Unit 1: Role of accounting in business

This unit explores the establishment of a business and the role of accounting in the determination of business success or failure.  Students analyse, interpret and evaluate the performance of the business using financial and non-financial information. They use these evaluations to make recommendations regarding the suitability of a business as an investment. Students record financial data and prepare reports for service businesses owned by sole proprietors.

Areas of Study

• The role of accounting

• Recording financial data and reporting accounting information for a service business

There are two outcomes:

• Describe the resources required to establish and operate a business, and select and use accounting reports and other information to discuss the success or otherwise of the business.

• Identify, record, report and explain the financial data and information for the owner of a service business, using a combination of manual and ICT methods.

Unit 2: Accounting and decision-making for a trading business

In this unit students develop their knowledge of the accounting process for sole proprietors operating a trading business, with a focus on inventory, accounts receivable, accounts payable and non-current assets. Students use manual processes and ICT, including spreadsheets, to prepare historical and budgeted accounting reports.

Students analyse and evaluate the performance of the business relating to inventory, accounts receivable, accounts payable and non-current assets. They use relevant financial and other information to predict, budget and compare the potential effects of alternative strategies on the performance of the business. Using these evaluations, students develop and suggest to the owner strategies to improve business performance.

Areas of Study

• Accounting for inventory

• Accounting for and managing accounts receivable and accounts payable

• Accounting for and managing non-current assets

There are three outcomes:

• Record and report for inventory and discuss the effect of relevant financial and non-financial factors, and ethical considerations, on the outcome of business decisions.

• Record and report for accounts receivable and accounts payable, and analyse and discuss the effect of relevant decisions on the performance of the business including the influence of ethical considerations.

• Record and report for non-current assets and depreciation.

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 interpret reports and information presented in a variety of formats and suggest strategies to the owner to improve the performance of the business.

Areas of Study

• Recording and analysing financial data

• Preparing and interpreting accounting reports

There are two outcomes:

• 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.

• Record transactions and prepare, interpret and analyse accounting reports for a trading business.

Unit 4: Recording, reporting, budgeting and decision-making

In this unit students extend their understanding of the recording and reporting process for a trading business owned by a sole proprietor, with the inclusion of balance day adjustments and alternative depreciation methods. They investigate both the role and 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. From this evaluation, students suggest strategies to business owners to improve business performance.

Areas of Study

• Extension of recording and reporting

• Budgeting and decision-making

There are two outcomes:

• 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.

• 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.