ACCA F3 covers financial accounting. Its main focus is the preparation of financial statements that summarize the company’s financial performance over a period of time. These statements are generally prepared quarterly and annually and adhere to the Generally Accepted Accounting Principle. Information derived from financial accounting is used by external parties such as creditors, investors and government authorities.
ACCA F3 Syllabus
Financial reporting includes financial statements for external reporting. The format for these statements is designed to follow the regulatory framework of accounting standards. It is important to learn the purpose and context of financial reporting. Individuals taking ACCA F3 will also learn the qualitative traits of financial information.
Financial reporting in ACCA F3includes the drafting of trial balance and identifying errors, bank reconciliation and suspense accounts. The preparation of statement of financial position, income statements and statements of comprehensive income is also included in the syllabus. The proper disclosure of notes and after events reporting follows the financial statement topics then students will learn how to prepare statement of cash flows.Finally, the preparation of consolidated cash flow is finalized by putting together these individual financial statements.
Double entry is a practice that increases the chance of the books to be balanced by entering a single transaction twice, one on the debit and one on the credit side. Double entry principles include the maintenance of records and accounting information. Double entryrefers to the recording of different transactions and events from sales to purchases.
Interpretation of financial statements
Knowing what the effect of the data acquired in the financial statements to the company is also a part of ACCA F3. Interpretation of these statements will lead to understanding the different financial ratios used in the business. Using these tools, it will be easier for the accountant to interpret and deliver useful information tooutside entities which can help them formulate decisions.
Why is financial accounting important?
The main distinction of ACCA F3 or financial accounting with the other fields of accountancy is that it is generally concerned with the reports that will be scrutinized by people who are not regularly associated with the company but have an interest in the financial reports of the entity. This will be the statements that the company will have to show to potential investors. The financial condition of the business is a major concern for these investors, thus having a good financial statement is important in order to gain capital. The operating results can also be reflected in the balance sheet which shows the sales, expanses as well as the profits and losses. Using the income statement, outside entities will be able to evaluate the company’s past performance and predict future performance. The statement of cash flow will report the profits reported that do not include the non-cash elements. This is important for investors since cash flow from every source will affect their investment. The shareholder’s equity will show the changes the equity component.
ACCA F3 is a two hour exam that comprises fifty 2 questions. An applicant must get at least 50% to pass the examination.