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LCCI Accounting First Level _

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LCCI Accounting First Level

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LCCI
First Level Revision Notes

LCCI Accounting First Level

(10)
2569

1. 270
Double
Entry, Ledger, P/L Account and B/S
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2.

Ch 1
Ch 2
Ch 3
Ch 4

The Accounting Equation

Transaction through Double Entry
Purchases and Sales
Expenses : Profit or Loss

Ch
Ch 5
6
Ch 7
Ch 8

Balancing
Accounts
: the
Trial
Balance
Trading and
Profit and
Loss
Accounts
The Balance Sheet
Final accounts : more features

Cash Book and Day Book

Ch
Ch 910
Ch 11
Ch 12
Ch 13
Ch 14
Ch 19

3.

Adjustments Before Final Accounts

Ch 15
Ch 16
Ch 17
Ch 18

Ch 20
21
Ch 22
Ch 23
4.

The
of the Ledger
BankDivision
Facilities
Cash Book : two columns
Cash Book : three columns cash discount
Day Books : Sales Day Book
Returns Day Books
Petty Cash Book : Imprest System

Accruals and Prepayments

Depreciation of Fixed Assets

Bad Debts and Provision for Doubtful Debts
Bank Reconciliation Statements

1 /20

Capital
and Revenue Expenditure
The Journal
Errors in the Accounts
Final Accounts and Adjustments further considered

Miscellaneous
Ch 24 Club and Society Accounts

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LCCI First Level Revision Notes

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LCCI First Level Revision Notes

Ch. 1 The Accounting Equation
A = L + OE
Balance Sheet => at a moment in time
Format of B/S

B/S at 20X3
Purchase
Cash

200
700

Capital
Loan
Creditor

500
200
200

900

900

Ch. 2 Transaction Through Double Entry

Dr
A(+)
L(-)
OE(-)

Cr
A(-)
L(+)
OE(+)

Bank
May 1 Capital 5000

Ledger should include date, description and amount

Ch. 3 Purchases and Sales
Purchase : goods bought with the intention of selling them
Purchase on credit A(+)
Purchase
John 100
Purchase on cash
Purchase
Cash 100
Sales for cash A(-)

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John (Creditor)
Purchase 100
Cash
Purchase 100
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Sales for cash A(-)

Sales

Cash
Cash 420

Sales 420

Tom 420

Tom (Debtor)
Sales 420

Sales on credit
Sales

Purchase return (return outward)

- Good returns to supplier
Returns outward
John 420

John (Creditor)
Return outward 420

LCCI First Level Revision Notes

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Sales return (return inward)

Returns inward
Tom 100

Tom (Debtor)
Return inward 420

Ch. 4 Expenses : profit or loss

Expense
Cash

Wage
Wage 100

Cash 100

Drawings
-- drawing
not reduce
directly in
capital
account
is different
from
expense
Cash
Drawing 100

Drawing
Cash 100

Beg. Capital + Profit / Loss = End Capital

Ch. 5 Balancing accounts : the Trial Balance
Balance off the account
Sales

Bal b/d

L. Smith
300 Bank
Bal. C/d
300
200

Nil balance => 2 sides equal, not enter in TB

Dr = Total Cr

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Trial balance => Total

100
200
300

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Nil balance => 2 sides equal,
not enterFirst
in TB
Trial balance => Total Dr = Total Cr

Dr Balance

Cr Balance

Trial Balance of ABC at 31 May 20X3

Cash
Asset
Debtor
Purchase
Return inward
Expense
Drawing

Capital
Loan
Creditor
Sales
Return outward

Cash
Capital

Dr
1670

Cr
1670

Ch. 6 Trading and profit and loss accounts

Net Profit = Sales COGS Expense
Gross Profit
COGS = Opening Stock + Purchase Closing Stock
Trading and P/L account => part of double entry system, B/S is not

LCCI First Level Revision Notes

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*** Stock shown in T/B is beginning stock, NOT closing stock

Balance off Trading and P/L Account
Given :
Purchase

Sales

Sundries 3420

Sundries 4860

Rent Payable
Sundries 500

Rent Receivable
Sundries 300

Office Expense
Sundries 240

Lighting
Sundries 370

Advertising
Sundries 410
Step 1) Trading Account
W Trent
Trading and P/L Account for the year ended 31 Dec 20X7
Purchase
Gross Profit c/d

3420
2640
6060

Sales
Stock
Gross Profit b/d

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4860
1200
6060
2640
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Purchase
Sundries 3420
P/L 3420

Sales
P/L 4860
Sundries 4860

Stock
P/L 1200
Step 2) P/L Account
P/L Account
500
Gross Profit b/d

Rent
Office Expense
Lighting
Advertising
Net Profit

240
370
410
1420
2940

Rent Receivable

2640
300

2940

Step 3) Capital Account

DrawingCapital 600
Sundries 600

Drawing 600 Capital

Bal b/d
Bal c/d 3820
Net Profit
4420
Bal b/d

3000
1420
4420
3820

Ch. 7 The balance sheet

A, L, OE are closed off (not part of double entry system) => simply listed in B/S

LCCI First Level Revision Notes

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Fixed Asset
- relatively long life in business e.g. 2 3 yr, primary purpose is not to resell
- e.g. land, building, fixture, office equipment, machine, motor
Current
- tradingAsset
activity
- e.g. stock, debtor, cash, bank
Presentation sequence
Fixed Asset
Current Asset
Land and buildings
Stock
Fixture
and fitting
Machinery
Motor vehicle
Long Term Liability
- Payable > 1 yr

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Debtor
Bank
Cash

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- Payable > 1 yr

LCCI Accounting First Level _

Current
Liabilitybank overdraft, short term bank loan
- e.g. Creditor,
Ch. 8 Final accounts : more features (*** IMPORTANT ***)
Carriage => expense incurred in the delivery of good
Carriage
- purchaseinward
delivery
- normally supplier make no separate charge, but has => paid more
Net Purchase = Purchase + Carriage Inward Purchase Return
Carriage outward
-- deliver
charge to
as customer
expense in P/L account
Net Sales = Sales Return Inward
Stock
COGS = Opening
Stock
+ Purchase
+ Carriage
Purchase
Return
Closing
Stock Inward
*** Stock appeared in TB => opening stock
Year End Procedure
- Sales, purchase, expense, drawing => close
- Capital, stock, cash, debtor, creditor, asset => b/d

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2015

2015

2015

157

2015

89

2014 Baidu | |

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