Accounting, Unit 2

Area of Study 1: Recording financial data and reporting accounting information

Outcome: On completion of this unit the student should be able to record financial data and report accounting information
for a sole trader.
Key knowledge
Key Skills
1. applicable accounting principles and qualitative
1. use correct accounting terminology
2. explain the differences between service and trading
characteristics of accounting information
businesses
2. service and trading businesses
3.
identify, classify and record financial data
3. price setting strategies:
4. explain and apply the principles underlying the recording
methods of determining selling price
of financial data and preparation of accounting
cost, volume, profit analysis
information
4. source and business documents for a trading business:
5. apply theoretical knowledge to simulated situations
cash receipts, cheque butts, sales and purchases
6. prepare and analyse financial reports
invoices, bank statements, memos, statements of
7. interpret accounting information from written reports and
account
graphical representations.
5. special journals: cash receipts, cash payments,
purchases and sales
6. individual debtors and creditors records
7. perpetual inventory system recording on stock cards
using the First In, First Out (FIFO) method
8. physical stocktakes and their impact on accounting
records and reports, including stock losses and gains
9. balance day adjustments:
depreciation using the straight-line method
stock loss and gain
prepaid expenses using the asset approach
accrued expenses
10.accounting reports:
Cash Flow Statement
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 Income Statement
Balance Sheet
11.graphical representations of accounting information
12.the distinction between cash and profit
13.the two-fold effect of transactions on the accounting
reports.
Lesson

Activity

Resource

Using Case studies students will draw comparisons between

service business and trade business. Upon completion,
students will be able to identify the type of transactions that
these businesses will undertake. As an introduction to this
terminology, a case study and discussion will allow students
to grasp the base concepts of the unit, allowing this
knowledge to be furthered in consequent lessons.

Case studies
Comparisons
between a service
and trade business
and their financial
reports

Students will be introduced to pricing methods. These

methods will form the basis of the business and reports and
therefore should be understood in depth. Students should
develop a list of pricing methods and evaluate these
strategies.
Students will complete a group discussion and presentation
activity on company stock and the issues concerning it.
Students will watch a YouTube clip about the London Zoo
performing a physical stocktake. Using the information
students will make a Mind Map in groups of 4, listing the
impacts of a stocktake on a business drawing inspiration from
the clip and relating that to trade business; listing different
effects that a stocktake would have on the business.

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Key
Knowledge
1,2,4

Key Skills

Textbook

1, 3, 4

1, 3, 4, 6

http://www.youtube.
com/watch?v=nEmF8tZk4U

1, 8, 9

2, 4, 5

1,2,3,4,5

Students must identify to what extent a business that works

in trade would have to conduct a stocktake and why?
Students will have prior knowledge of how accounting is used
within a business. However, this was generalised and basic
accounting. Within this lesson students will be introduced to
balance day adjustments and will complete a small activity.
This will assist students to further their knowledge of
completing accounting reports.
To increase their knowledge in regards to the required reports
of a trade business students will complete a set of textbook
exercises as a formative assessment both manually and
using ICT. This will include stock cards, depreciation
equations and accounts, advanced balance day adjustments
and general accounting reports. Students will be able to
increase their knowledge of the ICT package

Balance Day
adjustments
worksheet

1, 2, 3, 4, 6,
9, 10, 13

3, 4, 5,6

Textbook

4, 5, 6, 7, 9,
10, 11, 12,
13

3, 4, 5, 6, 7

Within this lesson students will work on ICT accounting only.

As per VCAA study design requirements, students will gain an
in depth knowledge of how an accounting package works.
Prior to this lesson students have limited knowledge about
the program. Upon completion of the ICT workshop students
will have gained confidence to use the program for their final
assessment.

ICT reporting
Package

4, 5, 6, 7, 9,
10, 11, 12,
13

3, 4, 5, 6, 7

Students will be given a case study (in groups of 4) which

includes the (basic) financials of a trade business. Students
will interpret the information and its effect on business
decisions, consolidating their knowledge of accounting
reports. Class discussion at conclusion will reflect students
understanding.

Case Studies

1, 5, 7, 9, 10,
11, 12, 13

1, 3, 4, 5, 7

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Assessment
Description
Students will create a sole trader business and present the relevant reporting documents in the
form of a business portfolio.
Students will compile a list of transactions and the reporting documents that need to be
completed to record them. These include; Balance sheets, Cash flow statements, Stock cards,
Journals, general ledger and Income statement
Students will need to use their prior knowledge and the work completed within the unit in order
to complete the project.

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Key
knowledge
1, 3, 4, 5, 6,
7, 9, 10, 13

Key Skills
1, 3, 4, 5, 6