Introductory description

This module is only open to WBS undergraduate students, and some students taking joint degrees with WBS and another department. Students from other departments cannot take this module. To find detailed availability and to apply for this module, log in to my.wbs.ac.uk using your normal IT login details and apply via the my.wbs module application system. Once you’ve secured a place on my.wbs you should apply via your home department’s usual process, which usually takes place via eVision. Note that you do not require the module leader’s permission to study a WBS module, so please do not contact them to request it.

Module web page

Module aims

Outline syllabus

This is an indicative module outline only to give an indication of the sort of topics that may be covered. Actual sessions held may differ.

• Financial and management accounting as important sources of business information – what is it, who needs it and why it is important.
• How accounting information is produced – use of technology and human practice – its nature and limitations.
• Financial accounting Key financial statements – Income Statement, Statement of Financial Position and Statement of Cash flows. Assets and liabilities; revenues and expenses; capital and reserves. Accounting equations. Key underpinning concepts and principles of financial accounting (e.g. going concern, money measurement, historic cost, accruals, prudence and objectivity), where judgement is used. Recognition issues (i.e. what’s included in financial statements) – e.g. revenues. Measurement (valuation) issues – e.g. non-current assets, inventory, receivables. Differences between cash and profit and the importance of liquidity. Interpretation of financial statements and basic ratio analysis.
• Management accounting Cost-Volume-Profit Analysis for short-term decision making – cost behaviour, break-even, contribution, margin of safety, and limitations. Full Absorption Costing for decision making – cost categories (direct/indirect), allocation, apportionment and absorption of costs, over/under recovery of overheads, uses and limitations. Introduction to Activity Based Costing. Budgeting for planning and control – purposes, preparation and basic variance analysis.

Learning outcomes

By the end of the module, students should be able to:

• Explain the objectives of financial and management accounting as business tools, providing information for planning, decision making, control and the performance evaluation of management.
• Interpret the main financial statements drawing on appropriate accounting techniques.
• Explain the relevance of costs to the decision-making process and use a range of costing techniques to produce information that supports management decision-making.
• Understand how budgets are used for planning and control purposes, and the limitations of these.
• Appreciate the main underlying concepts and limitations of accounting information and the impact of these limitations on the use of such information.
• Appreciate the nature accounting information, and be able to describe the relationship between different branches of accounting (financial and management) and between different financial statements.
• Evaluate the underpinning principles of accountings and the limitations of accounting information.
• Apply management accounting concepts and practices to analyse business problems and inform their consideration.
• Interpret accounting information using a range of techniques including ratio analysis.

Indicative reading list

Core text:
Latest edition of: Atrill, P. and McLaney, E. Accounting and Finance for Non-Specialists.
Additional reading is identified as the latest edition of: Carey, M., Knowles, C. and Towers-Clark, J. (2017) Accounting: a smart approach (3rd edition). Oxford University Press: England. ISBN 978-0-19-874513-6

Subject specific skills

Use ratio analysis to interpret financial statements in order to evaluate a business' profitability, liquidity and asset management.
Understand the nature of costs and undertake the preparation of costing statements, using a range of costing approaches, and be able to extract this information to inform management decisions.
Prepare and analyse budgets, using basic variance analysis to support this analysis.

Transferable skills

Demonstrate financial awareness around the importance and relevance of accounting as a key business tool in decision making, planning and performance evaluation.
Be able to organise and use accounting information to support business problem solving and control.
Interpret financial statements to provide meaningful information to different business stakeholders.
Effectively communicate the results of analyses of financial statements and costing information to a range of business users.