OVERVIEW
This study enables students to:
CONTENT
UNIT 1: Role of accounting in business
AREAS OF STUDY
The Role of Accounting
Individuals should consider a range of factors before committing to or continuing in a business venture. In this area of study students investigate the reasons for establishing a business and possible alternatives to operating a business. They explore types of business ownership, factors that lead to the success or failure of a business, sources of business finance and ethical considerations. They develop an understanding of the role and importance of accounting in operating a business, and consider how accounting is used to provide information for making operational and investment decisions.
Recording financial data and reporting accounting information for a service business
In this area of study students investigate the role of accounting in generating financial data and accounting information. They use the accrual method for determining profit for a service business operating as a sole proprietor with cash and credit transactions.
Students use both manual methods and ICT to record financial data and report accounting information. They apply accounting assumptions and qualitative characteristics, and use business documents and indicators to measure business performance in order to consider the success or failure of the business.
There are many indicators to measure the performance of a business. Some are financial, such as the amount of profit earned compared with investment or total sales made in a given period, while others are based on nonfinancial information, such as the speed with which invoices are paid, number of customers visiting a store in a given period, or trends in consumer preferences.
UNIT 2: Accounting and decision-making for a trading business
AREAS OF STUDY
Accounting for inventory
The strategic management of inventory is a key factor in the success or failure of a trading business. In this area of study students investigate use of both the First-In, First-Out (FIFO) and Identified Cost inventory cost assignment methods to record and report the movements of inventory through the business. Using both methods, students discuss the effect of relevant financial and non-financial factors, including ethical considerations, on the outcomes of decisions taken in relation to inventory.
Accounting for and managing accounts receivable and accounts payable
Managing accounts receivable and accounts payable successfully is essential to maintaining an adequate cash flow for a business. In this area of study students record and report transactions relating to accounts receivable and accounts payable. They examine strategies for managing credit transactions and use indicators, such as accounts receivable turnover and accounts payable turnover, to analyse decisions related to these areas. Students also take account of ethical considerations involved in managing accounts receivable and accounts payable and the effects of these on business performance.
Accounting for and managing non-current assets
In this area of study students develop an understanding of the accounting processes for non-current assets and the issues that can arise when determining a valuation for a non-current asset. Students calculate and apply depreciation using the straight-line method and undertake recording and reporting of depreciation.
UNIT 3: Financial accounting for a trading business
AREAS OF STUDY
Recording and analysing financial data
In this area of study students focus on identifying and recording financial data for a business. They use double entry accounting to record data and generate accounting information in the form of accounting reports and graphical representations. This information is used to assist the owner in making informed decisions about the operation of the business. Students should also consider strategies to improve the performance of the business, taking into account the ethical considerations relevant to the business owner.
Preparing and interpreting accounting reports
The preparation of financial reports at the end of the reporting period provides information to be used as a basis for planning and decision-making by the business owner. Students develop their understanding of the accounting processes and complete those processes that are applicable to the end of a reporting period for a trading business.
They apply the accrual method of accounting to the preparation of accounting reports and draw a distinction between cash and profit, considering the implications of these differences when using reports to make decisions.
Students undertake an analysis of accounting reports and interpret the information, taking into account relevant ethical considerations, in order to evaluate the performance of the business.
UNIT 4: Recording, reporting, budgeting and decision-making
AREAS OF STUDY
Extension of Recording and Reporting
In this area of study students further develop their understanding of the recording and reporting of financial data in the General Journal and General Ledger by focusing on balance day adjustments and the alternative methods of depreciating for non-current depreciable assets. Students prepare accounting reports using manual methods and ICT. They consider the effect of balance day adjustments on the accounting reports, and the implications of using alternative methods of depreciation on the accounting reports and on the performance of the business. They also examine ethical considerations that may effect the recording and reporting of financial data and business performance.
Budgeting and decision-making
Business owners must plan for future activities if they are to successfully manage the business. Preparing budgeted accounting reports provides the owner with information that will assist in managing and developing strategies to improve business performance. Students prepare and analyse budgeted accounting reports, both manually and using ICT, and suggest strategies to improve the performance of the business. They also discuss and evaluate the ethical considerations associated with business decision-making and business improvement.
BIBLICAL PERSPECTIVE
The study of accounting is based on the premise that people need to be accountable.
As Christians we can go one step further and highlight a very fundamental Biblical principle – that we are all ultimately accountable to God: “Nothing in all creation is hidden from God’s sight. Everything is uncovered and laid bare before the eyes of Him to whom we must give account” Hebrews 4:13
This subject develops this principle and focuses more specifically on our accountability to God in relation to money and talents. Matthew 25:14-30: Parable of the talents and Luke 16:1-13: Parable of the shrewd manager.
The course also helps encourage careful stewardship of the gifts that God has given through planning and budgeting.
ASSESSMENT
UNIT 1
Assessment tasks for this unit are selected from:
UNIT 2
Assessment tasks for this unit are selected from:
UNIT 3
|
Outcomes |
Assessment Tasks |
Marks allocated* |
|
Outcome 1 Record financial data using a double entry system; explain the role of the General Journal, General Ledger and inventory cards in the recording process; and describe, discuss and analyse various aspects of the accounting system, including ethical considerations. |
The student’s performance in each outcome will be assessed using one or more of the following:
|
60 |
|
Outcome 2 Record transactions and prepare, interpret and analyse accounting reports for a trading business. |
40 |
|
|
TOTAL MARKS |
At least 30 marks must be allocated to ICT-based assessment |
100 |
UNIT 4
|
Outcomes |
Assessment Tasks |
Marks allocated* |
|
Outcome 1 Record financial data and balance day adjustments using a double entry system, report accounting information using an accrual-based system and evaluate the effect of balance day adjustments and alternative methods of depreciation on accounting reports |
The student’s performance in each outcome will be assessed using one or more of the following:
|
50 |
|
Outcome 2 Prepare budgeted accounting reports and variance reports for a trading business using financial and other relevant information, and model, analyse and discuss the effect of alternative strategies on the performance of a business |
50 |
|
|
TOTAL MARKS |
At least 30 marks must be allocated to ICT-based assessment |
100 |
External assessment
The level of achievement for Units 3 and 4 is also assessed by an end-of-year examination, which will contribute 50 % to the study score.