UNIT 3 - Financial accounting for a trading business
This unit focuses on financial accounting for a trading business owned by a sole proprietor, and highlights the role of accounting as an information system. Students use the double entry system of recording financial data and prepare reports using the accrual basis of accounting and the perpetual method of inventory recording.
Students develop their understanding of the accounting processes for recording and reporting, and consider the effects of decisions made on the performance of the business. They interpret reports and information presented in a variety of formats and suggest strategies to the owner to improve the performance of the business.
Where appropriate, the accounting procedures developed in each area of study should incorporate the application of the Conceptual Framework, financial indicators to measure business performance, as well as the ethical considerations, including financial, social and environmental considerations, faced by business owners when making business decisions.
Learning Activities:
Case studies, practical exercises, text questions, ICT activities and other relevant tasks.
Key Skills Achieved:
Use correct accounting terminology; explain and apply relevant qualitative characteristics and accounting assumptions; apply theoretical knowledge to simulated situations; identify and manually record financial data in the General Journal, General Ledger and inventory cards; use ICT to record financial data in the General Journal, General Ledger and inventory cards and to construct graphical representations; distinguish between current and non-current assets, and current and non-current liabilities; explain the purpose of a Trial Balance; explain and apply appropriate internal control procedures; analyse the effects of financial transactions on the accounting equation; distinguish between product and period costs in relation to inventory valuation; use ICT, including spreadsheets, to model and analyse the effects of alternative inventory valuation methods and cost assignment methods; evaluate the effects of alternative inventory valuation methods and cost assignment methods on the accounting equation; model and analyse the financial effects of alternative strategies to improve business performance; discuss strategies to improve the management of inventory, accounts receivable and accounts payable; discuss ethical considerations involved in decisions made by owners of trading businesses.
Assessment:
Case studies/tests, ICT tasks and an end of unit written examination.
UNIT 4 - Recording, reporting, budgeting and decision-making
In this unit, students further develop their understanding of accounting for a trading business owned by a sole proprietor and the role of accounting as an information system. Students use the double entry system of recording financial data and prepare reports using the accrual basis of accounting and the perpetual method of inventory recording. Both manual methods and ICT are used to record and report.
Students extend their understanding of the recording and reporting processes, with the inclusion of balance day adjustments and alternative depreciation methods. They investigate both the role and the importance of budgeting in decision-making for a business. They analyse and interpret accounting reports and graphical representations to evaluate the performance of a business. Using this evaluation, students suggest strategies to business owners to improve business performance.
Where appropriate, the accounting procedures developed in each area of study should incorporate application of the Conceptual Framework and financial indicators to measure business performance, as well as the ethical considerations, including financial, social and environmental considerations, faced by business owners when making business decisions.
Learning Activities:
Case studies, practical exercises, text questions, ICT activities and other relevant tasks.
Key Skills Achieved:
Use correct accounting terminology; explain and apply relevant qualitative characteristics and accounting assumptions; apply theoretical knowledge to simulated situations; identify and manually record financial data in the General Journal, General Ledger and inventory cards; use ICT to record financial data in the General Journal, General Ledger and inventory cards and to construct graphical representations; distinguish between current and non-current assets, and current and non-current liabilities; explain the purpose of a Trial Balance; explain and apply appropriate internal control procedures; analyse the effect of financial transactions on the accounting equation; distinguish between product and period costs in relation to inventory valuation; use ICT, including spreadsheets, to model and analyse the effect of alternative inventory valuation methods and cost assignment methods; use ICT, including spreadsheets, to record transactions in the General Journal and the General Ledger and prepare accounting reports; construct appropriate graphical representations to assist with the analysis of classified accounting reports and other information to evaluate the performance of a business; analyse the effect of financial transactions on the accounting reports; distinguish between cash and profit; discuss ethical considerations in relation to the recording and reporting of accounting information.
Assessment:
Case studies/tests, ICT tasks and an end of unit written examination.
VCAA ASSESSMENT - THE OVERALL STUDY SCORE WILL CONSIST OF:
Prerequisites:
N/A
Recommendations:
It is recommended that the student have satisfactory completion of Unit 1 and 2 Accounting.
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