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Financial Accounting

Accountancy · Level 6  ·  7 Chapters

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What Financial Accounting covers

Preparing financial statements for sole traders, companies, manufacturers and non-profit organisations is the core of Financial Accounting at Level 6. You start with the accounting framework, sources of regulation, accounting standards, professional ethics and the accounts for property, plant and equipment, intangible assets, financial assets and loans. Statements follow for sole traders, with partnership changes such as admission, retirement and a new profit sharing ratio, then for companies, including a complete published set. Manufacturing entities need a manufacturing account and cost apportionment, while non-profit organisations use funds and an income and expenditure account. You analyse statements with ratios and cash flow statements, and finish with public sector accounting, its structure, regulation and techniques.

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Careers after Financial Accounting

Financial accounting skills open doors across Kenya’s formal and informal economy. Whether you join a bustling manufacturing plant, support a community-based partnership, or help a non-profit keep its books straight, the ability to produce reliable financial statements is a passport to steady income and career growth.

  • Accounting departments of medium-size manufacturing firms in Thika or Nakuru - you track plant, property and equipment movements, classify manufacturing, selling and administration costs, and prepare the manufacturing account, income statement and statement of financial position, earning a salary as a cost or financial accountant.
  • Partnership bookkeeping services for family-run retail shops in Eldoret or Mombasa - you draft partnership income statements and statements of financial position, record admissions, retirements and changes of partners, and apply the profit-sharing ratio from the partnership deed, charging clients per partnership cycle or working as an in-house accountant.
  • Micro-finance institutions and SACCOs in Kisumu or Machakos - you determine assets and liabilities, prepare cash-flow statements and full financial statements even when data is incomplete, supporting loan appraisal and regulatory reporting, and earn a position as a financial analyst or accountant.
  • Non-governmental organisations (NGOs) delivering humanitarian projects in Turkana or Kilifi - you identify fund categories, establish fund accounting treatment, and prepare income-expenditure accounts and statements of financial position that satisfy donor requirements, working as a project accountant or freelance grant-finance consultant.
  • County government finance units in Nakuru or Kiambu - you classify and apportion costs between administrative, service-delivery and capital projects, prepare statements of cash flows for public budgeting, and receive a civil-service accounting posting.
  • Agricultural cooperatives and processing plants in Embu or Meru - you apply manufacturing-entity features, allocate production costs, and produce financial statements that help members gauge profitability, earning either a salaried cooperative accountant role or a commission-based advisory position.
  • Boutique consulting firms offering financial-statement preparation for start-ups in Nairobi’s Westlands - you handle incomplete information, draft accurate income statements and balance sheets for new businesses, and charge consulting fees or work freelance, building a reputation that can lead to long-term contracts.
  • Hospital finance departments in county referral hospitals in Eldoret or Kisumu - you manage non-profit accounting, establish fund accounting for donor-restricted and unrestricted funds, and prepare statements of financial position, securing a health-sector accountant salary.
  • Construction and real-estate development companies in Mombasa or Nairobi’s industrial zones - you determine assets and liabilities for large projects, track PPE movement schedules, and prepare cash-flow statements for project financing, earning a project-accountant or cost-control role.

Mastering these accounting techniques means you can turn numbers into trusted information wherever money moves - giving you the confidence to earn a reliable income and the flexibility to shape your own career path. Keep learning, stay precise, and watch the opportunities grow!

Chapters

1
Accounts for assets and liabilities
12 topics
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2
Prepare financial statement of sole trader
3 topics
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3
Prepare financial statement of a company
2 topics
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4
Prepare financial statement of a manufacturing entity
3 topics
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5
Prepare financial statement of a not profit making organization
4 topics
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6
Analyse financial statement
4 topics
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7
Carry out public sector accounting
8 topics
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What Financial Accounting covers: 36 main topics in 7 chapters

1. Accounts for assets and liabilities

  1. 1.1 The accounting framework
  2. 1.2 Sources of regulations at national and global levels; the law (Companies Act),
  3. 1.3 professional bodies, global regulatory bodies
  4. 1.4 Accounting standards (IASs/IFRSs) (their importance and limitations)
  5. 1.5 Professional ethics
  6. 1.6 Property, plant and equipment - recognition, capital and revenue
  7. 1.7 expenditure, measurement (depreciation and revaluation), disposal
  8. 1.8 and disclosures - property, plant and equipment schedule
  9. 1.9 Intangible assets - recognition, measurement (amortisation,
  10. 1.10 impairment and revaluation), disposals and disclosures
  11. 1.11 Financial assets and instruments
  12. 1.12 Loans - Accounting treatment of repayment of principal and interest

2. Prepare financial statement of sole trader

  1. 2.1 Income statement
  2. 2.2 Statement of financial position
  3. 2.3 Changes in partnership admission of a new partner, retirement and change in profit sharing ratio

3. Prepare financial statement of a company

  1. 3.1 Financial statements - income statement and statement of financial position
  2. 3.2 Published financial statements (Describe a complete set of published financial statements but reports not preparation

4. Prepare financial statement of a manufacturing entity

  1. 4.1 Features of a manufacturing entity
  2. 4.2 Classification and apportioning costs between manufacturing and selling and administration
  3. 4.3 Financial statements - manufacturing account, income statement and statement of financial position

5. Prepare financial statement of a not profit making organization

  1. 5.1 Features of Non-profit making organizations
  2. 5.2 Types of funds and their accounting treatment
  3. 5.3 Income and expenditure account
  4. 5.4 Statement of financial position

6. Analyse financial statement

  1. 6.1 Meaning of terms
  2. 6.2 Financial ratios -categories, analysis and interpretation, application
  3. 6.3 and limitations
  4. 6.4 Statement of cash flows (categories of cash, methods of preparing statement of cash flows and the importance)

7. Carry out public sector accounting

  1. 7.1 Features of public sector entities
  2. 7.2 Structure of the public sector
  3. 7.3 Regulatory structures and oversight [IPSAS, PSASB (establishment, mandate and functions), Director of Accounting Services, National Treasury, Parliamentary Committees, Accounting Officers at national and county levels)
  4. 7.4 Objectives of public sector financial statements
  5. 7.5 Objectives of IPSAS
  6. 7.6 Accounting techniques in public sector (budgeting, cash, accrual, commitment and fund)
  7. 7.7 (Preparation of financial statements should be excluded)
  8. 7.8 Emerging issues and trends

Revise this unit

Exam-style questions 98 Written to CDACC standard, with answers Test yourself 197 Multiple-choice, one at a time Practise questions 157 Quick recall — check you know the facts
3 more for this unit
Oral exam preparation 50 What the assessor asks, and how to answer out loud Worked calculations 35 Step-by-step maths with the common mistakes Quick cards 978 Myth busters, skill tips and scenarios

Beyond the syllabus

Decision simulator 5 On site, what would you do? Workplace scenarios 100 Real site situations — what would you do? Turn this into income 60 Where this skill earns — what to charge, how to find clients

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