ACCA, just like any other accounting qualification, is divided into various levels of difficulty which include the Knowledge level, Skills level, Essentials level and the Options level. In this blog we are going to discuss the Knowledge level and the best method of preparing for it. Read on to find out more!
What are ACCA Knowledge level papers?
The ACCA Knowledge level is the first level in the ACCA qualification and it comprises three modules — Accountant in Business, Management Accounting and Financial Accounting. Students can only progress to the Skills level if they pass all three modules. Each of the three modules are explained in detail below:
ACCA F1 – Accountant in Business:
This module gives students an introduction to the use of accountancy in business. It aims to inform them about the workings of business and its environment and how this affects the structuring in an organization. Students will also understand how accounting and other important business functions help in effective management and how this helps in the development of an organization and its employees. The ACCA F1 syllabus is as follows:
- Stakeholders in an organization and the external environment:
- The objective and varieties of business organizations;
- Shareholders in business organizations;
- Political and legal factors affecting business
- Macroeconomic factors;
- Microeconomic factors;
- Social and demographic factors;
- Technological factors;
- Environmental factors;
- Competitive factors.
- Functions and governance of the organizational structure in a business:
- The formal and informal business organization;
- Business organizational structure and design;
- Organizational culture in business;
- Committees in business organizations;
- Governance and social responsibility in business.
- Accounting and reporting systems, controls and compliance:
- The relationship between accounting and other business functions;
- Accounting and finance functions within business organizations;
- Accounting and auditing regulations;
- Importance of internal and external financial information;
- Financial systems, procedures and related IT applications;
- Internal controls, authorization, security of data and compliance within the business;
- Preventing fraud and fraudulent behaviour in business.
- Leading and managing individuals and teams:
- Leadership, management and supervision;
- Recruitment and selection of employees;
- Individual and group behaviour in business organizations;
- Team formation, development and management;
- Motivating individuals and groups;
- Learning and training at work;
- Review and appraisal of individual performance.
- Personal effectiveness and communication:
- Personal effectiveness techniques;
- Consequences of ineffectiveness at work;
- Competence frameworks and personal development;
- Sources of conflicts and techniques for conflict resolution and referral;
- Communicating in business.
- Professional ethics in accounting and business:
- Fundamental principles of ethical behaviour;
- The role of regulatory and professional bodies in promoting ethical and professional standards in the accountancy profession;
- Corporate codes of ethics;
- Ethical conflicts and dilemmas.
ACCA F2 – Management Accounting:
This module will help students understand management accounting methods which assist in designing, controlling and monitoring performance across the organization. The ACCA F2 syllabus is as follows:
- The importance of management information:
- Accounting for management;
- Sources of data;
- Cost classification;
- Presenting information.
- Cost accounting techniques:
- Accounting for material, labour and overheads;
- Absorption and marginal costing;
- Cost accounting methods;
- Alternative cost accounting principles.
- Budgeting:
- Nature and purpose of budgeting;
- Statistical techniques;
- Budget preparation;
- Flexible budgets;
- Capital budgeting and discounted cash flow;
- Budgetary control and reporting;
- Behavioural aspects of budgeting.
- Standard costing:
- Standard costing system;
- Variance calculations and analysis;
- Reconciliation of budgeted and actual profit.
- Performance measurement:
- Overview of performance measurement;
- Application of performance measurement;
- Cost reductions and value enhancement;
- Monitoring performance and reporting.
ACCA F3 – Financial Accounting:
This module aims to provide students with an understanding of concepts and principles in the sphere of financial accounting. It also teaches students how to use double-entry accounting methods including the preparation of financial statements. Take a look at the syllabus present in this module:
- The importance of financial reporting:
- The scope and purpose of financial statements for external reporting;
- Users’ and stakeholders’ needs;
- The main elements of financial reports;
- The regulatory framework. This includes legislation and regulation, reasons and limitations and the relevance of accounting standards;
- Duties and responsibilities of those charged with governance.
- The key features of financial information;
- The use of double-entry and accounting systems:
- Double-entry book-keeping principles including the maintenance of accounting records and sources of accounting information;
- Ledger accounts, books of prime entry and journals.
- Recording transactions and events:
- Sales and purchases;
- Cash;
- Inventory;
- Tangible non-current assets;
- Depreciation;
- Intangible non-current assets and amortization;
- Accruals and prepayments;
- Receivables and payables;
- Provisions and contingencies;
- Capital structure and finance costs.
- Preparing a trial balance:
- Trial balance;
- Correction of errors;
- Control accounts and reconciliations;
- Bank reconciliations;
- Suspense accounts.
- Preparing basic financial statements:
- Statements of financial position;
- Statements of profit or loss and other comprehensive income;
- Disclosure notes;
- Events after the reporting period;
- Statements of cash flows;
- Incomplete records.
- Preparing simple amalgamated financial statements:
- Subsidiaries:
- Associates
- Interpretation of financial statements:
- Importance and purpose of analysis of financial statements;
- Ratios;
- Analysis of financial statements.
Tips for passing the ACCA Knowledge level exams:
- Make the ACCA study guide your best friend: This is the document that ACCA examiners refer to while preparing the exams. Use the guide to familiarise yourself with the key parts of the syllabus and the concepts covered in the syllabus.
- Devour the ACCA official textbooks: Kaplan Publishing and BPP Learning Media are two of the content providers that are ACCA approved. These two publishing houses curate study texts to support ACCA study, especially for the Knowledge level exams. Students should read these books thoroughly to acquaint themselves with the context required to pass the exam. Furthermore, these books also include revision materials that will be of use to you.
- Familiarise yourselves with the question types in the ACCA exam: The ACCA papers are computer-based exams (CBEs) and they include a variety of objective type questions such as:
- Multiple-choice questions (MCQs);
- True or false;
- Multiple-response;
- Multiple-response matching;
- Number entry.
- Manage your time in the exams: All the three exams in this level include 50 questions that have to be answered in two hours, leaving you with only 1.2 minutes on average to solve each question. However, be aware that you might take less or more time to solve a question depending on its difficulty level. Also, if you are unable to solve a particular question, do not waste lots of time on it, instead come back to it later after solving the other questions.
- Take advantage of the ACCA website resources: While preparing for the ACCA exam papers, you are given access to multiple resources on the ACCA website that will hold you in good stead while studying for the exams. Some of these resources include:
- Study guide;
- Pilot Paper (paper-based revision exam);
- CBE practice papers;
- Examiner’s approach interview;
- Examiner’s report;
- Technical articles.
If you are interested in working as an ACCA qualified professional, the Toronto School of Management (TSoM) offers a Preparatory Course for ACCA Examination.
