Introduction to Financial Accounting – KASNEB Syllabus



This paper is intended to equip the candidate with knowledge, skills and attitudes that will enable him/her to account for various basic financial transactions and prepare financial statements.


A candidate who passes this paper should be able to:

  • Apply accounting concepts in preparation of financial statements
  • Apply the double entry aspects of accounting
  • Account for assets and liabilities
  • Prepare financial statements of a sole trader, partnership and


Introduction to accounting

  • Nature and purpose of accounting
  • Objectives of accounting
  • Users of accounting information and their information needs
  • Qualities of useful accounting information
  • Accounting concepts/principles
  • Accounting standards and their importance
  • The accounting equation

Double entry bookkeeping and books of original entry including manual and computerised systems

  • Source documents
  • Books of original entry
  • The double entry system and the ledger
  • The trial balance and basic financial statements
  • Computerised accounting systems – Role of computers, application and accounting softwares in the accounting process, benefits and challenges of operating computerised accounting systems

Accounting for assets and liabilities

  • Accrued expenses and prepaid expenses
  • Accounting for revenue including accrued income and prepaid income
  • Accounting for account receivables, bad debts and allowance for doubtful debts
  • Property plant    and    equipment    including    capital    revenue   and    expenditure, depreciation, acquisition and disposal
  • Inventory – recognition, measurement and valuation using specific cost method (FIFO and weighted average cost only)
  • Accounting for cash and cash equivalents, bank reconciliation
  • Accounting for accounts payable including control account

Correction of accounting errors and the suspense account

Financial statements of a sole trader

  • Income statement
  • Statement of financial position

Partnership accounts

  • Contents of a partnership agreement
  • Distinction between current and capital accounts
  • Appropriation statement and partners current and capital accounts
  • Statement of financial position and income statement (excluding changes in partnerships)

Company accounts

  • Types of share capital – ordinary shares and preference shares
  • Types of reserves – share premium, revaluation reserve, general reserves and retained profits
  • Issue of shares (exclude issue by installment and forfeiture)
  • Rights issues and bonus
  • Income tax -Accounting treatment and presentation (exclude computation)
  • Income statement
  • Statement of financial position

Emerging issues and trends

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