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Level 4: Business Finance

Introduction

Understand the process of company account preparation using accruals and prepayments; explain the influence and importance of accounting standards and other legislation on the production of published financial statements; examine costing systems, absorption costing and overheads, and the potential benefits of activity based costing; understand the use of marginal costing for short term decision making; and recognise the utility of break even charts and profit volume graphs.

Module Description

This module aims to:

  1. Introduce the concepts and techniques relevant to an understanding of both financial and management accounting; and
  2. Develop the ability to apply those concepts and techniques.

Module Content

  • Users of accounting statements
  • Functions of financial and management accounting
  • Preparation of the main financial statements
  • The application of the accruals concept, matching expenditure to income, depreciation, provisions
  • An introduction to management accounting and the role of the management accountant
  • Analysis of how cost behaviour patterns can be used for decision-making purposes
  • Understanding of absorption costing and accounting for overheads, principles of Activity Based Costing
  • Break-even charts, profit volume graphs break-even point, the margin of safety and the contribution/sales ratio

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