accounts
Prepare a set of final accounts for a Limited Company. Be able to:
- define the term Limited Company
- understand its legal status
- identify sources of capital - shares and debentures
- distinguish between capital and revenue reserves
- define shareholders equity
- account for the issue of shares and debentures
- account for dividends paid
Prepare a set of final accounts to include adjustments and provisions, debenture interest accrued and provision for corporation tax
(8) Non-profit Making Organisations
Prepare financial statements for ‘not for profit organisations' and be able to:
- identify the characteristics of such organisations and their accounting requirements
- prepare an opening statement of affairs
- distinguish between a receipts and payments account and an income and expenditure account
- make adjustments for accruals, pre-payments, depreciation and the treatment of subscriptions in arrears and in advance
- prepare the Income and Expenditure account
- prepare a Balance Sheet
- prepare a brief summary of the accounts for the membership
(9) Interpretation of Financial Statements
Calculate and use ratios and performance indicators to assess financial performance and, calculate and interpret results from the following perspective:
- profitability
- liquidity
- utilisation
- financial position
Profitability to include:
- return on capital employed
- gross profit % to sales
- net profit % to sales
Liquidity to include:
• current ratio
• acid test; and working capital ratios as:
- debtors collection period
- creditors payment period
- stock turnover
Utilisation:
Financial position:
- gearing/leverage
- interest cover
Analyse results and comment on performance and significant trends over time.
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