ICAP PRC-1 Fundamentals of Accounting study plan

Trace a transaction from source document through books of prime entry to ledger posting, using at least three different transaction types

Apply the double-entry rule correctly for 20 journal entries covering expenses, income, assets, liabilities and capital, without looking at a model answer

Distinguish between a trial balance error that is revealed by extraction and one that is not, giving two examples of each

Record and post opening entries for a new sole trader, including capital introduced in cash and by bank transfer

Prepare a trial balance from a list of ledger balances and identify which balances go to debit versus credit

Make six year-end adjustments (accrual, prepayment, depreciation, closing inventory, bad debt write-off, allowance for receivables) and show each double entry

Produce an income statement and statement of financial position from an adjusted trial balance

Explain how each adjustment affects profit and net assets, in one sentence each

Prepare a bank reconciliation from a cash book and bank statement, treating unpresented cheques, uncredited deposits, standing orders, direct debits and bank charges

Update a cash book for items appearing only on the bank statement and prove the adjusted balance

Prepare receivables and payables control accounts and reconcile them to the sales and purchases ledger listings

Identify and correct errors using journal entries, including errors of principle, commission, omission, original entry and reversal

Use a suspense account to balance a trial balance and clear it once errors are found

Value closing inventory under FIFO and weighted average cost, and state why LIFO is not permitted under IFRS

Apply the lower of cost and net realisable value rule to at least four inventory lines and record the write-down

Compute depreciation under straight-line and reducing balance, including a part-year charge and a disposal mid-year

Record the disposal of a non-current asset, including profit or loss on disposal, accumulated depreciation and the asset cost account

Distinguish capital expenditure from revenue expenditure for six borderline items

Account for bad debts written off and for the allowance for receivables, including the movement in the allowance charged to profit or loss

Adjust for accruals and prepayments at both the current and the following year end, showing the reversal entry

Prepare an extended trial balance with accruals, prepayments and allowances columns

Draft the current asset and current liability sections of a statement of financial position from adjusted figures

Prepare partners' current and capital accounts, including interest on capital, partner salary, interest on drawings and profit share

Record the admission of a new partner including goodwill adjustments under the revaluation and memorandum methods

Prepare a partnership appropriation account and show the split of residual profit

Draft a statement of changes in equity and a statement of financial position for a limited company, including share issue and dividends

Record an issue of shares at a premium and a bonus issue from retained earnings

Compute and interpret gross margin, net margin, return on capital employed, current ratio, quick ratio, inventory turnover and receivables collection period

Analyse a set of ratio results and write three conclusions about profitability, liquidity and efficiency with the evidence cited

Prepare a receipts and payments account and an income and expenditure account for a not-for-profit entity, and reconcile the two

Use the mark-up and margin methods to derive missing figures from incomplete records

Construct a statement of affairs to find opening capital and profit from incomplete records

State the objective of general purpose financial statements and apply the qualitative characteristics to two recognition dilemmas

Apply the going concern, accruals, consistency and prudence concepts to explain why a given treatment is or is not acceptable

Identify the threats to fundamental principles from three short ethical scenarios and state the appropriate safeguard

Describe the controls a computerised accounting system should have over access, data entry and backups

Complete a timed mixed-topic mock under exam conditions and review every wrong answer