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GHANA TELECOM UNIVERSITY COLLEGE

FACULTY OF IT BUSINESS

BIT

Course Title: Basic Accounting and Management

Session and Year: Morning/ Evening L 300

Instructor(s): Maxwell Amo-Hoyte

Course Description: This course exposes students to basic accounting and management and the interrelationship between the two subject areas. It covers the essentials of double entry book keeping as well as preparation of final accounts and related adjustments needed. Students will also be introduced to interpretation of financial statements. The course will also cover the management process and the application of management principles to accounting.

Course objectives:

The course should equip students to

Make adjustments to and prepare final accounts for sole proprietors and companies

Analyze and interpret financial statements

Appreciate the management process and its application to accounting

Course Content

Introduction to Double Entry Bookkeeping

Accounting Equation and Balance Sheet

Double Entry for Assets, Liabilities and Capital

The effect of profit or loss on capital and the double entry system for expenses and revenues

The Trial Balance

Financial Statements

Trading, Profit and Loss Accounts

Balance Sheets

Adjustments

Bad debts

Capital and revenue expenditure

Bad debts & Provisions

Depreciation

Bank reconciliation statements

Accruals and prepayments

Analysis & Interpretation of Financial Statements

Ratio analysis

Management

Planning and Decision Making

Nature and significance of planning

Nature and significance of decision making

Organizing

Process and significance

Forms of organization

Communication

Nature and process of communication

Significance of communication

Effective communication

Leadership

Nature of leadership

Types and styles of leadership

Motivation

Nature and significance of motivation

Theories of motivation

Controlling

Nature and significance of control

The process of control

Application of Management Process in Accounting

Planning: Budgeting

Decision Making: Accounting for short run and long run decision making

1. Marginal and absorption costing

2. Short run decision-making

3. Breakeven analysis

4. Capital investment appraisal

Organizing the accounting system

Communication in the accounting system

Control: Performance monitoring and variance analysis

Required textbooks

Business Accounting 1: F Wood and A. Sangster Accounting Handbook - Notes Questions and Answers: A. A. Twumasi Management Theory & Practice: G.A. Cole Management A Global Perspective: H. Weihrich & H Koontz

Suggested supplementary reading

Book Keeping and Accounts: Spicer and Pegler’s Management Theory and Practice: N.C. Jan & Saakshi

Methodology:

Being a technical subject, knowledge transfer will include lecture type classes where the instructor will elaborate on the topics. Students will be given class assignments and practice areas from the recommended texts. There will be mid-semester assessment tests to determine students grasp of the subject areas taught. There will be a semester-end examination which tests all the topical areas taught. These will help ensure that topics taught are understood and the knowledge retained by the students. Students are expected to participate in all class activities including assignments and examinations, give feedback on understanding of topical areas and read all recommended texts.

Learning outcomes

Students should at the end of the semester achieve the following:

Prepare simple final accounts for businesses

Make adjustments for all entries affecting the final accounts

Analyze and interpret financial statements

Appreciate the management process and its application in accounting

Evaluation

Students will be evaluated as follows:

ACTIVITY

PERCENTAGE

Assignments and Assessments

30

Semester End Examination

70

Total

100

Presented by Maxwell Amo-Hoyte

Presented by Maxwell Amo-Hoyte

OBJECTIVES

OBJECTIVES  What is Accounting  Book keeping and Accounting  Users of Accounting Information 

What is Accounting

Book keeping and Accounting

Users of Accounting Information

Assets, Liabilities, Capital

Definition 1. The process of identifying, measuring, and communicating economic information to permit informed judgments
Definition 1. The process of identifying, measuring, and communicating economic information to permit informed judgments
Definition 1. The process of identifying, measuring, and communicating economic information to permit informed judgments
Definition 1. The process of identifying, measuring, and communicating economic information to permit informed judgments

Definition

1. The process of identifying, measuring, and

communicating economic information to permit informed judgments and decisions by users of the information.

Historical Need for Accounting  Record business transactions  Know whether businesses are financially successful
Historical Need for Accounting  Record business transactions  Know whether businesses are financially successful
Historical Need for Accounting  Record business transactions  Know whether businesses are financially successful
Historical Need for Accounting  Record business transactions  Know whether businesses are financially successful

Historical Need for Accounting

Record business transactions Know whether businesses are financially successful Know what owners own and owed

Objectives  Making profit or loss  Know business worth  Worth of transactions 
Objectives  Making profit or loss  Know business worth  Worth of transactions 
Objectives  Making profit or loss  Know business worth  Worth of transactions 
Objectives  Making profit or loss  Know business worth  Worth of transactions 

Objectives

Making profit or loss

Know business worth

Worth of transactions

Know cash possesed

Know debtors

Know creditors

Monitoring of economic activities

Users of Accounting Information  Managers  Owners  Investors  Banks and creditors 
Users of Accounting Information  Managers  Owners  Investors  Banks and creditors 
Users of Accounting Information  Managers  Owners  Investors  Banks and creditors 
Users of Accounting Information  Managers  Owners  Investors  Banks and creditors 

Users of Accounting Information

Managers

Owners

Investors

Banks and creditors

Tax authorities

Government

Book keeping and Accounting  Book keeping deals with the data entry in books of
Book keeping and Accounting  Book keeping deals with the data entry in books of
Book keeping and Accounting  Book keeping deals with the data entry in books of
Book keeping and Accounting  Book keeping deals with the data entry in books of

Book keeping and Accounting

Book keeping deals with the data entry in books of accounts Accounting deals with the use to which book keeping records are put

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Presented by Maxwell Amo-Hoyte

Presented by Maxwell Amo-Hoyte

OBJECTIVES  Understand Concept of Double Entry  Relationship Between DE and Accounting Equation 
OBJECTIVES  Understand Concept of Double Entry  Relationship Between DE and Accounting Equation 
OBJECTIVES  Understand Concept of Double Entry  Relationship Between DE and Accounting Equation 
OBJECTIVES  Understand Concept of Double Entry  Relationship Between DE and Accounting Equation 

OBJECTIVES

Understand Concept of Double Entry

Relationship Between DE and Accounting Equation

Why Records in T-Accounts

Meaning of Debit and Credit

Golden Rule

Demonstrate in tabular increases and decreases in assets, liabilities and capital

Make entries in T-Accounts

Double Entry 1. Relates to the 2 effects of a transaction  The Receiving entity
Double Entry 1. Relates to the 2 effects of a transaction  The Receiving entity
Double Entry 1. Relates to the 2 effects of a transaction  The Receiving entity
Double Entry 1. Relates to the 2 effects of a transaction  The Receiving entity

Double Entry

1. Relates to the 2 effects of a transaction

The Receiving entity and the giving entity

Also relates to the accounts being increased or decreased

This is the means of recording transactions in an accounting system

Nature of an account Title of Account Debit side Credit Side
Nature of an account Title of Account Debit side Credit Side
Nature of an account Title of Account Debit side Credit Side
Nature of an account Title of Account Debit side Credit Side

Nature of an account

Title of Account

Debit side

Credit Side

Golden Rule  Dr Receiver  Cr Giver
Golden Rule  Dr Receiver  Cr Giver
Golden Rule  Dr Receiver  Cr Giver
Golden Rule  Dr Receiver  Cr Giver

Golden Rule

Dr Receiver Cr Giver

Other Rules  Dr Assets  Cr Liabilities  Cr Capital  Dr Expenses &
Other Rules  Dr Assets  Cr Liabilities  Cr Capital  Dr Expenses &
Other Rules  Dr Assets  Cr Liabilities  Cr Capital  Dr Expenses &
Other Rules  Dr Assets  Cr Liabilities  Cr Capital  Dr Expenses &

Other Rules

Dr Assets

Cr Liabilities

Cr Capital

Dr Expenses & Losses

Cr Income & Gains

Other Rules Contd. Accounts To Record Entry in Account Assets An increase Dr …Thank You…
Other Rules Contd. Accounts To Record Entry in Account Assets An increase Dr …Thank You…
Other Rules Contd. Accounts To Record Entry in Account Assets An increase Dr …Thank You…
Other Rules Contd. Accounts To Record Entry in Account Assets An increase Dr …Thank You…

Other Rules Contd.

Accounts

To Record

Entry in Account

Assets

An increase

Dr

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A

Decrease

Cr

Liabilities

An Increase

Cr

A

Decrease

Dr

Capital

An Increase

Cr

A

Decrease

Dr

  Capital = Assets - Liabilities To increase Cr Dr Cr To decrease Dr Cr
  Capital = Assets - Liabilities To increase Cr Dr Cr To decrease Dr Cr
  Capital = Assets - Liabilities To increase Cr Dr Cr To decrease Dr Cr
  Capital = Assets - Liabilities To increase Cr Dr Cr To decrease Dr Cr
 

Capital

=

Assets

-

Liabilities

To increase

Cr

Dr

Cr

To decrease

Dr

Cr

Dr

Presented by Maxwell Amo-Hoyte

Presented by Maxwell Amo-Hoyte

OBJECTIVES

OBJECTIVES  Understand Concept of Double Entry  Calculate profit by comparing income and expenses 

Understand Concept of Double Entry

Calculate profit by comparing income and expenses

Explain the why expenses are debited and income credited

Make entries in T-Accounts

Explain concept of drawings

Effect of Profit & Loss on Capital 1. Capital=Assets-Liabilities 2. Old Capital + Proft =
Effect of Profit & Loss on Capital 1. Capital=Assets-Liabilities 2. Old Capital + Proft =
Effect of Profit & Loss on Capital 1. Capital=Assets-Liabilities 2. Old Capital + Proft =
Effect of Profit & Loss on Capital 1. Capital=Assets-Liabilities 2. Old Capital + Proft =

Effect of Profit & Loss on Capital

1.

Capital=Assets-Liabilities

2.

Old Capital + Proft = New Capital

Income and Expense  Dr Expenses  Cr Income
Income and Expense  Dr Expenses  Cr Income
Income and Expense  Dr Expenses  Cr Income
Income and Expense  Dr Expenses  Cr Income

Income and Expense

Dr Expenses

Cr Income

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