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Fundamentals of accounting

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This module provides a broad introduction to accounting study at university level. It covers the fundamentals of financial and management accounting as well as the essential skills, knowledge and ethics required to be a professional accountant. The module will also be suitable if you are in a general management position as the accounting material covers measuring management performance and improving financial planning, control and decision-making. You'll gain an understanding of financial reports through their preparation, based on the double-entry bookkeeping system, which is essential for the management of any organisation. 

What you will study

Proper accounting is crucial for the prosperity and survival of any organisation. Our complex economic system depends on accurate, trustworthy and relevant financial records and reports. While this module focuses on the accounting required for a sole trader, the skills and knowledge you'll learn are of central importance for accounting, and managing in any organisation, whether for-profit, not-for-profit or governmental.

Unit 1: Introduction to accounting
This unit introduces the scope and structure of the module and the purpose of bookkeeping and accounting, as well as the skills, knowledge and ethics required for accounting.
Unit 2: Essentials of double-entry bookkeeping
This unit introduces the key principles of the double-entry bookkeeping system, which is based on the accounting equation.
Unit 3: Accruals accounting explored
Unit 3 develops an understanding of recording a wide range of transactions through ledger accounts.
Unit 4: Control over the ledgers  
This unit introduces the books of original entry that underpin ledger accounts as well as the different ways that ledger accounts are monitored, controlled and corrected.
Unit 5: Preparing financial statements
This unit revisits end-of-period adjustments and how they are used to prepare financial statements. It also explains how to derive useful information from incomplete records, and how to prepare manufacturing accounts.
Unit 6: Essentials of cost and management accounting  
Unit 6 provides an introduction to the basic concepts and principles of management accounting, including cost analysis, accounting control systems and cost bookkeeping. This unit also covers the differences between manual and computerised accounting systems.
Unit 7: Management accounting applications
This unit considers some important management accounting applications, applying the concepts and principles of management accounting introduced in Unit 6.
Unit 8: Preparing for the exam
Unit 8 is designed to help you revise the module teaching materials and prepare for the end-of-module examination

You will learn

You will learn the fundamental concepts and techniques of financial and management accounting as well as a range of relevant skills. These include double-entry bookkeeping, advanced numeracy, reading and analysing relevant case studies, using information and communication technologies, preparing appropriate reports and using and manipulating spreadsheets.

Professional recognition

This module is designed to offer, on completion, immediate professional recognition by the International Association of Bookkeepers (IAB). This accreditation will enable you to gain exemption from both their Level 2 Certificate in Bookkeeping and Level 3 Diploma in Accounting and Advanced Bookkeeping. On successful completion you will be able to apply to become a Member of the IAB. Conditions of accreditation and membership with the IAB, including any annual fees and the requirement for referees, will need to be confirmed directly with the IAB.

Entry requirements

There are no formal entry requirements for this module. What is required is a commitment to developing already existing basic skills in numeracy and literacy. You are also expected to have a basic level of computer literacy and a broad interest in business and management.

If you have any doubt about the suitability of the module, please speak to an adviser.

What's included

This module consists of eight units of study which includes online activities and resources and printed books. 

You will need

A non-programmable calculator. Spreadsheet software is useful but not essential.

Computing requirements

A computing device with a browser and broadband internet access is required for this module. Any modern browser will be suitable for most computer activities. Functionality may be limited on mobile devices.

Any additional software will be provided, or is generally freely available. However, some activities may have more specific requirements. For this reason, you will need to be able to install and run additional software on a device that meets the requirements below.

A desktop or laptop computer with either:

  • Windows 7 or higher
  • Mac OS X 10.7 or higher

The screen of the device must have a resolution of at least 1024 pixels horizontally and 768 pixels vertically.

To join in the spoken conversation in our online rooms we recommend a headset (headphones or earphones with an integrated microphone).

Our Skills for OU study website has further information including computing skills for study, computer security, acquiring a computer and Microsoft software offers for students.

Teaching and assessment

Support from your tutor

While you study this module you will be supported by your tutor in face to face and online tutorials. Your tutor will facilitate online discussions with your fellow students in your tutor group forum and will be available for individual queries and help if you need it. Your tutor will also mark your tutor marked assignments and give you feedback on your progress.


The assessment details for this module can be found in the facts box above.

You must use the online eTMA system to submit your tutor-marked assignments (TMAs).

If you have a disability

The OU strives to make all aspects of study accessible to everyone and this Accessibility Statement outlines what studying B124 involves. You should use this information to inform your study preparations and any discussions with us about how we can meet your needs.

Future availability

Fundamentals of accounting starts once a year – in October. This page describes the module that will start in October 2019. We expect it to start for the last time in October 2023.

Course work includes:

3 Tutor-marked assignments (TMAs)
No residential school