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Financial Accounting

5 dot points across 5 inquiry questions. Click any dot point for a focused answer with worked past exam questions where available.

How are profits, capital and changes of ownership accounted for when a business is owned by partners rather than a single proprietor or shareholders?

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.
A focused answer to the SQA Advanced Higher Accounting partnership content, covering the appropriation account, capital and current accounts, interest on capital and drawings, partners' salaries, and the treatment of goodwill and asset revaluation on the admission or retirement of a partner.
12 min answer →

Why is financial reporting regulated, and how do accounting standards and ethical principles shape the accounts a company publishes?

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.
A focused answer to the SQA Advanced Higher Accounting requirement on the regulatory framework, covering the conceptual framework and qualitative characteristics, the key International Accounting Standards examined, the regulatory bodies, and the fundamental ethical principles that govern accountants.
12 min answer →

How do you turn a set of financial statements into a judgement about how well a business is performing and how safely it is financed?

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.
A focused answer to the SQA Advanced Higher Accounting interpretation requirement, covering the profitability, liquidity, efficiency, gearing and investment ratios, how to interpret and evaluate them in context, and the limitations of ratio analysis.
13 min answer →

How does a limited company prepare its published financial statements in the format required by international accounting standards?

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.
A focused answer to the SQA Advanced Higher Accounting requirement to prepare a limited company's published financial statements in IAS 1 format, covering the statement of profit or loss, the statement of financial position, the statement of changes in equity and the common year-end adjustments.
13 min answer →

How do you reconstruct where a company's cash came from and went, and why can a profitable company still run short of cash?

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.
A focused answer to the SQA Advanced Higher Accounting statement of cash flows, covering the IAS 7 classification into operating, investing and financing activities, the reconciliation of profit before tax to cash from operations, the treatment of working-capital changes, and interpreting why profit and cash differ.
13 min answer →