financial accounting concepts





Arab Open University

B291: TMA

SPRING 2021-2022




About TMA:

The TMA covers the financial accounting concepts and practices in the businesses. It is marked out of 100. It is intended to assess students’ understanding of some of the learning points within Books 1 to 5. This TMA requires you to apply the course concepts.


The TMA is intended to:

  • Increase the students’ knowledge about the reality of the accounting as a profession.
  • Assess students’ understanding of key learning points within Books 1 to 5.
  • Develop the ability to understand and interact with the nature of the financial statements in reality.
  • Develop students’ communication skills, such as memo writing, essay writing, analysis and presentation of material.
  • Develop basic ICT skills such as using the internet.


The TMA:

The TMA requires you to:

  • Review various study Books (from 1 to 5) of ‘Financial Accounting’ within it.
  • Conduct a simple information search using the internet.
  • Present your findings within 1,600 – 1800 words. The word count excludes headings, references, title page, and diagrams.
  • You should use a Microsoft Office Word and Times New Roman Font of 12 Font.
  • You should read and follow the instructions below carefully. Each part of the process will carry marks for the assignment.
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Part A – 30 Marks


Question 1      (15 marks)

“Financial statements show the results of the stewardship of management, or the accountability of management for the resources entrusted to it. Those users who wish to assess the stewardship or accountability of management do so in order that they can make economic decisions.”

Required: Discuss what is meant by stewardship and accountability and give an example of each.


Question 2      (15 marks)

Financial market is a place where trading of securities are facilitates and occurs. Financial markets are important for the smooth running of economies. Explain the various kinds of financial and capital markets. Also discuss the nature and role of financial markets.



Part B – 70 Marks

Case Study: Maaden

Access the Maaden home page and download the annual report of Maaden 2020 or You can directly access the annual report on the below link:

Maaden – Annual Reports  And Download Maaden Integrated Annual Report 2020. .


Use the 2020 Annual report of Maaden Company to answer the following questions:


  • Business organizations can be classified into different legal forms. List and briefly explain the different forms of business organizations. Identify under which category of business organization the Maaden falls, support your answer from the annual report of Maaden 2020.
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[Marks (Words): 10(300)]


  • The process of determining the monetary amount at which the elements of the financial statements are to be included in the balance sheet and income statement is called measurement. The IASB Framework includes the four bases of measurement. Explain these four bases of measurement with example. Identify that which measurement bases is used by Maaden in preparing their financial statements?

[Marks (Words): 10(300)]



  • IAS 16 Property, plant and equipment identifies and describes two different models of accounting for tangible non-current assets. Discuss the importance of these two models for Maaden and describe the depreciation methods used by Maaden.

[Marks (Words): 10(200)]



  • The sources of company finances may be various and complicated. Equity capital is the main source of company finances, what are the different types of share capital, explain. Also identify the different forms of share capital from annual report of Maaden 2020.


[Marks (Words): 10(200)]



  • Explain why the going concern basis is important in understanding Maaden financial statement; Support your answer with evidence from Maaden 2020 annual report.

[Marks (Words): 10(200)]



  • Balance sheet can be prepared in vertical, net asset and horizontal format. What is the difference between these formats? Which format has been adopted by Maaden and what is the underlying assumption? Provide evidence from annual report.
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[Marks (Words): 10(200)]



  • Write the summary on the financial position of Maaden company. Your summary should include the main financial data of the company.

[Marks (Words): 10(200)]






In your answer, you should explain each point or inquire separately. Use the following headings (below) to make up the different sections of your work:


Cover The PT3 form (available on LMS)
Contents Title and contents page
References  Recorded according to the Harvard style – Available on LMS
Good Luck



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