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LCCI International QualificationsLevel 1 Certificate in Book-KeepingSyllabusEffective for examinations to be held after 1 Jan 2008For furtherinformationcontact us:Tel. 44 (0) 8707 202909Email. [email protected]

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INTRODUCTIONEDI is a leading international awarding body that was formed through the merger of theLondon Chamber of Commerce and Industry Examinations Board (LCCI) and GOAL, aleading online assessment provider. EDI now delivers LCCI International qualifications (LCCIIQ) through a network of over 5000 registered centres in more than 120 countries worldwide.Our range of business-related qualifications is trusted and valued by employers worldwideand recognised by universities and professional bodies.Level 1 Certificate in Book-keepingAimsThe aims of this qualification are enable candidates to develop: an understanding of the basic principles underlying the recording of businesstransactionsthe ability to maintain the books of, and prepare final accounts for, sole tradersTarget Audience and Candidate ProgressionThe examination is suitable for candidates who work or wish to work in areas of businessthat will involve the recording of financial transactions. All businesses require accurateaccounting records that are maintained on a regular basis. Consequently, there is a demandfor employees who possess these skills.Successful candidates can progress to the LCCI IQ Level 2 Certificate in Book-keeping andAccounts qualification.Level of English RequiredCandidates should have a standard of business English equivalent to LCCI IQ Level 1English for BusinessStructure of the QualificationThe Level 1 Certificate in Book-keeping is a single unit qualification that consists of the rangeof topics detailed below.3

Syllabus Topics1.The Accounting Equation and the basis of double-entry book-keeping2.Recording transactions through double entry3.Balancing accounts4.Purchases/Sales/Returns5.The Ledger: its subdivision6.Day Books7.Bank facilities/methods of payment or receipt of money8.Cash Book and cash discount9.Bank reconciliation10.Petty Cash Book and the Imprest System11.Trial Balance12.Adjusting for accruals and prepayments in the final accounts13.Depreciation of fixed assets14.The entries relating to bad debts15.The Journal16.Capital and revenue expenditure17.Errors in the accounts and their correction18.Effect of Profit (or Loss) and drawings upon capital19.Trading and Profit and Loss Accounts20.The Balance Sheet21.Control Accounts – an introductionGuided Learning HoursEDI recommends that 140 - 160 Guided Learning Hours (GLHs) provide a suitable courseduration for an ‘average’ candidate at this level. This figure includes direct contact hours aswell as other time when candidates’ work is being supervised by teachers. Ultimately,however, it is the responsibility of training centres to determine the appropriate courseduration based on their candidates’ ability and level of existing knowledge. EDI experienceindicates that the number of GLHs can vary significantly from one training centre to another.4

ASSESSMENTAssessment ObjectivesThe examination will assess the candidate’s ability to demonstrate: an understanding of the Accounting Equation and the basis of double-entry bookkeeping how to prepare journal entries and ledger accounts by using the double entry system how to prepare prime entry records for purchases, sales, returns and cash how to prepare journal entries how to prepare a trial balance and the final accounts for sole traders an understanding of banking facilities and the operation of the cash book how to prepare a bank reconciliation statement how to make adjustments for accruals and prepayments in the final accounts an understandinfg of the entries necessary for the depreciation of fixed assets how to make entries relating to the writing off of bad debts an understanding of the distinction between capital and revenue expenditure how to correct errors in the accounts of sole traders an understanding of the use of control accounts as a check on the sales and purchasesledgerSkills AssessedCandidates will need to show that they can: add, subtract, divide and multiply, calculate and use percentages prepare journal entries and ledger accounts present final accounts for sole traders5

Coverage of Syllabus Topics in ExaminationsAt least 2 of the following syllabus topics will appear in each examination:9.Bank reconciliation10.Petty Cash Book and the Imprest System16.Revenue and Capital Expenditure19.Trading and Profit and Loss Accounts20.Balance SheetExamination Format The time allowance for the examination is 2.5 hours There will be 4 questions on the examination paper All of the questions will be compulsoryEach question will carry equal marksAnswer formatsThe answers required will be predominantly of a quantitative nature but candidates will beexpected to demonstrate their understanding of the subject at an appropriate level.Mark AllocationA positive marking approach is used. Although candidates will be penalised for initialcalculation errors, they will gain marks for consequential ‘own figures’ as long as the correctuse of principles has been demonstrated.CertificationSuccessful candidates willbe awarded the Level 1 Certificate in Book-keeping basedon the achievement of the percentages and grades below.PassMeritDistinction50%60%75%6

Recommended Reading List and Support MaterialReading ListTitlePassport to SuccessLevel 1 Certificate in Book-KeepingHow to Pass Book-KeepingFirst LevelAuthor(s)EDIKeith F BirdPublisherISBN CodeHodder9781862471115LCCIEB0712108653These books are essential reading for all candidatesSupport MaterialModel answers and past question papers are available from the LCCI website,www.lcci.org.uk.How to offer this qualification.To offer this qualification you must be an LCCI IQ registered examination centre. To gainCentre approval please contact Customer Support on 08700 818008 between the hoursof 0830 and 1700 (GMT)Monday to Friday or by email on [email protected] you may contact your regional LCCI Office or Co-ordinating authority.7

Syllabus TopicItems Covered1Candidates must be able to:23The Accounting Equationand the basis of double-entrybook-keepingRecording transactions throughdouble entryBalancing accounts1.1Explain and use the terms debtor,creditor, asset, liability, capital1.2Apply the Accounting Equation:Assets Capital Liabilities and itsexpression in the Balance Sheet1.3Calculate the effect of basic businesstransactions upon the accountingequationCandidates must be able to:2.1Complete debit and credit entriesrecording individual transactions2.2Prepare T-type accounts2.3Prepare a transaction/entry within anaccount, ie date together with, normally,the name of the ‘other’ account involvedin that particular transaction/entryCandidates must be able to:3.1Balance the T-type ledger accountincluding bringing the balance down forthe start of the next accounting period3.2Explain the significance of any particularaccount balance, eg a credit balance ona creditor account, a debit balance onan expense account3.3Prepare accounts in running balanceform3.4Transfer a balance at period end toTrading Account or Profit and LossAccount, as appropriate (see 19.1)3.5Show the procedure for other end-ofperiod balancing, and ruling off, ofaccounts8

4Purchases/Sales/ReturnsCandidates must be able to:4.1Record the effects on double-entryaccounts of purchases ofgoods/services:4.1.1 for cash4.1.2 on credit4.2Show the effects on double-entryaccounts of the sale of goods/services:4.2.1 for cash4.2.2 on credit5The Ledger: its sub-division4.3Record the return of goods previouslybought or sold (or alternatively of anallowance being made in lieu of actualreturn of goods)4.4Show the use of the term Returns, bothinwards and outwards; recognise thealternative terms in use, sales returnsand purchases returns4.5Explain the part played in book-keepingby the invoice and the credit note4.6Explain trade discount4.7Calculate trade discount, from list pricesto obtain net price4.8Explain the differences between tradediscount and cash discount and thedifferent book-keeping effectsCandidates must be able to:5.1Explain the functions of the Ledger5.2Show how the Ledger might be subdivided, eg Sales Ledger, PurchasesLedger, Cash Book, General Ledger5.3State the alternative names for thedifferent Ledgers, eg Debtors Ledger,Creditors Ledger, Nominal Ledger5.4Identify from a list of accounts, or fromtransaction details, the naming of theLedger(s) in which each would berecorded9

67Day BooksBank facilities/methods ofpayment or receipt of money5.6Distinguish between personal, real andnominal accounts5.6Show how the Sales Ledger might besub-dividedCandidates must be able to:6.1Prepare Purchases, Sales, ReturnsOutwards and Returns Inwards DayBooks6.2Show the alternative names used forthese various Day Books, i.e. purchasesreturns and sales returns6.3Record individual transactions in theDay Books6.4Make individual postings from the DayBooks to personal accounts6.5Make postings of period Day Book totalsto the Purchases, Sales and ReturnsAccounts in the General LedgerCandidates must be able to:7.1Differentiate between and explain themain types of bank account and theirkey features7.2Distinguish between the key aspects ofthe following methods of payment andreceipt of money:7.2.17.2.27.2.37.2.47.2.5cashchequecredit transferstanding orderdirect debit7.3Define a bank overdraft and explain howan overdraft might arise7.4Record and state the differencesbetween:7.4.17.4.210interest receivable (by thecustomer) on a bank accountinterest payable on a bank loanor overdraft

7.4.37.5bank charges as charged by abank for operating an accountState the name of and explain the use ofthe following abbreviations:7.5.17.5.27.5.37.5.4DD or D/D - direct debitCT or C/T - credit transferSTO or S/O - standing orderDiv - dividend7.6 Explain the significance of the followingterms:7.6.17.6.27.6.37.6.47.6.57.6.68Cash Book and cash discountbank paying-in bookbanker’s ordercheque book counterfoils/stubsdrawerdraweeremittanceCandidates must be able to:8.1 Explain the dual role of the Cash Bookas a book of prime entry and an integralpart of the double-entry record8.2 Prepare a three-column Cash Book (thebank columns recording the BankCurrent Account only)8.3 Record individual transactions from theCash Book to the Ledger8.4 Record the differences in book-keepingentries regarding the withdrawal of fundsfrom the bank, as between:8.4.18.4.2that for use in the business - acontra entrythat for private use - drawings(see 18.2)8.5Record the variations of entry arising onand from the sale of goods for cash, egthe immediate banking of cash asagainst the delayed banking of cash8.6Record the book-keeping entriesrequired on the transfer of fundsbetween the Bank Current Account andthe Bank Deposit Account11

8.7Explain how Cash discount can be partof the terms of sale8.8Calculate cash discount8.9Record the double-entry effect ofdiscount allowed and discount receivedrespectively8.10 Record entries in the discount columnsin the Cash Book8.11 Prepare the periodic updating of theCash Book from the bank statement(see 9.2)8.12 Explain the possible reasons for thedishonouring of a cheque and itssignificance8.13 Record the book-keeping entries arisingon the dishonouring of a cheque8.14 Balance the Cash Book, bringing thebalance down for the start of the newperiod8.16 Record the periodic posting of discountcolumn totals from the Cash Book to theDiscount Allowed and DiscountReceived Accounts in the GeneralLedger9Bank reconciliationCandidates must be able to:9.1Explain the need for periodicreconciliation between the balance inthe Bank Statement and the balance inthe Cash Book (Bank Current Account)9.2Record the updating of the Cash Book(bank column) with as yet non-recordeditems which are revealed in the BankStatement9.3Explain the terms:9.3.19.3.212unpresented cheques (orcheques drawn, not yetpresented)cheques paid in (lodged), notyet credited

9.41011Petty Cash Book and theImprest SystemTrial BalancePrepare a statement reconciling thebalance in the Cash Book (Bank CurrentAccount) with that shown in the BankStatement, in respect of items stillcausing a differenceCandidates must be able to:10.1Explain the use of Petty Cash as asystem for effecting minordisbursements10.2Use sequentially numbered vouchersand be aware that they are anauthorisation for payment10.3Explain the practice of setting a limit tothe amount allowed in reimbursementper claim/voucher10.4Apply the basis of the Imprest System:i.e. the periodic reimbursement of the(controlled) float10.5Record the incidental receipts ofmoney into petty cash, other than theperiodic reimbursement of the float10.6Balance the Petty Cash Book andprepare the book-keeping entriesrelating to the reimbursement of thefloat as well as in respect of anyadjustment of the float10.7Analyse petty cash outlay, the totallingof the analysis columns, and postthese totals as required to appropriateLedger accounts10.8Explain the dual role of the Petty CashBook as a book of prime entry and anintegral part of the double-entry recordCandidates must be able to:11.1Explain the purpose of the TrialBalance11.2Prepare a Trial Balance from a list ofaccount balances11.3Prepare a revised Trial Balance fromone initially drafted incorrectly13

12Adjusting for accruals andprepayments11.4Prepare a final Trial Balance aftertaking account of adjustments11.5Identify and explain the limitations ofthe Trial Balance as a means ofchecking the accuracy of the doubleentryCandidates must be able to:12.1Explain the meaning of an expenseaccrual12.2Explain the meaning of an expenseprepayment12.3Make adjustments for end-of-periodexpense accruals and expenseprepayments in the Profit and LossAccount and Balance Sheet12.4Explain the meaning of an incomeaccrual12.5Explain the meaning of an incomeprepaymentExclusion:Candidates will not be required to prepare endof period adjustments in expense or incomeaccounts for accruals or prepayments13Depreciation of fixed assetsCandidates must be able to:13.1Explain the nature of depreciation offixed assets and the need for makingprovision in the accounts (with theawareness that this is not the puttingby of cash for replacement)13.2Explain the basis of the straight line (orfixed instalment) method ofdepreciation13.3Calculate the amount of annualdepreciation and its effect on the bookvalue of a fixed asset, using thestraight line method13.4Explain the basis of the reducingbalance (or diminishing balance)method of depreciation14

14Bad debts13.5Calculate the amount of annualdepreciation and its effect on the bookvalue of a fixed asset, using thereducing balance method13.6Record the accounting entries for thestraight line and reducing balancemethods of depreciation, keeping thefixed assets account at cost and usinga Provision for Depreciation Account toaccumulate the yearly depreciation13.7Compare, through basic calculation,use of the straight line method and useof the reducing balance method13.8Record the entries in the Profit andLoss Account and Balance Sheetrelating to fixed assets and theirdepreciation13.9Use the terms aggregate depreciationand net book value in the BalanceSheetCandidates must be able to:14.1Record the accounting entries forwriting off individual debtor balances,in whole or in part, using a Bad DebtsAccount14.2Record the end-of-period transfer oftotal debts written off from Bad DebtsAccount to the Profit and Loss Account14.3Record the accounting entries relatingto the recovery of debts previouslywritten off:14.3.1if recovered within the samefinancial period in which thedebt was written off; and/or14.3.2if recovered after the year ofwriting offExclusion:Candidates will not be required to prepare aprovision for doubtful debts account15

15The JournalCandidates must be able to:15.1Explain that the Journal is one of theBooks of Original Entry15.2Explain the advantages of having aJournal, as a support to the doubleentry system, and its main uses15.3Record journal entries, in standardformat, covering:15.3.115.3.215.3.315.3.4the purchase and sale oncredit of fixed assetsthe correction of errorsopening entriesother non-regular transactionsor adjustmentsNote:Each Journal entry should include the relevantdate. It should also include a suitablenarration, unless the question states that it isnot required1617Capital and revenueexpenditureErrors in the accountsCandidates must be able to:16.1Define, in brief, capital expenditure andrevenue expenditure16.2Classify a list of items into capitalexpenditure and revenue expenditurerespectively16.3Show the different ways in whichcapital expenditure and revenueexpenditure items are dealt with in theaccounts16.4Calculate the effect on final accountsof the incorrect treatment of capitalexpenditure and/or revenueexpenditureCandidates must be able to:17.1Explain the difference between errorswhich affect agreement of the TrialBalance and those errors which do notaffect such agreement17.2Identify those errors that do not affectagreement of the Trial Balance; andtypes of such errors16

17.3Select the relevant type of error fromdata provided17.4Record adjusting Journal entries17.5Show the effect of errors and/or theeffect of the correction of errors both inprinciple as well as by calculation on:17.5.117.5.217.5.317.5.4the Trial Balance (see 11.3)Gross ProfitNet Profitthe Balance SheetExclusion:The preparation of a Suspense Account is notrequired at this level1819Effect of Profit (or Loss) anddrawings upon capitalTrading and Profit and LossAccountsCandidates must be able to:18.1Explain and show that Profit (or Loss)is the difference between opening andclosing capital balances (allowing forany drawings or the introduction ofadditional capital)18.2Explain the meaning of the termdrawings; the various forms ofdrawings18.3Record the book-keeping entries fordrawings18.4Calculate the possible effect ofdrawings upon the amount of capital18.5Record how drawings are stated in theBalance Sheet and, where necessary,in the Trading Account (where goodsare withdrawn for private benefit)Candidates must be able to:19.1Explain that the Trading and Profit andLoss Accounts are part of the doubleentry system19.2Record the basic structure of income,costs and profit in a business17

19.3Record returns inwards and returnsoutwards suitably deducted to revealnet sales and net purchasesrespectively19.4Explain and apply the valuationconcept of stock: the lower of cost ornet realisable value19.5Calculate cost of goods sold19.6Show the make-up of ‘cost of goodssold’Note:Wages should be included in the TradingAccount only if a particular question requiresthis to be done19.7Differentiate between trading incomeand other income19.8Record in the Stock Account thedouble-entry relationship between theTrading Account and the StockAccount19.9Record end-of-period transfer ofbalances from the General Ledger tothe Trading Account (PurchaseAccount, Sales Account, ReturnsOutwards Account and ReturnsInwards Account)19.10 Explain the difference betweencarriage inwards and carriageoutwards and record them in theTrading Account and Profit and LossAccount respectively19.11 Record the double-entries for expenseamounts between the Profit and LossAccount and the individual expenseaccounts19.12 Show income and expenses within thefinal accounts, with related items beingsuitably brought together19.13 Prepare a Trading and/or Profit andLoss Account and calculate grossprofit/net profit. (The presentation inthe vertical format is preferred but thehorizontal format will also beaccepted).18

20The Balance SheetCandidates must be able to:20.1Explain the function of the BalanceSheet and, in particular, therecognition that it stands outside thedouble-entry system20.2Define the significance and use of theterms fixed assets and current assets20.3Understand the difference betweenlong-

Apr 01, 2012 · www.lcci.org.uk LCCI International Qualifications Syllabus Effective for examinations to be held after 1 Jan 2008 . 2. 3 INTRODUCTION EDI is a leading international awarding body that was formed through the merger of the London Chamber of Co