Unit 1: Role of accounting in business
This unit focuses on the establishment of a business and the role of accounting in the determination of business success or failure. Students consider the importance of accounting information to stakeholders. They analyse, interpret and evaluate the performance of the business using financial and non-financial information. Students use these evaluations to make recommendations regarding the suitability of a business as an investment.
Unit 2: Accounting and decision-making for a trading business
This unit focuses on 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 to prepare historical and budgeted accounting reports. They analyse and evaluate the performance of the business using financial and other information to predict, budget and compare the potential effects of alternative strategies on the performance of the business and suggest strategies to improve business performance.
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 effect 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.
Unit 4: Recording, reporting, budgeting and decision-making
This unit provides an extension of the recording and reporting processes from Unit 3 with the inclusion of balance day adjustments and alternative depreciation methods. 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 use both manual methods and ICT to record and report. They investigate the role and importance of budgeting in decision-making for a business. Students analyse and interpret accounting reports and graphical representations to evaluate the performance of a business and suggest strategies to business owners to improve business performance.