AccountingQ&A by dot point

Complete the Advanced Higher Accounting project: select a FTSE 100 company's annual report, apply the accounting regulatory framework, calculate and interpret accounting ratios, and evaluate the organisation's financial performance and position in a structured written report worth 60 marks.

Prepare the accounts of a partnership - the appropriation of profit, partners' capital and current accounts - and account for changes in the partnership such as the admission or retirement of a partner, including the treatment of goodwill and the revaluation of assets.

Explain the role of the accounting regulatory framework - the conceptual framework, the qualitative characteristics of useful information, key International Accounting Standards, and the fundamental ethical principles - and apply them to judge how transactions should be reported.

Calculate and interpret accounting ratios across the categories of profitability, liquidity, efficiency, gearing and investment, and use them to analyse and evaluate an organisation's financial performance and position, recognising the limitations of ratio analysis.

Prepare the published financial statements of a limited company - the statement of profit or loss, the statement of financial position and the statement of changes in equity - in the format prescribed by IAS 1, incorporating adjustments such as depreciation, taxation, dividends, transfers to reserves and rights or bonus issues.

Prepare a statement of cash flows for a limited company in accordance with IAS 7, classifying cash flows into operating, investing and financing activities, reconciling profit before tax to cash generated from operations, and interpreting the result.

Prepare a cash budget and supporting functional budgets, explain the purpose and benefits of budgeting and budgetary control, and use a flexible budget to compare actual results with a budget adjusted to the activity level achieved.

Apply relevant costing to short-term decisions - special order pricing, make-or-buy, the use of a limiting factor, and discontinuing a product - identifying relevant and irrelevant costs and ranking options by contribution.

Appraise a capital investment using the payback period, the accounting rate of return, net present value and the internal rate of return, recognising the role of the time value of money and the strengths and limitations of each method.

Calculate the cost of output using job costing for one-off or batch work and process costing for continuous production, including the treatment of equivalent units, normal loss, abnormal loss and abnormal gain.

Distinguish marginal and absorption costing, calculate profit under each method and reconcile the difference, and apply cost-volume-profit analysis - contribution, break-even point, margin of safety and target profit.

Calculate and interpret cost variances - direct material price and usage, direct labour rate and efficiency, variable and fixed overhead variances, and sales variances - and reconcile budgeted profit or cost to actual through a statement of variances.