Trading businesses have a major asset which most service businesses do not. That asset, known as ‘stock’, ‘merchandise’ or ‘inventory’, is unique in character – it is obtained by the businesses for one purpose only – that is – selling to customers. Unlike other assets which are obtained and retained by a business, a trading business must rely for its survival on the constant sale of this asset. Because of this, trading businesses need to be able to account for this asset and the individual lines of merchandise which make it up.
This course shows you how to do bookkeeping for a Trading Business.
"I was very satisfied with the service I received from ACS when I did my Bookkeeping Course. I emailed my assignments using my login at the ACS site and received them back, marked within a week. The comments of the tutor were comprehensive and helpful. The administrative staff also were very quick to reply to any of my emailed questions "- Barbara Kale
COURSE STRUCTURE
Trading firms and accounting rules
Physical Inventory System
Perpetual Inventory System
Inventory Valuation
Accounting for bad and doubtful debts
Classified Profit and Loss Statements for trading firms
Control Accounts
Budgeting for Trading Firms
Statement of Cash Flows
Alternatives in Accounting
Analysis and Interpretation of Accounting Reports
Business Expansions and Sources of Finance
AIMS
Describe the nature of trading businesses, and the differences between recording and reporting for trading businesses and service businesses.
Describe the nature of stock and the physical system of recording inventory.
Explain the perpetual or continuous system of recording for inventory, the use of stock cards and methods of stock valuation.
Distinguish between the main methods for valuing merchandise on hand and the procedures that need to be set up in order to maintain the different systems.
Distinguish between bad debts and doubtful debts
Explain how to prepare the journal entries and understand the effect of bad debts on final accounting reports.
Extend your knowledge of the classification in accounting reports and how it is applied to trading firms.
Acquire an understanding of control accounts and their uses.
Explain of the use of budgets and to apply the skills learned.
Explain the use and role played by statements of cash flows.
Explain the different accounting alternatives available to business and the advantages and disadvantages of the various alternatives.
Describe the tools used to measure the key areas of performance and financial position of a business and how they can aid in decision making.
Describe the different sources of finance available to businesses, other methods of expanding a business and the impact of different equity structures on the accounting and decision making processes.
WHAT THE COURSE COVERS
Describe the flow of financial information through a trading firm by preparing a flow chart.
What are the four general objectives of accounting?
Explain how a physical item may be classified as inventory for one business but as a non-current asset for another.
Outline the two ways the value determined by a physical stocktake affects the final accounting report.
What are the two processes involved in completing a physical stocktake?
Write a brief description of what is involved in the perpetual inventory system.
State and describe four advantages and four disadvantages of the perpetual inventory system.
List the three special journals which need to be modified if a business changes from the physical method to the perpetual method or recording inventory.
Explain the role of barcodes in recording inventory transactions.
List four items of financial information that can be generated on a daily basis if a computerised barcoding system is used.
Explain the relationship between the doctrine of conservatism and the lower of cost and NRV rule
Distinguish between the terms doubtful debts and bad debts .
Explain how the allowance for doubtful debts can incorporate both bad and doubtful debts for a period.
Describe two different ways of estimating the value of an allowance for doubtful debts.
List the benefits of classification to management.
Describe the benefits of departmental reporting.
State and describe the advantages and disadvantages of control accounts.
Explain the importance of cash budgeting when accounting for a trading firm.
Explain the purpose of a budget performance report.
Prepare estimates of the future cash inflows for a business
Prepare a table showing the breakdown between credit and cash sales for a six month period.
Explain the role of the doctrine of disclosure when management decides to change depreciation methods.
Explain why some accountants criticise the historical cost accounting system
Distinguish between analysis and interpretation
How is it possible for a business to show an increase in their gross profit ratio but a decrease in their net profit ratio
What does an asset turnover ratio tell a business owner?
List five aspects of the profit report which are likely to be considered by the lender.
What are the benefits of preparing a well researched finance application?
Duration: 100 hours
What qualification will I achieve for completing this course?
This is an individual module course. The individual module courses are 100 hour long usually and can be taken on their own or as part of a larger program of study.
If you wish to take an individual module course as a stand alone course, you can elect to sit an optional exam at the end of it.
If you successfully pass the exam and all assignments, you will receive a Statement of Attainment. You can take examinations at a time and location to suit you. If you enrol, you will be sent further information on how to arrange examinations at the end of the course.
If you do not wish to take the exam, you will receive a Course Completion letter when you have passed all assignments.
There is an assignment at the end of each lesson. So for example, if an individual module course contains ten lessons, you will need to complete ten assignments. Assignments can be sent to us via email, post or fax.
Other qualifications, such as certificates, diplomas etc may require examinations to be taken as part of the overall assessment process.
You can find further information on the examinations process by clicking on the “Enrolment” link above.
You can find further information on other courses by clicking on the “Courses” link above.
More Information on ACS Distance Education and our courses
Who are our tutors?
Our tutors are all highly experienced and professional, knowledgeable in their field of study. We have staff from around the world, enabling us to gain a wide variety of perspectives. We have a school in the UK and in Australia. If you would like to have a look at our tutors, then click on the “The School” in the boxes above and choose “The Staff” option.
Sample Course Notes
Our courses are all written by highly qualified tutors and writers, who also teach on the courses, so know them well. We strive to update our courses and improve them with new information, methods and knowledge on an ongoing basis. If you would like to see examples of some of our courses, then choose the “Enrolment” option above, and then click on “Sample Course Notes”.
What learning method should I choose?
We offer three learning methods – e-learning, correspondence and online. If you are not sure which is the right choose for you, then click on the “Enrolment” box above, then “Learning Methods.”
How Long will it take to complete the course?
This obviously varies from student to student. Some students will have more time for study than others. Some students may work quicker than others, so it is an individual thing. We estimate that most students will take, for example, 4 – 6 months to complete a 100 hour individual module, but we allow up to 12 months for you to complete it.
Longer courses will obviously take longer. You can find more information on the length of time required and so on the “Enrolment” box, then selecting “Terms and Conditions of Enrolment.”
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If you would like to read comments from our previous students, then choose the “Enrolment” option above, then “Student Testimonials”.
I don’t think this is the right course for me.
If you’re not sure about this course, then why not look at our wide range of other courses. Click on the “Courses” box above.
You may also wish to design your own course to fit in with exactly what YOU want. To do so, click on the “Enrolment” box, then “Design your Own Course”.
If you would like more advice on a course, then you can contact us and ask a tutor about the courses. You can contact us by calling 0800 328 4723 or +44(0) 384 442752 or emailing info@acsedu.co.uk
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For more information on our recognition and accreditation, click on “The School”, then “Recognition”.
Who is ACS Distance Education?
If you want to know more about ACS and our history, then please click on “The School”, then “About us.”
