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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
A
Accounting Principles
A1
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
A2
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
A3
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
B
Double-Entry Bookkeeping
B1
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
B2
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
C
Journal Entries and Ledger Accounts
C1
Journal entries
- Prepare journal entries for: opening entries, closing entries, correction of errors, irrecoverable debts, allowance for receivables, accruals, prepayments, depreciation, disposals
C2
Ledger accounts
- Post journal entries to ledger accounts
- Balance off ledger accounts
- Prepare control accounts: sales ledger control, purchases ledger control
D
Recording Transactions
D1
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
D2
Payroll
- Calculate staff costs including gross pay, employee deductions (tax, national insurance, pension)
- Prepare payroll journal entries
- Record employer's contributions
D3
Cash and cash equivalents
- Record cash receipts and payments
- Maintain petty cash using imprest and non-imprest systems
- Prepare petty cash reconciliations
D4
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
E
Reconciliations
E1
Purpose of reconciliations
- Explain why reconciliations are performed
- Identify the types of reconciliation
E2
Bank reconciliation
- Prepare bank reconciliation statements
- Identify and correct discrepancies between cash book and bank statement
E3
Control account reconciliations
- Reconcile sales ledger control account with individual receivable balances
- Reconcile purchases ledger control account with individual payable balances
F
Trial Balance and Errors
F1
Trial balance
- Prepare an initial trial balance
- Identify the purpose of a trial balance
F2
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
G
Sole Trader Financial Statements
G1
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