Accountancy II

Associate Banking Diploma — Core Subject Accountancy II
Learning Objectives - To enable the candidate to prepare and use accounting information in order to understand and interpret the financial affairs of business entities for decision making purposes. - To alert the candidate to limitations of accounting information.
SYLLABUS:
1.	An overview of basic accounting Concepts: - Distraction between financial accounting management accounting and cost accounting. - Review of the double entry system. - Preparation of Financial Statements. - Distinctions between cash flow and profit flows.
2.	Accounting Practice: - An overview of relevant accounting standards/guidelines and recommendations. - Candidates will be aware of the principles underlying the valuation of long-term contracts but computational questions will not be asked. - Bank of Tanzania Act, 1995. - Banks and Financial Institutions Act, 1991 and any other relevant legislation. - The requirements of Companies Ordinance (Cap 212) 1932. - The calculation of distributable profits. - The nature and treatment of taxation in accounts. - Nature and limitations of standards and conventional accounting procedures.
3.	Assessment of Business Performance: • The use of Accounting ratios and their implications to business performance. Profitability ratios, rates of return, earnings per share, interest rate risk etc. • Liquidity ratios, liquidity risk analysis, and currency risk. • Working capital requirements, capital adequacy, large exposure and other exposures. • Compliance ratios. • Gearing ratios, Analysis of capital structure, sources of funds and costs of funds. • Cash flow statement. • Relationship between Profit and Loss Account, Cash-flow Statement and Balance Sheet. • Limitations of ratio analysis. • Other methods of analyzing performance e.g. Common size financial statement, trend analysis, etc. • Non-financial indicators of performance.
4.	Capital Investment Appraisal: Appraisal of capital projects using techniques such as payback, accounting rate of return and discounted cash flow.
5.	Cost analysis: - Cost Classifications • Fixed and variable costs. • Marginal and sunk costs. - Cost and internal accounting information for resource allocation decisions. • Cash budgets and other forecast and the impact of taxes on financial statements. • The cash operating cycle. • Break even analysis and limiting factors.
6.	Receivership, Bankruptcy and Liquidation: • Receivership procedures • Ranking of claims in liquidation • Shared and business valuations on the liquidation basis and on the going concern basis • Methods of valuation • Historical cost, replacement cost, dividend yield, P/E ratio, future streams of cash flows • The valuation of majority and minority interest. NB: Only procedural issues will be dealt with.
7.	Current Cost Accounting: Effects of inflation in Accounting/Financial information.
8.	Group Accounts: - Preparation and presentation of group and consolidated accounts including associated companies. - Consolidation adjustments, under the acquisition and merger methods distributable profits, minority interest, goodwill (acquisition methods only) and merger reserve (merger method only). NB: In this topic, reference should also be made to International Standards.
9.	Capital Reduction, Re-organization and Re-construction - circumstances that lead to capital reduction re-organization and re-construction - Implications of Capital re-organization and re-construction.
RECOMMENDED READING 1. TIOB (2003) Accoutancy II, Mzumbe Book Project 2. Alexander & Britton: Financial Reporting 3. J R Edwards & H J Mellett, Accountancy for Banking Students (CIB/Bankers Books) 4. M Henderson & D Kyle, Accountancy Bankers Workbook 5. NBAA: AVI relevant standards/guidelines and records. 6. NBAA: Tanzania Statements of Accounting Guideline 7. NBAA: TSORP 1 8. NBAA: Study Guide for Advanced Accountancy (consolidated accounts monograph) by C G Fumbuka 1993 9. Government Printers: BAFI Act, 1991 10. Government Printers: BOT Act, 1995 11. Government Printers: Companies Ordinance, (Cap 212) 1932 12. IASC: International Accounting Standards. Range of Local and International Accounting and Banking Journals like: - The Accountant - Professional Accountant - The IFM Journal of Financial Management - The Tanzanian Bankers Journal - Business Management Review - CIB News - Comesa Banking.