CIMA Fundamentals of Financial Accounting Syllabus (C02)- Part-time, Full-time & Online
The main purpose of the Fundamentals of Financial Accounting CIMA course syllabus is to enable you to prepare financial statements for single entities. The conceptual and regulatory framework within which these statements are prepared requires an appreciation for the various valuation alternatives, the role of accounting standards and legislation. You will develop the ability to apply accounting techniques and systems which facilitates the preparation of accounts for different kinds of organisations and types of transactions.
You are introduced to the calculation of basic ratios to measure financial performance and the use of controls for accounting systems and the nature of errors and fraud.
There are many different options for this particular CIMA course including; part-time, full-time and online study with different training providers.
The C02 syllabus is divided into four subject areas and study weightings as follows:
A. Conceptual and regulatory framework 20%
B. Accounting systems 20%
C. Preparation of accounts for single entities 45%
D. Control of accounting systems 15%
A. Conceptual and regulatory framework
The successful completion of each stage of the C02 module will enable candidates to:
1. Explain the concepts of ﬁnancial accounting.
a) explain the need for accounting records;
b) identify user groups and the characteristics of ﬁnancial statements;
c) distinguish between ﬁnancial and management accounts;
d) identify the underlying assumptions, policies and changes in accounting estimates;
e) explain capital and revenue, cash and proﬁt, income and expenditure, assets and liabilities;
f) distinguish between tangible and intangible assets;
g) explain the historical cost convention;
h) identify alternative methods of valuing assets, and their impact on proﬁt measures and statement of ﬁnancial position values.
2. Explain the regulatory and legal framework for ﬁnancial accounting.
a) explain the inﬂuence of legislation on published accounting information for organisations;
b) explain the role of accounting standards in preparing ﬁnancial statements;
c) explain approaches to creating accounting standards.
B. Accounting systems
1. Prepare ledger accounts and supporting documents.
a) explain the principles of double-entry bookkeeping;
b) prepare cash and bank accounts, and bank reconciliation statements;
c) prepare petty cash statements under an imprest system;
d) prepare accounts for sales and purchases, including personal accounts and control accounts;
e) prepare nominal ledger accounts, journal entries and a trial balance;
f) prepare accounts for indirect taxes;
g) prepare accounts for payroll;
h) prepare a non-current asset register.
2. Explain the use of codes in accounting systems.
a) explain the need for accounting codes;
b) illustrate the use of simple coding systems.
C. Preparation of accounts for single entities
1. Prepare accounts for transactions.
a) prepare accounts using accruals and prepayments;
b) prepare accounts for bad debts and allowances for receivables;
c) prepare accounts using different methods of calculating depreciation and for impairment values;
d) prepare accounts for inventories;
e) prepare manufacturing accounts;
f) prepare income and expenditure accounts;
g) prepare accounts from incomplete records;
h) prepare accounts for the issue and redemption of shares and debentures.
2. Prepare ﬁnancial statements for a single entity.
a) prepare ﬁnancial statements from trial balance;
b) prepare a statement of cash ﬂows.
3. Demonstrate the use of basic ratios in ﬁnancial performance.
a) calculate basic ratios.
D. Control of accounting systems
1. Explain the need for external controls on a business.
a) identify the requirements for external audit and the basic processes undertaken;
b) explain the meaning of fair presentation;
c) distinguish between external and internal audit.
2. Explain internal control techniques.
(a) explain the purpose and basic procedures of internal audit;
(b) explain the need for ﬁnancial controls;
(c) explain the purpose of audit checks and audit trails.
3. Demonstrate how accounting errors are corrected.
(a) explain the nature of accounting errors;
(b) prepare accounting entries for the correction of errors.
4. Explain the nature of fraud.
(a) explain the nature of fraud;
(b) explain the basic methods of fraud prevention and detection.
CIMA Fundamentals of Financial Accounting Past Papers
Three past paper questions have been printed below to give you an idea of the types of questions likely to be found in the C02 syllabus assessment.
a) Identify four potential user groups of financial statements.
b) Explain why user groups in general need accounting information, and state the information they require. Choose two examples of user groups and give the specific information they require and the purpose for which they would require it.
c) Identify and explain three characteristics of useful financial information.
(Total = 20 marks)
Explain each of the following four accounting concepts, and give an example of its application:
a) Going concern. (5 marks)
b) Accruals. (5 marks)
c) Consistency. (5 marks)
d) Prudence (or conservatism). (5 marks)
(Total = 20 marks)
a) Define depreciation. (2 marks)
b) State the purpose of depreciation (4 marks)
c) A transport company started business on 1 January 1998 and purchased truck (A) for£80,000. Truck (A) was destroyed in a road accident on 1 March 1999 and the insurance company paid out £60,000 to the transport company.
On 1 April 1999, truck (B) was purchased for £90,000.
On 1 July 1999, car (C) was purchased for £20,000.
On 1 August 2000, car (C) was traded in for car (D) which cost £25,000, less a part-exchange allowance on car (C) of £15,000.
The depreciation policy of the company is:
• depreciate trucks at 40% each year on the reducing balance;
• depreciate cars at 25% each year using a straight-line basis;
• assume a residual value for cars of 10% of the original cost;
• if a vehicle is owned for part of a year, calculate depreciation according to the number of months for which the vehicle is owned. The year end of the company is 31 December.
Write up the following ledger accounts:
• motor vehicles at cost account; (4 marks)
• provision for depreciation on motor vehicles account; (6 marks)
• disposal of motor vehicles account. (4 marks)
You should include entries for each relevant year, and work to the nearest £.
(Total = 20 marks)