Foundations

F1 — Accounts Preparation

F1 Accounts Preparation is the ACCA 2027 Foundations-level paper that succeeds the FFA variant of FA/FFA Financial Accounting. The scope is significantly narrowed: F1 covers only sole-trader bookkeeping and sole-trader financial statements. Everything relating to limited companies, group accounting, interpretation, cash flows, provisions, intangible assets and the regulatory framework has been removed. Payroll (new to ACCA at this level) and a more detailed treatment of petty cash are added.

FormatCBE · 2 hours · 100 marks

Pass Mark50%

Legacy PaperFA/FFA — Financial Accounting

Sections7 sections (A, B, C, D, E, F, G)

Current-syllabus equivalentOur paper mapping does not identify a current ACCA paper for F1.

Transition Planner

Exam Format

Section A: 45 × 2-mark OTs (90 marks) · Section B: 1 × 10-mark MTQ on sole trader financial statements · 2 hours · 100 marks

Key Changes vs Legacy Paper

Scope narrowed to sole trader only — no limited company content, no consolidations, no interpretation ratios, no cash flows
Payroll added as new standalone subsection (D2)
Petty cash expanded with imprest vs non-imprest systems (D3)
Exam format: Section A expanded from 35 to 45 OTs; MTQs reduced from 2×15-mark to 1×10-mark
Consolidation MTQ removed entirely

Syllabus Comparison — FA/FFA → F1

Change	Area / Topic	Detail
REMOVED SECTION	Context and purpose of financial reporting (FA/FFA Section A)	FA/FFA Section A (5 subsections) is entirely absent from F1: scope and purpose of financial statements; stakeholders and their information needs; main elements (SFP, SPL&OCI, SCE, SCF purposes); regulatory framework (IFRS Foundation, IASB, IFRS Advisory Council, IFRIC, ISSB roles; role of IFRS Accounting Standards); duties and responsibilities of directors in FS preparation. F1 does not test any knowledge of the regulatory framework or governance context.
REMOVED SECTION	Consolidated financial statements (FA/FFA Section H)	FA/FFA Section H (Subsidiaries + Associates) is entirely absent from F1. No group accounting content: no goodwill calculation, no NCI, no intra-group eliminations, no unrealised profit removal, no fair value adjustments, no equity method. The Section B consolidation MTQ (15 marks in FA/FFA) is removed entirely from F1.
REMOVED SECTION	Interpretation of financial statements (FA/FFA Section I)	FA/FFA Section I (importance and purpose; ratio calculation — profitability/liquidity/efficiency/position; analysis and conclusions; presentation to users) is entirely absent from F1. No ratio analysis in F1 at all.
REMOVED	Qualitative characteristics of useful financial information (FA/FFA B2)	FA/FFA B2: relevance, faithful representation, comparability, verifiability, timeliness, understandability — all removed. F1 A1 only covers the 8 key principles/concepts (going concern, accrual, materiality, consistency, prudence, duality, business entity, historical cost).
REMOVED	Key principles — offsetting, substance over form, current value (FA/FFA B1)	FA/FFA B1 had 10 items including offsetting, substance over form, and "historical cost and current value." F1 A1 has 8 items — offsetting, substance over form and the current value element are not included.
REMOVED	Intangible non-current assets and amortisation (FA/FFA D6)	FA/FFA D6: tangible vs intangible differences; types of intangibles; R&D definition and treatment per IFRS Accounting Standards; capitalise vs expense development expenditure; purpose and calculation of amortisation — entirely absent from F1. F1 D5 covers tangible NCAs only.
REMOVED	Provisions and contingencies (FA/FFA D9)	FA/FFA D9: define provision, contingent liability and contingent asset per IFRS; distinguish and classify items; accounting methods for provisions vs contingent liabilities vs contingent assets; calculate provisions and changes; prepare journal entries; report in FS — entirely absent from F1.
REMOVED	Limited company capital structure and finance costs (FA/FFA D10)	FA/FFA D10 covered limited liability company capital structure: ordinary/preference shares, borrowings; equity components; bonus and rights issues (calculation and recording); dividends; interest expenses; statement of changes in equity. All removed from F1. F1 D8 replaces this with sole-trader-only content: capital injected vs third-party funding, impact of capital changes on FS, journal entries for capital introduced/drawings/retained profits.
REMOVED	Statement of cash flows (FA/FFA G5)	FA/FFA G5: differentiate profit and cash flow; management cash flow control; benefits/drawbacks of SCF; classify transactions; calculate operating activities (direct and indirect), investing activities and financing activities; prepare SCF; identify treatment of transactions — entirely absent from F1.
REMOVED	Events after the reporting period (FA/FFA G4)	FA/FFA G4: define events after the reporting period per IFRS; classify as adjusting or non-adjusting; how each is reported in FS — not in F1. (This topic appears in K1 C11 — it was moved upward in the qualification to the Knowledge level.)
REMOVED	Disclosure notes (FA/FFA G3)	FA/FFA G3: purpose of disclosure notes; draft disclosure notes for NCAs (tangible and intangible), provisions, events after the reporting period, inventories — not in F1.
REMOVED	NCA revaluation, part-exchange and depreciation adjustments (FA/FFA D4/D5)	FA/FFA covered: revaluation of tangible NCAs (recording in general ledger, presentation in SPL&OCI/SFP, gain/loss on disposal of revalued assets, excess depreciation transfer to retained earnings); part-exchange transactions on disposal; depreciation adjustments for changes in useful life or residual value. None of these appear in F1 D5.
REMOVED	FIFO/AVCO inventory valuation methods (FA/FFA D3)	FA/FFA D3: calculate closing inventories using FIFO and AVCO (periodic weighted average and continuous weighted average); identify impact of valuation methods on profit; explain continuous vs period-end records — not in F1 D4. F1 only requires comparing cost to NRV and preparing cost of sales journal entries.
REMOVED	Receivables detail — aged analysis, credit limits, contras (FA/FFA D8)	FA/FFA D8 included: benefits/costs of offering credit; purpose of aged receivables analysis; purpose of customer credit limits; account for contras between receivables and payables; prepare/reconcile/explain purpose of supplier statements. These are not in F1 D6.
NEW	Payroll (F1 D2)	F1 D2a: "Calculate staff costs and employee deductions [S]." F1 D2b: "Prepare journal entries to account for payroll transactions [S]." Not in FA/FFA at all. (Also appears in K1 C2 — added at both Foundations and Knowledge levels.)
NEW	Purpose of reconciliations (F1 E1)	F1 E1a: "Describe the general purpose of reconciliations and why it is important to perform regular reconciliations and to deal with discrepancies promptly [K]." New standalone subsection — FA/FFA went directly into the specific reconciliation types without a general purpose subsection.
EXPANDED	Petty cash (F1 D3 Cash and cash equivalents)	FA/FFA D2 only described the need for a petty cash record. F1 D3 expands to: imprest vs non-imprest system and preparation of petty cash reconciliations; calculating cash transaction amounts including petty cash and preparing journal entries. Section renamed from "Cash" to "Cash and cash equivalents."
EXAM CHANGE	Section A grows; Section B cut from 2×15 to 1×10	FA/FFA: Section A 35×2-mark OTs (70 marks) + Section B 2×15-mark MTQs — consolidations MTQ and accounts preparation MTQ — 100 marks total. F1: Section A 45×2-mark OTs (90 marks) + Section B 1×10-mark MTQ (Section G sole trader financial statements only) = 100 marks. The consolidation MTQ is removed entirely. The accounts preparation MTQ is retained but reduced from 15 to 10 marks and restricted to sole trader only.

Syllabus Breakdown

Accounting Principles

The purpose of accounting

Identify the purpose of accounting and the needs of stakeholders
Distinguish between bookkeeping and accounting
Identify the role of the accountant in recording, summarising and reporting financial information

Accounting concepts and the qualitative characteristics

Identify the underlying concepts: going concern, accruals, consistency, prudence, materiality, business entity
Identify the qualitative characteristics: relevance, faithful representation, comparability, verifiability, timeliness, understandability

Types of business entity

Identify the characteristics of sole traders, partnerships, limited companies and not-for-profit organisations
Understand the differences between the types of entity

Double-Entry Bookkeeping

The accounting equation and double-entry bookkeeping

Understand assets, liabilities and equity
Understand the accounting equation
Understand debit and credit entries
Process transactions using double-entry bookkeeping

Books of prime entry

Identify the books of prime entry: sales day book, purchases day book, sales returns day book, purchases returns day book, cash book, petty cash book, journal
Explain the purpose of each book of prime entry

Journal Entries and Ledger Accounts

Journal entries

Prepare journal entries for: opening entries, closing entries, correction of errors, irrecoverable debts, allowance for receivables, accruals, prepayments, depreciation, disposals

Ledger accounts

Post journal entries to ledger accounts
Balance off ledger accounts
Prepare control accounts: sales ledger control, purchases ledger control

Recording Transactions

Sales and purchases

Record credit sales and credit purchases
Record sales returns and purchases returns
Record discounts allowed and received
Calculate and record sales tax

Payroll

Calculate staff costs including gross pay, employee deductions (tax, national insurance, pension)
Prepare payroll journal entries
Record employer's contributions

Cash and cash equivalents

Record cash receipts and payments
Maintain petty cash using imprest and non-imprest systems
Prepare petty cash reconciliations

Non-current assets

Record acquisition of non-current assets including capital expenditure
Calculate and record depreciation: straight-line, reducing balance
Record disposal of non-current assets

Reconciliations

Purpose of reconciliations

Explain why reconciliations are performed
Identify the types of reconciliation

Bank reconciliation

Prepare bank reconciliation statements
Identify and correct discrepancies between cash book and bank statement

Control account reconciliations

Reconcile sales ledger control account with individual receivable balances
Reconcile purchases ledger control account with individual payable balances

Trial Balance and Errors

Trial balance

Prepare an initial trial balance
Identify the purpose of a trial balance

Correction of errors

Identify errors revealed by the trial balance and errors NOT revealed by the trial balance
Prepare journal entries to correct errors
Prepare and use a suspense account

Sole Trader Financial Statements

Preparing sole trader financial statements

Prepare a sole trader statement of profit or loss
Prepare a sole trader statement of financial position
Apply period-end adjustments: accruals, prepayments, depreciation, irrecoverable debts, allowance for receivables, inventory valuation, closing inventory

Next: F2 — Management Information and Costing