Accounting Unit 4: Recording, Reporting, Budgeting and Decision-Making

Prerequisites

Unit 3 – Financial Accounting for a Trading Business.

Course Description

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. 

Areas of Study

Extension of recording and reporting

Students further develop their understanding of the recording and reporting of financial data in the General Journal and General Ledger by focussing 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 affect 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. 

Assessment

Outcomes	Assessment Tasks	Marks Allocated
	(school-assessed coursework)
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.	Structured questions or test (manual and/or ICT).	50
Prepare budgeted accounting reports and variance reports for a trading business, using financial and other relevant information, and model, analyse and discuss the effects of alternative strategies on the performance of a business.	Structured questions or test (manual and/or ICT).	50
Total Marks		100

Overall Final Assessment

Graded Assessment	Title	Assessment	Exam Duration	Contribution to Study Score (%)
1	Unit 3 Coursework	School-assessed		25
2	Unit 4 Coursework	School-assessed		25
3	Written Examination	November	2 hours	50