ACCOUNTING

Aventis School of Management

Module Leader: Dr. James Kwan
Email: james_kwan@singnet.com.sg

MODULE DESCRIPTION

The aim of this module is to introduce the basic concepts of accounting. The Course begins
with the definition of accounting, types of accounting, various steps in double entry system,
preparation of journal entries, trial balance and the financial statements. The concept of
capital and revenue expenditure, calculation of depreciation and related accounting
concepts will be discussed in this Course.

In this module, students will learn to:

1. Prepare the journal entries for various business transactions

2. Extract a Trial Balance to ensure arithmetical accuracy
3. Prepare the Financial Statements of Limited Companies
4. Accounting for Year-End Adjustments
5. Distinguish between Capital Expenditure and Revenue Expenditure
6. Interpret the Financial Statements using Ratio Analysis

Non-accounting professionals, executives and students without any accounting knowledge

will be benefitted from this course.

MODULE LEARNING OUTCOMES

On successful completion of this module, students will be able to:

• Understand process of Double Entry System

• Prepare the Journal Entries
• Prepare the Trial Balance
• Prepare the Statement of Profit or Loss and Statement of Financial Position
• Accounting for Year-End Adjustments
• Differentiate the Capital Expenditure and Revenue Expenditure
• Calculate the various Accounting Ratios and Interpret the Financial Statements

MODULE ASSESSMENT COMPONENTS (TOTAL 100%)

Formative Assessments (not graded, but participation is encouraged)

In class, students are expected to participate actively in class in the form of (1) Questions
and Answers and (2) Small Group Discussion. As such, students are strongly encouraged to
participate in class with insightful comments and questions that will help both your course
mates and you learn beyond the course contents.

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Summative Assessment (graded)

Assessment Question:

Question 1 [50 marks]

Ultra Clean Pte Ltd is in the business of providing cleaning services to factories and offices. The
company’s financial year ends on 31 December. During the financial year ended 31 December
2020, the accountant was on maternity leave from 10 August to 31 December.

During the accountant’s absence, an inexperienced accounts clerk prepared the accounts. Upon
her return from her maternity leave, the accountant obtained the trial balance as at 31 December
2020 prepared by the accounts assistant.

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Additional information:

(1) The company obtained a 3-year loan of $100,000 from the bank on 1 April 2019. The
whole loan will be repaid on 31 March 2022. The loan carries an interest rate of 6% per
annum, with interest payable semi-annually in arrears on 31 March and 30 September.
The company has no other borrowings.

(2) The company pays its annual insurance premium in advance on every 1 April. The
insurance coverage is from 1 April till 31 March of the following year. Its annual insurance
premium was increased from $14,400 to $17,280 with effect from 1 April 2020. There is
no other insurance premium paid.

(3) The depreciation for the financial year ended 31 December 2020 was $21,600.

(4) The accountant did a check on the cleaning supplies and found that $15,000 worth of
cleaning supplies was left in the storeroom as at 31 December 2020.

(5) On 1 October 2020, $50,000 cash was received in advance from a new customer. The
accounts assistant recorded the cash collection to unearned revenue account. The
accountant confirmed that cleaning services amounting to $30,000 was rendered by 31
December 2020.

(6) On 6 January 2021, the accountant received the utilities bill for December 2020,
amounting to $580. The invoice has not been recorded.

(7) On 30 September 2020, the accounts clerk correctly recorded the issuance of shares
capital of $30,000.

Required

(a) Prepare the adjusting or correcting journal entries (if any), without dates and narrations,
for the financial year ended 31 December 2020. (15 marks)

(b) Prepare the adjusted trial balance as at 31 December 2020. (10 marks)

(c) Prepare Statement of Profit or Loss for the year ended 31 December 2020. (10 marks)

(d) Prepare the Statement of Financial Position as at 31 December 2020. (10 marks)

(e) Explain one (1) accounting principle that the accounts assistant has violated. Cite one (1)
transaction that the accounts assistant has recorded or not recorded to support the
violation that you have identified. (5 marks)

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Question 2 [50 marks]

Part I

On 8 Aug 2018, Singapore Telecommunications Limited’s (Singtel) first-quarter net profit fell
6.6% from a year ago, in part due to fierce competition in some of its markets and adverse
currency movements. Singtel, Southeast Asia's largest telecom operator, posted a net profit of
S$832 million for the three months ended in June, compared with S$890 million for the same
period in the previous year. Underlying net profit, fell more than 19% to S$733 million. Revenue
fell 0.5% to S$4.13 billion.

Competition affected India's Bharti Airtel (Airtel) and Indonesia's Telkomsel (Telkomsel), in which
Singtel owns a stake, leading to a decline in its regional associates' overall profits. Singtel is also
set to face fresh competition in its home market of Singapore with the expected arrival of a new
entrant later this year. In a statement released to the Singapore Exchange, Singtel said that
Airtel's profits were affected by intense competition, as well as mandated cuts in mobile
termination rates in India. Telkomsel's earnings were weighed down by intense price competition,
particularly during the mandatory registration of prepaid SIM cards, Singtel said.

Singtel CEO Chua Sock Koong said: “While competition remains keen in Indonesia and
particularly India, both Telkomsel and Airtel have nonetheless gained market share. We have
started to see revenue stabilise on a sequential quarter basis for India. As leading operators in
their markets, all our regional associates continue to ride the growth in data and we are positive
on their long-term growth potential.”

Reference:

Cheok, Jacquelyn. “Singtel Q1 profit drops 7% on weaker results from Airtel, Telkomsel” The
Straits Times, August 8, 2018, 8.08 am SGT
Singtel Q1 profit drops 7% on weaker results from Airtel, Telkomsel, Companies & Markets News
& Top Stories - The Straits Times

Required

You are a newly hired financial analyst assigned with the task of understanding whether
there are any long term concerns regarding Singtel’s net profit drop.

Using the information provided above answer the following questions:

(a) Suggest two alternative financial ratios you might use to understand Singtel’s
performance and provide reasons to support your choices. Remember to relate
your ratios to the discussion points in the article.

(b) This article is overly focused on Singtel’s profit, using your knowledge of
accounting acquired in this course, provide two limitations on why focusing solely
on changes in profit can be problematic in analysing a company’s financial
condition.

(c) This article states that ‘underlying net profit, fell more than 19% to S$733 million.
Revenue fell 0.5% to S$4.13 billion’. Given this statement, provide any two
possible reasons that were not discussed in the article.

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Part II

As a well-trained PGDBA student you realised that the information provided above does
not contain any financial information on SingTel. Doing your own research, assume you
collect the following information

Required

Using the information collected briefly explain why the 2018’s return on equity is lower
than 2017’s. Use your calculations to make a recommendation to Singtel on how to
improve its return on equity. (Hint: Start your analysis by using the DuPont Framework)

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Assessment Requirements:

• Word limit: 1200 to 1500 words

• Font Size: 12pt (preferably Arial)
• Line spacing: 1.5 lines
• Cover Page must be included
• References and citations: All claims must be backed by research and cited
according to APA/Harvard format. This is part of your assessment components.

Instructions for Submission:

Coursework components Weightage

Individual Assignment – Take Home 100%
TOTAL 100%

MINIMUM AWARD REQUIREMENTS

To graduate from the Postgraduate Diploma in Business Administration, a minimal grade

of PASS for this module is required

ACADEMIC HONESTY & PLAGIARISM

Academic integrity and honesty is essential for the pursuit and acquisition of knowledge. The
University and School expect every student to uphold academic integrity & honesty at all times.
Academic dishonesty is any misrepresentation with the intent to deceive, or failure to acknowledge
the source, or falsification of information, or inaccuracy of statements, or cheating at
examinations/tests, or inappropriate use of resources.

Plagiarism is ‘the practice of taking someone else's work or ideas and passing them off as one's own'
(The New Oxford Dictionary of English). The University and School will not condone plagiarism.
Students should adopt this rule - You have the obligation to make clear to the assessor which is your
own work, and which is the work of others. Otherwise, your assessor is entitled to assume that
everything being presented for assessment is being presented as entirely your own work. This is a
minimum standard. In case of any doubts, you should consult your instructor.

COLLUSION

Where there is a requirement for the submitted work to be solely that of an individual student,
collaboration is not permitted. Students who improperly work together in these circumstances are
guilty of collusion.

IMPERSONATION

A student who is substituted by another person in an examination, or who submits by substitution the
work of another person as their own, is guilty of deception by impersonation. The offense of
impersonation can be applied to the student and to the accomplice.

OTHER FORMS OF DECEPTION

Any action through which students seek to gain an unfair advantage in assessment constitutes an
academic offence, such as, for instance, submitting the same piece of work for separate modules.

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EXCEPTIONAL EXTENUATING CIRCUMSTANCES (EEC)

The EEC policy aims to support students in their transition to academic life. When personal
extenuating circumstances, such as learning difficulties or circumstances that can impact a student’s
ability to study or submit assignments according to the timetable, rather than seeing them in a position
where they might have to withdraw from the programme, we allow them to work at an individual pace
within broad deadlines where applicable. Valid reasons include business travels, sickness, and other
emergencies may be considered in this policy. Generally, work commitments are not considered for
EEC as all of our students are also working adults with working commitments.

Kindly write in to the student services with your reasons and supporting documents to be considered
on a case by case basis.

RE-SIT AND RE-MODULE POLICY

Students who fail the assessment on the 1st attempt shall be permitted to do re-sit for the
failed component once at a nominal fee as stated in their PEI Student Contract. The eligibility
to qualify for the re-sit is 0 to 49 marks. Students who fail to pass the re-sit will have to re-take
the module.

Penalty for taking the re-sit assessment is capped at 50% (Grade P@) regardless of their
scores attained during re-sit. The passing mark for the re-sit is 50/100. If students fail or are
absent (no submission) for the re-sit, they will be required to re-module or repeat the entire
module, unless mitigating circumstances can be shown.

For students who are offered a re-sit, they are required to improve and resubmit their original
work as well as adding a further 500 words reflective commentary discussing what they have
learned from the process as part of their assignment.

MODULE LESSON PLAN / TIMETABLE

Session Date Details

1 Introduction to Accounting

Introduction to Accounting – Learning Outcomes for this lesson:

▪
Meaning of the term ‘Accounting’
▪ Types of Accounts
▪
Definition of Debit and Credit
▪
Rules of Double Entry System
▪
Process of Double Entry System
▪
Preparation of journal entries
▪ Trial Balance
▪
Errors not disclosed by Trial Balance

2 Financial Statements of Limited Company

Financial Statements of Limited Company – Learning Outcomes

for this lesson:
▪
General Accounting Terms

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 Session Date Details
▪
Types of Financial Statements
▪
Format of Financial Statements
▪
Rules of Double Entry System
▪
Statement of Profit or Loss
▪
Statement of Financial Position
▪
Class Exercises & Practice Questions
Capital Expenditure and Revenue Expenditure and Ratio
3 Analysis

– Learning Outcomes for this lesson:

▪
Meaning of Capital Expenditure and Revenue Expenditure
▪
Distinctions between Capital and Revenue Expenditure
▪ Ratio Analysis

▪ Revision

RECOMMENDED READINGS AND WEBSITES

You are not required to purchase a textbook for the course. However, these are
supplementary articles/readings that can help enhance your understanding of the
topics covered.

• Accounting for Non-Accounting Students – 9th Edition, John R. Dyson, Prentice Hall

GRADING SCHEME
Please refer to attached.

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 High Distinction (HD) Distinction (D) Credit (C) Pass (P) Fail (F)
80-100% 70-79% 60-69% 50-59% <50%
Knowledge • Outstanding Subject • Uses a wide range of • Draws together key • Uses some relevant • No/ very limited use of
knowledge ideas and concepts ideas and concepts ideas and concepts ideas and concepts
• Effectively introduces from the module from the module from the module from the module to
and integrates • Draws different effectively • Limited gaps in answer the question
knowledge from concepts together • Some use of knowledge or • No/very limited
independent study effectively theoretical models misunderstanding of supporting literature
beyond scope of • Strong use of relevant and/or research to concepts
module materials theoretical models support answer • Some relevant
• Draws links to other and/or research • Evidence of some references but may be
modules • Fully referenced with independent research overreliance on core
• No further wide range of sources but largely guided by textbooks/overuse of
development of • Strong evidence of references provided in direct quotes etc.
answer required independent research the module
to enhance the answer
Critical Thinking • Extensive critical • Researched and • Strong development • Acknowledges some • A one-sided answer
evaluation of answered from of alternative with no consideration
arguments and different angles. advantages/disadvant interpretations to the of alternative
referenced research • Considers the ages, pros and cons answer e.g. viewpoints.
and literature limitations of some of etc. evident in answer advantages and
the research sources • May be some disadvantages, pros
used evidence different and cons
approaches to
answering the
question are
understood

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 High Distinction (HD) Distinction (D)
80-100% 70-79%
Application • Thoughtful and • Tailors information to
thorough application answer the question
of knowledge, theory fully
and research to case • Illustrates answer with
study throughout range of
analysis and organisational
recommendations examples
• Links relevant
personal
examples/experiences
to appropriate
theoretical concepts
and literature
• Applies concepts
thoroughly to case
study organisation
Evaluation • All concepts and • Answers the question
material fully relevant fully covering all key
to the analysis and concepts
recommendations • No evidence of
including materials ‘padding’ with
sourced from irrelevant information
independent research
Credit (C) Pass (P) Fail (F)
60-69% 50-59% <50%
• Illustrates answer with • Examples are very • No or inappropriate
some appropriate limited or lack use of examples
organisational relevance • No links to case study
examples discussed • Case study is organisation
during the module mentioned but poorly
• Uses personal integrated into the
examples but may not answer
always link this back to
theoretical concepts
and literature
• Links to case study but
integration with
theory/research may
still be disjointed in
places
• Chooses appropriate • Some effort to answer • Does not answer the
concepts and makes a the question question that was
clear attempt to • Some missing or weak asked
answer the question elements • Covers concepts which
• Information is mostly • Covers some relevant are not relevant to the
relevant to the concepts but links to answer.
question answer are unclear in
• Only minor missing places
elements • Important concepts
• Minimal ‘padding’ may be difficult to
with irrelevant extract from other
information irrelevant information
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 High Distinction (HD) Distinction (D) Credit (C) Pass (P) Fail (F)
80-100% 70-79% 60-69% 50-59% <50%
Organization and • Outstanding, • Logical organisation • Well-structured • Some • Very difficult to read
Language sophisticated written and flow of ideas answer spelling/grammatical and follow
communication • Error free written • Only minor errors but do not • Extensive problems
• No significant areas communication spelling/grammatical significantly interfere with written
for further • Precise Harvard errors with understanding presentation
development Referencing • Good grasp of Harvard • Some attempt to • No or incorrect
• An enjoyable read Referencing Harvard Reference Referencing
• Mainly easy to read • Difficult to read and
and follow follow in places

Referencing and • Sources are • Sources are well • Sources support some • Sources support a few • The paper does not
Citations exceptionally well- integrated and claims made in the claims in the paper, use adequate research
integrated and they support the paper’s paper, but might not but are not integrated or if it does, the
support claims argued claims. be integrated well well within the paper’s sources are not
in the paper very • There may be within the paper’s argument. integrated well.
effectively. occasional errors, but argument. • There may be multiple • They are not cited
• Quotations and works the sources and works • There may be a few errors in citing. correctly according to
cited conform cited conform to errors in citing. international
international international standards.
standards (APA/MLA) standards (APA/MLA)

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