TEACHING AND LEARNING GUIDE - tqa.tas.gov.au · 5 Current Issues in ... Example tasks for Valuation...

T A S M A N I A N Accounting C E R T I F I C A T E Senior Secondary TCE 5C O F E D U C A T I O N

Tasmanian Qualifications Authority Publishing date: April 18, 2008 Version 3.b

T E A C H I N G A N D L E A R N I N G G U I D E

The Teaching and Learning Guide must be read in conjunction with the syllabus document. It contains advice to assist teachers delivering the syllabus and can be modified as required.

Accounting 2


TEACHING AND LEARNING GUIDE TABLE OF CONTENTS

SENIOR SECONDARY 5C

EXPANDED SYLLABUS OUTLINE......................................................................................................................................3 Designed to provide ideas and information associated with syllabus content.

APPENDICES ........................................................................................................................................................................8

EXPLANATION OF CRITERIA ...........................................................................................................................................22

ASSESSMENT INFORMATION .........................................................................................................................................23 This may include details of work expectations and external assessment requirements.

TEXT LISTS .........................................................................................................................................................................23 Includes prescribed and suggested text lists.

REFERENCES AND RESOURCES...................................................................................................................................23 Useful resources for teachers and students.

Accounting 3


EXPANDED SYLLABUS OUTLINE Accounting is becoming an increasingly computerised discipline; especially the process of recording and preparing financial information. It is important that students are familiar with a current accounting software programme (such as QuickBooks or MYOB) and the use of technology tools (such as spreadsheets) are to be encouraged throughout the teaching of the course.

Through the study of this course students will develop

• knowledge and understanding of financial terms, concepts and ideas

• skills in recording, reporting, analysing and interpreting financial information

• the ability to make decisions based on financial information

• an awareness of the need for financial information systems in business organisations

• an ability to undertake, plan and conduct tasks with self confidence, both individually and as a member of a group

The FIVE UNITS of study are

1 Recording Financial Information

2 Reporting

3 Controls

4 Decision Making

5 Current Issues in Accounting

The course allows time for teachers to extend topics using technology as appropriate and to explore current issues in accounting. The focus of Units 1 & 2 is on a sole trader engaged in trading activities. However, other forms of business ownership may also be explored (but not externally assessed) in Units 3, 4 & 5.

The recommended number of teaching hours is indicated for each Unit.

Chapters/pages of the textbook (Kirkwood L, Ryan C, Falt J & Stanley T (2007), Accounting: An introductory framework, 3rd edn, Pearson Education Australia, Melbourne) relevant to each Unit section are noted below.

UNIT 1: RECORDING FINANCIAL INFORMATION (25 HOURS)

1. Nature and Purpose of Accounting

nature and functions of accounting

explain the main accounting assumptions or principles (ie accounting entity, monetary, historical cost, going concern, accounting period, revenue recognition and realisation, and matching principle)

describe the qualitative characteristics of financial information (ie relevance, reliability, materiality, comparability, understandability)

understanding of the main forms of business ownership (ie sole trader, partnerships, companies, non-profit organizations, public sector organisations, trusts (detailed definitions not externally assessed))

identify information needs of both internal and external users of accounting information

Chapter 1, Chapter 4 pp.105-106, Chapter 12 pp.433-434 & 482-483

Accounting 4


2. Overview of the Accounting Process

explain the accounting equation

define the terms assets, liabilities, owner’s equity, revenue and expenses

state how a variety of transactions affect the equation. For example

o investment of assets in a business by the owner

o drawings of assets from the business by the owner

o credit purchase and sale of an asset

o borrowing of cash

o repayment of a loan

know and apply the basic rules of double-entry recording for accounts using either T or columnar accounts (but only T accounts will be externally assessed) and explain the purpose of a chart of accounts. Pencilling balances allowed (refer Appendix 1: Informal (Pencil) Balances. Students are free to choose between formal and informal balancing in external assessment).

explain the purpose and limitations of preparing a trial balance

Chapter 2

3. Recording Process (including GST)

explain the importance of source documents in the accounting process

understand the accounting process or cycle, ie original documents ! journals (if used or relevant section of an accounting package) ! ledgers ! financial reports ! decision making

nature of the GST, explain the effect of GST on the supply chain, ABN, tax invoice

record cash and credit transactions, including those involving GST and perpetual inventories in the General Journal

post journal entries to the T accounts in the general ledger and prepare a trial balance

returns to be included as items in the financial statements but journal entries for recording these are not required

Chapter 3 pp.65-74, 76, 80-103

UNIT 2: REPORTING (30 HOURS)

1. Preparation of Accounting Reports

explain why the accrual method means various balance-day adjustments are necessary at balance date due to the accounting period assumption, going concern assumption, and the matching principle

explain why profit cannot be measured exactly, due to estimates involved in some balance day adjustments

prepare adjusting General Journal entries and ledger entries for these balance day adjustments

o prepaid expenses

o stocks of supplies/stationery

o unearned revenue

o accrued expense

o accrued revenue

o bad and doubtful debts (simplified method only) – (refer Appendix 5: Bad and Doubtful Debts (Simplified Method))

o depreciation and amortisation

o stock loss

o GST clearing

Accounting 5


explain the need to close off all revenue and expense accounts, and balance all assets, liability and owner’s equity accounts at the end of an accounting period (General Ledger closing entries, trading, and profit and loss accounts are not required)

prepare properly classified Income Statements and Balance Sheets incorporating these adjustments (refer Appendix 2 A & B: Income Statement and Balance Sheet Pro-formas)

explain the purpose of, and prepare, reversing entries in the General Journal and the General Ledger where relevant (ledger entries not externally assessed)

Chapter 4 pp.104-112, 121, & 123-148, & Chapter 12

2. Cash Flow Statement

explain the purpose of preparing a cash flow statement

define these terms - cash flows, operating activities, investing activities, financing activities

state the difference between and give examples of cash inflows and outflows from operating activities

state the difference between and give examples of cash inflows and outflows from investing activities

state the difference between and give examples of cash inflows and outflows from financing activities

prepare simple cash flow statements for the sole trader form of organisation who has no credit purchases or sales (preparation of cash flow statements not externally assessed) (refer Appendix 3: Cash Flow Statement Pro-forma)

interpretation only of cash flow statements in terms of

o operating activities – where cash is obtained and where it is used

o investing activities – where major investments in assets have been made or realised

o financing activities – how investments have been financed

o the change in the cash position

o the cash position at the end of the period

Chapter 13 pp.492-504, & Chapter 14, pp.573-577

UNIT 3: CONTROLS (35 HOURS)

1. Describe the principles of good internal control

Chapter 10 pp.362-364

2. Controls over Cash Transactions

explain the importance of cash to a business

describe the methods of internal control over cash and the importance of cash control

explain why a business's bank ledger account balance and the bank's balance (as per the bank statement) may differ

make the appropriate adjustments to business records as a part of the bank reconciliation process

prepare a bank reconciliation statement including previous statements

explain the purpose of a cash budget and its role in control

prepare and present a cash budget, including a schedule of estimated cash collections from accounts receivable (refer Appendix 4 A & B: Schedule of Collections from Account Receivable Pro-forma and Cash Budget Pro-forma)

interpret a cash budget and analyse the impact on a business enterprise of events described in it

explain how businesses may improve their cash flow situation

Accounting 6


list the main sources of finance available to business enterprises

explain the factors to be considered in seeking external finance

Chapter 2 p.23, Chapter 6 pp.212-233, Chapter 10 pp.365-370, Chapter 14 pp.573-574, & Chapter 16 pp.634-647 &pp.652-655

3. Controls over Credit Transactions

describe the methods of control over accounts receivable and accounts payable, such as separation of duties, credit policies

prepare balance day adjustments in the General Journal for bad and doubtful debts (simplified method only) for inclusion in financial statements (not externally assessed as a separate examination question) (refer Appendix 5: Bad and Doubtful Debts (Simplified Method))

Chapter 7 pp.242-243 & Chapter 10 pp.373-377

4. Controls Over Inventories

define the term inventories and explain their importance to a business

explain the significance of a stock-take at the end of the accounting period

explain the methods of control over the purchase, sale and storage of inventories

explain the perpetual system of accounting for inventories including use of stockcards (theory only)

assess the merits and weaknesses of the perpetual system of accounting for inventories

make the necessary journal and ledger adjustments for inventory loss (shortage) or gain

explain and use the lower of cost and net realisable value rule to value inventory

show the adjusting entry when the lower of cost and net realisable value rule is used (refer Appendix 6 A & B: Valuation of Inventories for Reporting and Example tasks for Valuation of Inventories)

Chapter 8 pp.291-294, 298-299, 304, & 317-319, & Chapter 10 pp.382-386

5. Controls over Non-current Assets

distinguish between capital and revenue expenditure

define the terms non-current assets and depreciation

understand the importance of the property, plant and equipment register

calculate depreciation using straight line and diminishing balance methods

record depreciation as a balance day adjustment in the general journal and post to the general ledger

explain the impact of depreciation on profitability and its relationship with the matching principle

explain the concepts of original cost, scrap or residual value, useful life, accumulated depreciation and written down value (net asset value or carrying value)

recognise that depreciation does not set aside funds for replacement

calculate the gain or loss on the disposal of non-current assets (refer Appendix 7: Disposal of Non-Current Assets (Simplified Method)

define and explain amortisation (as found in published financial statements and using same treatment as for depreciation)

Chapter 9 pp.324-336, 343, & 351-353, & Chapter 10, pp.391-393

Accounting 7


UNIT 4: DECISION MAKING (25 hours)*

1. Users Of Accounting Information and Decision Making

list the major users of accounting information, the decisions they would make and the information they require

discuss the limitations of the income statement and the balance sheet

Chapter 1 pp.6-10, & Chapter 14 pp.542-550

2. Analysis and Interpretation of Income Statements and Balance Sheets

state the reasons why analysis and interpretation may be necessary

explain and calculate each of the financial ratios listed in Appendix 8: Formulae Sheet ie profitability, financial stability and management effectiveness

analyse and interpret the results of the business and make recommendations to owners

list and explain the major limitations to the analysis and interpretation of accounting reports

Chapter 14 pp.550-572

* See also the special part of the References and Resources section of this document relating to this Unit.

UNIT 5: CURRENT ISSUES IN ACCOUNTING (35 HOURS)

This is a compulsory unit where teachers are required to integrate current issues in accounting throughout the course. It is not intended that this topic will be taught in isolation.

The topics may be teacher or student led.

The aims are to investigate issues in depth (as they arise) and to develop research skills.

Suggested issues include:

o Inquiry into a business

o Business Successes and Failures

o Moral and ethical considerations of accounting

o Forensic Accounting

o Personal Investing

o E commerce

o Auditing

o Frauds and Scams

Accounting 8


APPENDIX 1: INFORMAL (PENCIL) BALANCES

a) Example of a formal balancing of an account

Inventories No 3106

Dec 1 Balance b/d 20 000 Dec 2 Cost of Goods Sold 750 6 Cash 1 000 4 Cost of Goods Sold 1 550 12 D Austin 400 19 D Austin 100 24 Drawings 250 31 Balance c/d 18 750 $21 400 $21 400 Jan 1 Balance b/d 18 750

b) Example of an informal or pencil balance

Inventories No 3106

Dec 1 Balance b/d 20 000 Dec 2 Cost of Goods Sold 750 6 Cash 1 000 4 Cost of Goods Sold 1 550 12 D Austin 400 19 D Austin 100 24 Drawings 250

Accounting 9


APPENDIX 2.A: INCOME STATEMENT PRO-FORMA

_______________________________________ _______________________________________ _______________________________________ $ $ $

Sales .......................................................................... .......................................................................... Less Cost of Goods Sold .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... Gross Profit Add Other Revenue .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... Less Other Expenses

Selling and Distribution Expenses .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... ..........................................................................

General and Administrative Expenses .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... ..........................................................................

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Accounting 10


Finance Expenses .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... Net Profit

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Accounting 11


APPENDIX 2.B: BALANCE SHEET PRO-FORMA

_______________________________________ _______________________________________ _______________________________________ $ $ $ $

ASSETS Current Assets .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... Add Non-Current Assets Other Financial Assets .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... Property, Plant and Equipment .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... Intangibles .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... Less LIABILITIES Current Liabilities .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... ..........................................................................

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Accounting 12


Non-Current Liabilities .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... NET ASSETS OWNER’S EQUITY .......................................................................... .......................................................................... .......................................................................... .......................................................................... .......................................................................... ..........................................................................

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Accounting 13


APPENDIX 3: CASH FLOW STATEMENT PRO-FORMA

Cash Flow Statement for the year ended ……………..

$ $ $

Cash Flows from Operating Activities

Inflows

Outflows

Net Cash provided by Operating Activities

Cash Flows from Investing Activities

Inflows

Outflows

Net Cash provided by Investing Activities

Cash Flows from Financing Activities

Inflows

Outflows

Net Cash provided by Financing Activities

Net Increase (Decrease) in Cash Held

Cash at the beginning of reporting period

Cash at the end of reporting period

Accounting 14


APPENDIX 4.A: SCHEDULE OF COLLECTIONS FROM ACCOUNTS RECEIVABLE PRO-FORMA

Statement of Estimated Receipts from Accounts Receivable

Total Estimated Cash to be received in:

Credit sales in: ($) ($) ($) ($)

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Any other working:

Accounting 15


APPENDIX 4.B: CASH BUDGET PRO-FORMA

…………………………………… Cash Budget for the three months ending ………………………………………………………….

($) ($) ($)

Estimated Cash Receipts .................................................................. .................................................................. ..................................................................

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Total Estimated Receipts

Estimated Cash Payments

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Total Estimated Payments

Bank Balance at Start............................ Excess Receipts over Payments .......... Excess Payments over Receipts ..........

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Bank Balance at end

Accounting 16


APPENDIX 5: BAD AND DOUBTFUL DEBTS (SIMPLIFIED METHOD) (Adapted from Chapter 7 of Kirkwood L, Ryan C, Falt J & Stanley T (2003), Accounting: An introductory framework, 2nd edn, Pearson Education Australia, Melbourne).

WRITING OFF BAD DEBTS

Dr Cr

Bad Debts XX

GST Collected XX

Accounts Receivable XX

(Debt Written off as Bad)

DECREASING THE PROVISION

Trial Balance as at 30 June 20XX (before balance day adjustment)

Dr Cr

Bad Debts 130 000

Provision For Doubtful Debts 15 000

Additional information requires the provision to be $10 750. Simply create the journal entry to make the Provision for Doubtful Debts $10 750.

Dr Cr


Bad Debts 4 250

(Provision for doubtful debts to $10 750)

Trial Balance as at 30 June 20XX (after balance day adjustment)

Dr Cr

Bad Debts 125 750


Accounting 17


INCREASING THE PROVISION

Trial Balance as at 30 June 20XX (before balance day adjustment)

Dr Cr

Bad Debts 10 000


Additional information requires the provision to be $16 000. Simply create the journal entry to make the Provision for Doubtful Debts $16 000.

Dr Cr

Bad Debts 1 000


(Provision for doubtful debts to $16 000)

Trial Balance as at 30 June 20XX (after balance day adjustment)

Dr Cr

Bad Debts 11 000


Accounting 18


APPENDIX 6.A: VALUATION OF INVENTORIES FOR REPORTING

(Adapted from pp.317-319 of Kirkwood L, Ryan C, Falt J & Stanley T (2003), Accounting: An introductory framework, 2nd edn, Pearson Education Australia, Melbourne).

Inventories are generally valued at historical cost. However, sometimes the net realisable value may be lower than the cost. This may be due to deterioration, obsolescence or a change in demand. Net realisable value is the amount the business could sell the item for, less any marketing, distribution or selling expenses. Cost can be ascertained by FIFO, weighted average or standard cost. A business will decide on a method and then apply it consistently. In valuing inventories, we apply the “lower of cost or net realisable value” rule. The accountant should

• determine the cost of the inventory • determine the net realisable value of the inventory • use the lower value

For example: The table below shows the cost of inventory per item, the net realisable value of that inventory item and the value that will be used when determining the final value for inventories. That is, it enables comparison of the cost and net realisable value of each item to be made and the lowest value chosen.

Item No

Cost Net Realisable Value Lower of Cost and Net Realisable Value

$ $ $ 1 400 300 300 2 600 500 500 3 100 200 100 1 100 1 000 900

The cost value of $1 100 is the value of inventories currently in the ledger. This needs to be adjusted to reflect the lower of cost or net realisable value rule which, when applied individually to each inventory item, values the total of inventories at $900. The difference between the two values is actually an anticipated loss of $200. If a loss is anticipated, even though at this stage it is unrealized, then account must be taken of this. The general journal entry to account for the anticipated loss is a balance day adjustment: June 30 Anticipated Loss on Sale 200 Inventories Control 200 (Adjusting entry for lower

of cost or net realizable value) Where the net realisable value of the inventories is higher than the cost, this represents an unrealised gain. This would not be taken into account because an anticipated gain is considered to be too subjective.

Accounting 19


APPENDIX 6.B: EXAMPLE TASKS FOR VALUATION OF INVENTORIES

Consolidation activities could include: 1 Show the adjusting general journal entry if one is needed:

Item of Inventory

Quantity Cost/Unit NRV/Unit Total Cost Total NRV Reported Value

$ $ $ $ $ $ A1 1 000 8.00 9.25 B2 600 8.60 8.00 C3 525 5.00 4.89 D4 862 10.00 8.00 E5 1 500 13.25 16.00

2 Task 8.22 (text page 318).

3 Task 8.23 (text page 318).

4 Task 8.24 (text page 318), showing the adjusting general journal entry if one is needed.

5 Task 8.25 (text page 318), showing the adjusting general journal entry if one is needed.

6 Task 8.26 (text page 319) – computer application.

7 The following past exam question:

Taranna Traders conducts a stocktake on 30 June 1999 and it is determined that the following items of inventory are on hand:

Inventory Item Quantity Cost per Unit ($) Net Realisable Value per Unit ($)

K1 900 9.00 10.35 L2 500 9.70 8.00 M3 300 6.00 4.90 N4 800 11.00 9.00 O5 1 200 14.35 15.00

You are required to:

(i) Calculate the figure for inventories that should be included in the financial accounts of Taranna Traders for the year ended 30 June 1999 if conservative accounting principles are followed. Show full workings.

(10 marks) (ii) Prepare the entry in the General Journal of Taranna Traders to record any anticipated loss on sale of

inventories. A narration is not required. (2 marks) (iii) Assume that Inventory Item N4 could be altered at an additional cost of $4 per unit and then would be

able to be sold for $14 per unit. Should N4 be altered prior to selling? Give one valid reason. (4 marks)

Accounting 20


APPENDIX 7: DISPOSAL OF NON-CURRENT ASSETS

(SIMPLIFIED METHOD)

Students simply need to know how to calculate a gain or a loss on disposal based on information given in additional information and how to classify the gain as revenue and the loss as an expense in the statements.

Do not use Disposal or Gain and Loss on Disposal accounts. Journal entries will not be required.

Written Down Value (book value) = Cost – Accumulated Depreciation

THEREFORE:

Gain or Loss on Disposal = Sale Price (or Trade In) - Written Down Value (book value)

PRACTICAL EXAMPLE

Equipment cost $600

Accumulated Depreciation $200

Price received on the sale of the equipment was $300

∴ WDV = $600- $200 = $400

∴ Gain (or Loss) on Disposal = $300 - $400 = ($100)

Accounting 21


APPENDIX 8: FORMULAE SHEET

Analysis & interpretation formulae

Measures of earning capacity or profitability

Gross Profit Ratio = Gross Profit x 100 Net Sales Net Profit Ratio = Net Profit x 100 Net Sales Rate of Return on Owner’s Equity = Net Profit x 100 Average Owner’s Equity Rate of Return on Total Assets = Net Profit + Interest Expense x 100

Average Total Assets

Expenses to Sales Ratio = Expense x 100 Net Sales

Measures of financial stability

Current (or Working Capital) Ratio = Current Assets Current Liabilities Quick Asset (or Acid Test) Ratio = Cash Assets + Receivables Current Liabilities Equity Ratio = Owners Equity x 100 Total Assets Debt Ratio = Total Liabilities x 100 Total Assets

Measures of management effectiveness

Turnover of Accounts Receivable = Net Credit Sales Average Accounts Receivable Turnover of Inventories = Cost of Goods Sold Average Inventories Depreciation formulae Diminishing Balance Method = Rate of Depreciation x (Original Cost - Accumulated Depreciation) Straight Line Method = Original Cost - Estimated Residual Value Estimated Life

Accounting 22


EXPLANATION OF CRITERIA

CRITERION 1 COLLECT AND CATEGORISE INFORMATION This TCE generic criterion focuses on the development of students’ investigative skills. Students will gather relevant information from different sources, examine the information and organise it into different categories.

CRITERION 2 COMMUNICATE IDEAS AND INFORMATION This TCE generic criterion focuses on the development of students’ ability to communicate effectively in spoken and written forms.

CRITERION 3 PLAN, ORGANISE AND COMPLETE ACTIVITIES This TCE generic criterion focuses on the development of students’ ability to plan, organise, complete and reflect upon activities. Students will be expected to plan and set goals, design effectiveness of their planning procedures.

CRITERION 4 WORK CONSTRUCTIVELY WITH OTHERS This TCE generic criterion focuses on the development of students’ ability to work collaboratively and constructively in a range of structured and unstructured situations.

CRITERION 5 APPLY AND UNDERSTAND PRINCIPLES OF DOUBLE ENTRY ACCOUNTING IN THE RECORDING OF FINANCIAL TRANSACTIONS

This syllabus-specific criterion focuses on the development of students’ ability to apply and understand the principles of double-entry accounting to records of financial transactions.

CRITERION 6 DEMONSTRATE KNOWLEDGE AND UNDERSTANDING OF FINANCIAL TERMS, CONCEPTS AND IDEAS

This syllabus-specific criterion focuses on the development of students’ ability to demonstrate understanding of financial terms, concepts and ideas.

CRITERION 7 APPLY AND UNDERSTAND THE USE OF ACCOUNTING CONTROL TECHNIQUES This syllabus-specific criterion focuses on the development of students’ ability to understand and describe the principles of good internal controls as they apply to cash, credit, inventories and non-current assets.

CRITERION 8 ANALYSE AND EVALUATE FINANCIAL DATA, ISSUES AND INFORMATION This criterion is based on a SOSE generic criterion that focuses on students being able to organise and structure information based around an issue. Students should also compare, discriminate between and assess the value of ideas, data and evidence. The kind of data involved in the study of this syllabus (ie financial) has been clarified in the wording of the criterion and syllabus-specific descriptors have been added to the SOSE generic descriptors.

CRITERION 9 APPLY KNOWLEDGE AND DEMONSTRATE UNDERSTANDING OF CURRENT ISSUES IN ACCOUNTING

This syllabus-specific criterion focuses on the development of students’ knowledge and understanding of accounting concepts and ideas in an applied context. This could include appropriate learning experience involving case studies, simulations, real world applications, investigations into topical issues, and the use of computer accounting software.

CRITERION 10 APPLY ACCRUAL ACCOUNTING TECHNIQUES TO PREPARE CORRECTLY PRESENTED ACCOUNTING REPORTS

This syllabus-specific criterion focuses on the development of students’ ability to prepare end of period reports and to understand why, under the accrual method of accounting, various adjustments are necessary.

Accounting 23


ASSESSMENT INFORMATION

Standard Marking guide for a Income Statement (worth 30 marks) and a Balance Sheet (worth 20 marks).

Item Incorrect Deduction Income Statement Item omitted completely 3 Balance Sheet item included 3 Adjustment ignored 3 Expense item recorded as Revenue (or visa versa) 2 Adjustment attempted but incorrect figure 2 Wrong expense or revenue classification 1 Additional information ignored 2 Mathematical errors 1 Sub-totals missing 1 Incorrect columns 1 Incorrect figure transferred from Trial Balance 1 Incorrect heading 1 Heading omitted 1 Balance Sheet Item omitted completely 3 Income Statement item included 3 Adjustment ignored 3 GST Accounts not cleared 3 Asset recorded as Liability (or visa versa) 2 Adjustment attempted but incorrect 2 Wrong asset or liability classification 1 Mathematical errors 1 Sub-totals missing 1 Less Drawings before Add Net Profit 1 Incorrect columns 1 Incorrect figure transferred from Trial Balance 1 Incorrect heading 1 Heading omitted 1

RECOMMENDED TEXT

The recommended text is Kirkwood L, Ryan C, Falt J, & Stanley T (2007), Accounting: An introductory framework, 3rd ed, Pearson Education Australia, Melbourne.

REFERENCES AND RESOURCES Teachers are encouraged to use a variety of approaches, sources and exercises but components of theory and methods of presentation required for the external examination are based on the recommended text.

http://pearsoned.com.au/schools/secondary

Compak, The journal of the Victorian Commercial Teachers Association

http://www.vcta.asn.au/html/Compak/compak_welcome

http://www.quicken.com.au

Accounting 24


RESOURCES FOR UNIT 4 (FREE FINANCIAL SUMMARIES)

Industry Benchmarks: These can be obtained from

http://www.anz.com/australia/business/calculator/businessbenchmark/home.asp

A variety of industries can be selected – most of the ratios used in TCE Accounting are included.

Five to Ten Year Financial Summaries Re: Public Companies: Some companies present at least a five year summary, including some key ratios, in an easily located position.

Examples

www.santos.com.au

Go to: Investor Centre then, on the RHS, a 10 year Financial Summary can be accessed.

www.wesfarmers.com.au

Go to: Shareholders & Investors then a 5 year Financial Summary can be accessed.

www.tabcorp.com.au

Go to: Investor Centre then, on the LHS, Financial Summary. A 5 year Financial Summary can be accessed.

Most public companies have web sites that include financial reports. Finding a five to ten year summary involves an examination of the index of the annual report. For example, a five year annual summary for Woolworths can be found as follows:

www.woolworthslimited.com.au

Locate the 2006 annual report and go to page 68.

TEACHING AND LEARNING GUIDE - tqa.tas.gov.au · 5 Current Issues in ... Example tasks for Valuation...

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