An introduction to Advanced Bookkeeping
Advanced Bookkeeping is the first of two Advanced level financial accounting units. It develops Foundation level skills, incorporating Advanced Bookkeeping and managing records for non-current assets, in preparation for producing final accounts for unincorporated organisations. The purpose of this unit is to build on skills and knowledge learned in the Foundation level accounting units and to develop bookkeeping skills, taken to an initial trial balance.
This is valuable progress for the student, both in terms of moving towards preparing final accounts and also in terms of offering employers more technical skills at this stage. The bookkeeping skills that students have acquired at an earlier stage will be reinforced and developed in this unit. While the daybooks and some of the ledger accounts may be familiar, the accruals basis of accounting is introduced to underpin many of the adjustments that are commonly found in the workplace, including accruals, prepayments, accounting for irrecoverable and doubtful debts and the period end valuation of inventory.
This takes the student to the position of being able to draw up a trial balance using adjusted figures, and to extend it to identify the profit or loss for the period.
Students will study non-current asset accounting in some depth, including the accurate recording and control of the valuable resource of non-current assets which is vital to all organisations. On completion of this unit, students will understand and know how to use the non-current assets register as an important and independent record of the details of each individual non-current asset. The student will know how to use the various ledger accounts required to record the acquisition and disposal of non-current assets, how to calculate the gain or loss on disposal, and how to choose and apply depreciation methods and rates.
Students are expected to know and explain why they follow certain procedures, rather than just knowing that they have to be followed. While recognising that computerised accounts packages and spreadsheets will normally be used in the workplace, this unit helps the student understand the background processes. On completion of this unit, students will also begin to understand how ethical principles apply in the context of their work in this area. This enables the student to be a more independent member of a team and to work intelligently in their role, requiring increasingly less supervision as their knowledge grows and starting to supervise more junior members of the team.
Advanced Bookkeeping is a mandatory unit in this qualification. It follows on from the Foundation level units, Bookkeeping Transactions and Bookkeeping Controls. It is closely linked with the Advanced level unit, Final Accounts Preparation, which is recommended to be delivered after this unit. It also incorporates appropriate parts of Ethics for Accountants. Skills and knowledge from this unit are essential for the Professional level unit, Financial Statements of Limited Companies.
Learning outcomes for Advanced Bookkeeping
1. Apply the principles of advanced double-entry bookkeeping
2. Implement procedures for the acquisition and disposal of non-current assets
3. Prepare and record depreciation calculations
4. Record period end adjustments
5. Produce and extend the trial balance