D07 FINANCIAL AND QUANTITATIVE METHODS

Prerequisites None beyond those required for any student undertaking the Diploma Course.

Assessment By a single 3 hour externally set examination paper.

1. Understand the role which accounting information plays within an organisation and how it is collected.
2. Understand basic accounting procedures.
3. Be aware of the requirements of computerised accounting systems.
4. Appreciate the need for control and audit procedures.
5. Understand how to interpret final accounts and how to assess the profitability of an organisation
6. Be aware of methods of costing and of their application in accounting procedures.
7. Be aware of methods of assessing current performance and of forecasting the future performance of an organisation.
8. Appreciate the influence of the electronic office on accounting practice.
9. Understand number systems with specific reference to the systems used in computers.
10. Appreciate sources of error in the numbers entered into and stored in a computer.
11. Understand basic algebraic symbols and manipulations, together with an ability to formulate and to solve problems by algebraic means.
12. Understand the concept of a function and be able to recognise functions and associate graphs.
13. Appreciate the concept of a matrix and the use of matrices in the solution of practical problems.
14. Understand the methods used to summarise and to display data.
15. Understand elementary probability and its applications to practical problems.
16. Appreciate sampling techniques together with applications to management science.

1.1 Describe how accounting information can be used in the internal control of an organisation.

1.2 Identify documents used to capture financial information e.g. invoices, credit notes.

1.3 Categorise financial transactions e.g. capital, revenue, expenses and payments.

2.1 Demonstrate the ability to classify, record and summarise financial transactions into the appropriate accounting records.

2.2 Extract Trial Balance and prepare simple Profit and Loss Accounts and Balance Sheets.

3.1 Identify the main features and functions of a computerised accounting system.

4.1 Explain why control and audit procedures are essential in the handling of accounting information.

4.2 Describe methods of providing information to internal and to external auditors. 

5.1 Demonstrate the ability to analyse final accounts by the use of ratios relating to liquidity, profitability, use of assets.

5.2 Understand the principle of working capital and the implication of changes in the working capital.

5.3 Appreciate the limitations of basic financial ratios from given data within final accounts.

6.1 Be aware of the different methods of stock valuation, namely First In First Out, Last In Last Out, Average Cost and their effects upon company profits and assets.

6.2 Understand the concepts of direct and indirect costs and fixed and variable costs, and preparation of manufacturing accounts.

6.3 Appreciate the purpose of Standard Costing and budgetary control.

6.4 Demonstrate the ability to produce standard costs and variances.

7.1 Demonstrate the ability to produce forecasts from historical data using trends and variances e.g. by moving averages.

7.2 Understand the impact of changes in the value of money upon accounting statements.

7.3 Demonstrate the ability to convert statements to common values using indices.

Objectives

8.1 Describe how current technology can be used in preparing and presenting financial information e.g. spreadsheets, business graphics.

9.1 Appreciate the importance and the role of the base in a number system.

9.2 Be familiar with both the binary and the hexadecimal number systems and be able to convert from decimal (integers and fractions) to each of the number systems, and vice-versa.

9.3 Add, subtract and multiply binary numbers ad use the ‘twos complement’ method for binary subtraction.

9.4 Understand how computers store numbers, including negative numbers and real floating-point numbers.

10.1 Understand how errors arise from the storage of numbers in computer memory and appreciate the growth of error in a series of calculations.

10.2 Understand the size of errors and orders of magnitude.

10.3 Understand significant figures and calculations to given numbers of decimal places.

10.4 Understand the rules of rounding.

10.5 Understand the terms ‘absolute’, ‘relative’ and ‘percentage’ error.

10.6 Understand the concept of maximum error and its calculation in addition, subtraction, multiplication and division.

11.1 Understand the use of letters to represent numeric values.

11.2 Understand the meaning of variables, constants, subscripts and powers. Fractional, zero and negative powers.

11.3 Understand index notation and the rules for addition subtraction, multiplication, division and exponentiation of algebraic quantities.

11.4 Manipulate and solve simple linear and quadratic equations in one variable.

11.5 Form and solve simultaneous linear equations in two variables.

11.6 Understand the meaning of an inequality, and solve problems involving simple linear inequalities in one variable.

12.1 Understand the concept of a function and be familiar with the function notation f(x).

12.2 Calculate function values and be able to plot the graphs of functions using rectangular co-ordinates.

12.3 Understand, and apply to the solution of problems, linear, quadratic, exponential and logarithmic functions.

12.4 Use graphs to estimate values, extrapolate and interpolate.

12.5 Use graphical methods to solve simple linear programming problems.

13.1 Understand the definitions of arrays and matrices, and be able to use single and double subscript notation to the elements of a matrix.

13.2 Perform the operations of addition, subtraction and multiplication on matrices.

13.3 Understand the concept of the inverse of a matrix and be able to find the inverse of a 2 x 2 matrix.

13.4 Apply matrix algebra to the solution of simultaneous equations and to the solution of practical problems.

13.5 Use simple probability matrices, and apply them to problems such as market shares of goods.

14.1 Construct frequency tables from raw data.

14.2 Understand the various conventions for the construction of class intervals.

14.3 Display data using pictograms, pie charts, histograms, bar charts, and cumulative frequency curves.

14.4 Appreciate the distinction between discrete and continuous data and between quantitative and qualitative data.

14.5 Use arithmetic measures to summarise data using measures of central tendency and dispersion.

14.6 Determine the mean, mode, median, range, quartiles, interquartile and interpercentile ranges, variance and standard deviation from grouped and from ungrouped data.

15.1 Understand the relative frequency definition of probability.

15.2 Understand the additive and multiplicative laws of probability and their applications.

15.3 Understand the concept that the area under a probability distribution function measures probability.

15.4 Understand the Normal Distribution function and the use of Normal Distribution tables.

15.5 Estimate the mean and the standard deviation of a population by using the values contained in a sample from that population.

15.6 Calculate probabilities based upon the Normal Distribution and, using large size sample assumptions, about individual values related to population parameters.

15.7 Establish confidence intervals for large samples taken from a parent population and hence establish the significance of the mean of a large sample.

Objectives

16.1 Understand the reasons for sampling from a population.

16.2 Understand the standard sampling methods: simple random, stratified, systematic, cluster, quota and ratio estimates.

16.3 Understand census and survey techniques, and understand how to assess the results of statistical analysis.

16.4 Understand the methods of preparing questionnaires, the problems and the limitations.

16.5 Appreciate that sample statistics are estimates of parent parameters.

16.6 Appreciate the effect of sample size on the estimates provided by sampling.