Syllabus - X2.sdimgs

LCCI International QualificationsLevel 3 Certificate in Accounting (IAS)SyllabusEffective for examinations to be held after January 2008For furtherinformationcontact us:Tel. 44 (0) 8707 202909Email. enquiries@ediplc.comwww.lcci.org.uk

INTRODUCTIONEducation Development International (EDI) is a leading international awarding body that wasformed through the merger of the London Chamber of Commerce and Industry ExaminationsBoard (LCCI) and a leading online assessment provider GOAL. EDI now delivers LCCIInternational Qualifications (LCCI IQ) through a network of over 5000 registered centres inmore than 120 countries worldwide. Our range of business-related qualifications are trustedand valued by employers worldwide and recognised by universities and professional bodies.Level 3 Certificate in Accounting (IAS)AimsThe aims of this qualification are to enable candidates to develop: an understanding of the basic principles underlying the recording of businesstransactions the ability to prepare and interpret accounts for sole traders, partnerships, non-tradingorganisations, companies and groups of companies in accordance with basicaccounting conventions and current accounting practice the ability to apply the principles of decision makingTarget Audience and Candidate ProgressionThis qualification is suitable for candidates who work or wish to work in an advanced area ofaccountancy.All businesses require suitably skilled people who are able to prepare and maintain accurateaccountancy records. In addition they must be able to produce regular accountancystatements and explain their meaning to management. There continues to be a demand forpeople who possess these skills.Candidates who attempt this qualification must have the knowledge and skills equivalent tothe LCCI IQ Level 1 Certificate in Book-keeping and Level 2 Certificate in Book-keeping andAccounts qualifications.Successful candidates at Level 3 Certificate in Accounting (IAS) can progress to studyLCCI IQ Level 4 Financial Accounting (IAS).Level of English RequiredCandidates should have a standard of English equivalent to LCCI IQ Level 2 English forBusiness.2

Structure of the qualificationThe Level 3 Certificate in Accounting is a single unit qualification that consists of the rangeof topics detailed below:Syllabus Topics1.Levels 1 and 2 revisited2.Valuation of inventories3.Valuation of fixed assets4.Partnerships5.Companies6.Accounting for groups of companies7.Cash flow statements8.Accounting ratios9.Budgetary control10.Introduction to decision making11.Concepts and accounting frameworkNote: Taxation, in all its forms, is excluded from this syllabusGuided 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.ASSESSMENTAssessment ObjectivesThe examination will assess the candidate’s ability to: demonstrate and understanding of the more advanced aspects of Level 1 Certificate inBook-keeping and Level 2 Certificate in Book-keeping and Accounts. It should benoted, however, that these syllabi use UK accounting terminology rather thanInternational accounting terminology.3

prepare accounts for a partnership in relation to alterations in partners’ interests andthe conversion of a partnership into a company prepare accounting entries for a company to record the issue of share capital and theissue and redemption of debentures account for distributable profits and profits prior to incorporation for companies prepare cash flow statements in accordance with IAS 7 prepare a cash budget prepare a budgeted income statement and/or balance sheet calculate and interpret accounting ratios demonstrate an understanding of the principles of decision making interpret accounting statements demonstrate an understanding of accounting standards and conceptsSkills AssessedCandidates will need to show that they can: add, subtract, divide and multiply, calculate and use percentages prepare journal entries and ledger accounts present the final accounts of sole traders, partnerships, companies, including groupsand non-trading organisations in appropriate format analyse and interpret data apply basic decision making techniques prepare financial data in compliance with International Accounting Standards (IAS) andInternational Financial Reporting Standards (IFRS)Coverage of Syllabus Topics in ExaminationsAt least two of the following syllabus topics will appear in each examination:4.Partnerships5.Companies6.Accounting for groups of companies7.Cash flow statements4

8.Accounting ratios9.Introduction to decision makingExamination Format The time allowance for the examination is 3 hours. The examination paper will comprise 5 questions. Candidates are required to answer 4 questions. No question will be compulsory Any question can relate to more than one topic area from the syllabusAnswer FormatsThe answers required will be predominantly of a quantitative nature, but some questionswill also require candidates to provide short written answers.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 will be awarded the Level 3 Certificate in Accounting, based on theachievement of the percentages and grades below :PassMeritDistinction50%60%75%Recommended Reading List and Support MaterialReading ListTitleAuthor(s)PublisherISBN CodePassport to SuccessLevel 3 AccountingEDIHodderEducation978-1-86247-113-9How to Pass Accounting(Second edition)Joe Adomako andBala BalachandranLCCIEB1 86247 033 Z5

Support MaterialModel Answers and past papers are available from the LCCI website, www.lcci.org.uk.A Solutions Booklet to support the passport to Success book is also available from thewebsite.How to offer this qualificationTo offer this qualification you must be an LCCI IQ registered examination centre. To gaincentre approval please contact Customer Support on 08700818008 between the hours of 830 and 1700 (GMT) Monday to Friday or by emailon centresupport@ediplc.comAlternatively you may contact your Regional LCCI Office or Co-ordinating Authority.6

Syllabus Topic1Levels 1 and 2 revisitedItems CoveredCandidates must be able to:1.1Undertake more advanced examplesof any syllabus topic contained in thesyllabi at Levels 1 and 2 and notcovered elsewhere in this syllabus.Special reference will be made to thefollowing: 2Valuation of inventories2.22.3Accounting for depreciation andbad and doubtful debtsPreparation of final accounts fora sole traderPreparation of final accountsfrom incomplete recordsPreparation of final accounts fora non-trading organisationPreparation of ManufacturingAccountsSales and Purchase LedgerControl Accounts andreconciliation with the total of thelist of balances in the subsidiarysales and purchase ledgersCorrection of errors and use ofsuspense accountCandidates must be able to:2.1Undertake more advanced examplesof the Level 2 syllabus for this topicarea2.2.1Explain the objectives of inventoryaccounts2.2.2Prepare inventory accounts2.2.3Differentiate between perpetual andperiodic inventory valuation2.3.1Explain and/or apply the followingcost bases: FIFO; average cost;replacement cost; standard cost.Inventory accountsInventory valuationfor final accountsExclusion:The study of long-term contracts is not arequirement of this syllabus7

2.4Ascertaining inventory in theabsence of physical inventorytaking2.4.134Valuation of fixed assetsPartnerships4.2Adjust inventory valuation forinventory movement before or afterend of accounting periodCandidates must be able to:3.1Undertake more advanced examplesof the Levels 1 and 2 syllabi for thistopic area3.2Explain and apply the followingadditional methods of depreciation:Units of output; machine hour; sum ofyears’ digits; annual revaluation3.3Calculate the effect of a change inthe basis of depreciation of a fixedasset3.4Calculate the change in the chargefor depreciation when there is achange in the life and/or residualvalue of a fixed assetCandidates must be able to:4.1Undertake more advanced examplesof the Level 2 syllabus for this topicarea4.2.1Prepare entries for the division ofprofits/losses in accordance with apartnership agreement4.2.2Prepare entries for the division of anincome statement into periods beforeand after the date of change in apartnership agreement, if within anaccounting period, using time,turnover and other bases4.2.3Prepare entries to partners' capitalaccounts for funds introduced/WithdrawnChanges in partnershipinterests during a financialyear8

4.34.2.4Prepare entries for the adjustment ofpartners' capital and/or currentaccounts for share of unrecordedassets/liabilities when profit/lossratios are changed4.2.5Prepare entries for the inclusion orexclusion from the books of anyassets/liabilities in accordance withpartners' decisions4.3.1Prepare the entries to partners'capital accounts for funds introduced/withdrawn4.3.2Make adjustment to partners' capitaland/or current accounts for share ofunrecorded assets/liabilities4.3.3Divide an income statement intoperiods before and after date ofadmission or retirement of partners, ifwithin an accounting period usingtime, turnover and other bases ofapportionment4.4.1Prepare a sale of business account inpartnership books4.4.2Prepare a dissolution (realisation)account in partnership books4.4.3Show the distribution of proceedsbetween partners4.4.4Close the partners' capital accountsin partnership books4.4.5Prepare a purchase of businessaccount in company books4.4.6Record the issue of shares anddebentures etc in company books4.4.6Record goodwill in company books4.4.7Divide profits before and afterincorporationAdmission or retirementof partners during a financialyear4.4 Conversion into a company9

5Companies5.25.35.4Candidates must be able to:5.1Undertake more advanced examplesof the Level 2 syllabus for this topicarea5.2.1Prepare the application and allotmentaccount5.2.2Prepare the share capital anddebenture accounts5.2.3Prepare the share and/or debenturepremium accounts5.2.4Record the calls on shares anddebentures5.2.5Record the redemption of debentures5.3.1Record the purchase, by a company,of its own ordinary shares out of theproceeds of a new issue made forthat purpose5.3.2Record the purchase, by a company,of its own ordinary shares out ofdistributable reserves5.3.3Record the purchase, by a company,of its own ordinary shares from a mixof a new issue and distributablereserves5.3.4Record the redemption of preferredsharesIssue of shares and issueand redemption ofdebenturesPurchase of own ordinaryshares and redemption ofpreferred sharesRights and bonus (capitalisation)issues of shares5.4.15.4.210Explain what is meant by a rightsissue of shares and prepare thenecessary accountsExplain what is meant by a bonusissue of shares and prepare thenecessary accounts, makingappropriate use of available reserves