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O-Level Long-term borrowings

What the O-Level syllabus expects for Long-term borrowings, and how to practise it.

What the syllabus expects

• Explain how long-term borrowings and their interest expense are accounted for using the relevant accounting theories
  Scope: Relevant theories: matching and accrual basis of accounting
• Tell a bank loan apart from a bank overdraft
• Compute interest expense and interest expense payable
• Write the journal entries for taking a new loan, repaying it, and for interest expense and interest payable
  Scope: Year end is always 31 December; loans repaid in equal instalments; short-term loans excluded
• Draw up and read the long-term borrowings ledger account
• Read the interest expense ledger accounts once interest expense payable is adjusted for
• Produce, from both the Statement of Financial Position and the Statement of Financial Performance, extracts that set out interest expense, interest expense payable and the loan
  Scope: The portion payable within the next year is reclassified as current

More O-Level Principles of Accounts topics

Roles of accounting and of accountants · Stakeholders and what they need in order to decide · Judging profitability · Judging liquidity · Judging efficiency of inventory and trade receivables management · Kinds of business · all of O-Level Principles of Accounts