University of Warwick - Foundations of Accounting (IB133)

This module, IB133: Foundations of Accounting provides a comprehensive introduction to financial and management accounting, focusing on its use as a managerial and decision-making tool rather than as a specialist discipline. You will explore fundamental topics such as financial statements, including the Income Statement, Statement of Financial Position, and Cash Flow Statement, gaining an understanding of how these reports interconnect to reflect a business's financial performance and position. The module covers essential concepts like revenue and expense recognition, cost classification, and depreciation while introducing key techniques such as cost-volume-profit analysis, total absorption costing, and activity-based costing. Additionally, you will learn the importance of cash flow, the differences between cash and profit, and the preparation of basic financial statements, alongside the principles and practices of budgeting, variance analysis, and using budgets for strategic control.

Through the module, students will develop the ability to interpret financial statements, calculate and analyse key financial ratios, and evaluate a firm’s performance over time or against industry benchmarks. Emphasis is placed on understanding the limitations of accounting information and how these constraints impact decision-making and performance analysis. By the end of the module, students will not only be able to prepare basic financial reports but also effectively use accounting tools for planning, control, and performance appraisal. This includes communicating insights and recommendations clearly to a broad range of stakeholders using appropriate financial terminology, enabling informed decision-making and strategic management.