Module 01: Role of Accounting and Finance: This module is simply an introduction to the course and accounting and finance in general. In particular you must be aware of the terms such as separate legal entity, limited liability and the differences between partnerships and companies. Generally this material will only be examined in multi-choice questions.
Module 02: Financial Position: This module introduces you to the balance sheet and the underlying assumptions and conventions of accounting. All these concepts must be fully understood as they are the basis to the preparation and presentation of financial statements.
Module 03: Financial Performance: This module describes the Income statement. In particular you must fully understand the difference between cash and accrual accounting (an almost guaranteed assignment and/or test/exam question) as well as the definition of revenue and expenses – in particular when these items should be recognised.
Module 04: Cash Flows and Equity: This module introduces you to the cash flow statement. You must be familiar with the three categories of a cash flow statement (operating, investing, and financing). You must understand depreciation, the differences between the cash flow statement and the income statement and how to value inventory. Furthermore you must understand the Audit report.
Module 05: Financial Statement Analysis One: This module is about interpreting financial statements. The module is very important as it makes up a large percentage of the test and (generally) 10-15% of the exam. You must fully understand how to calculate ratios and the significance of each ratio. This does not mean memorising the formula, but simply understanding how the variables relate. i.e. ROA = EBIT/Total Assets. Quite clearly this relates to profitability. What’s more you must ensure you understand what causes these ratios to change over time.
Module 06: Cost-volume-Profit Analysis: This module introduces students to management accounting. At the end of this module you must be able to identify the different costs, (variable costs, fixed costs etc) as well as understand the Cost Volume Profit Model.
Module 07: Budgeting: There are two aspects to this module. The first part of this module looks at the master budget. You must understand why a firm would prepare a master budget and the benefits of budgeting. The second part is about operation budgeting. This is a very important concept. You must understand how to prepare the table and how to calculate the corresponding figures.
Module 08: Budget and Control: This module teaches students how to evaluate performance. By the end of this module students must understand and calculate favourable and adverse variances. They must understand how to prepare a flexed budget and also understand why favourable variances can be just as important as adverse.
Module 09: Costing: There are two concepts that must be learned in this module – relevant costing and full absorption costing. I have provided a good explanation of these concepts with exercises. Give them a try and then get plenty of practice.
Module 10: Time Value of Money: This module introduces students to the time value of money. Many students lose focus with modules 10 and 11 and by the time the exam arrives they panic and lose 20+marks. So stay focused and make sure you understand EVERYTHING. In particular you must understand the two present value tables and when you must use them. Conceptually you must understand why the value of money is more now then later.
Module 11: Capital Investment: Practice! Practice! Practice! Understand the four capital budgeting alternatives and remember to use CASH FLOWS not accounting profits for NPV! Don’t forget sunk costs, opportunity costs and depreciation and tax.
Module 12: Financial Management: Understand the operating cash cycle, why it is important and what causes the operating cash cycle to rise or fall. Further to this you must also be aware of the advantages and disadvantages of debt and equity.