Principles of accounts couse outline


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The course outline for Principles of Accounts to be used from Form 3-5 in secondary schools.

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Principles of accounts couse outline

  1. 1. PRINCIPLES OF ACCOUNTSCURRICULUM FORMS 3 - 5 A division of the Caribbean Secondary Education Certificate Syllabus Effective September 2010Based on the following allocation of periods Form 3 3 – 35 minutes periods per week Form 4 & 5 5 – 35 minutes periods per weekBusiness Education OfficerMinistry of Education, Sports, Youth and Gender Affairs
  2. 2. IntroductionThis curriculum breaks down the content of the CSEC Syllabus over a three year period. It should beused in conjunction with the CSEC Syllabus.PurposeThe purpose is to standardize when the content of CSEC Syllabus is being taught in all secondaryschools.Teaching StrategiesIn order to cater for the different learning styles in the classroom, teachers are urged to use variousteaching strategies and styles to meet the individual needs of their students. Besides the usual “chalkand talk” teachers should try to incorporate as many of the following strategies: Independent Activities Cooperative Learning Visuals Simulations Peer Tutoring Hands-on Technology Integration Projects GamesAlong with the different teaching styles there should be a variety of class activities to evaluate yourlessons to include:  Questions & Answers  Puzzles  Quiz  Games  Web Quest  Test  Book QuestPrepared by Jacqueline RichardsonBusiness Education Officer 2
  3. 3. FORM 3SECTION TOPIC CONTENT a) concept of “Accounting” and “Principles of Accounting b) accounting as a business practice – the purpose of accounting c) internal and external users of accounting information and their needs d) types of business organizations Introduction to e) the accounting cycle with its diagrammatic representations 1 Principles of Accounts f) accounting concepts and conventions g) software currently being used in Accounting h) advantages and disadvantages of using the computer in Accounting i) Accounting processes which could be readily performed by the use of the computer a)The uses of Books of Original Entry -general journal -purchases day book -sales day book -returns outwards day book -returns inwards day book - cash book -petty cash book 3 Books of Original b) Cash and credit transaction Entry The use of; -cash -cheques - credit cards - debit cards c) Source documents and the books of original entry to which they are related d)Record transactions in the books of original entry using source documents e)Treatment of trade discounts and cash discounts f) Posting totals of books of original entry to the general ledger. a)Definition and purpose of a Balance Sheet b) Definition and examples of assets, liabilities, capital 2 Classified Balance c) Balance Sheet Equation A= C+L Sheet d) Definition and examples of fixed assets, currents assets, current liabilities, long term liabilitiesPrepared by Jacqueline RichardsonBusiness Education Officer 3
  4. 4. e) arrangement of assets and liabilities in order of - permanence - liquidity f) Effect of transactions on Balance Sheet items – increase and decrease in items while maintaining the balance sheet equation a) Different types of ledgers for recording nominal, real and personal accounts - General ledger - Sales/debtors’ ledger - Purchases/creditors’ ledger b) Classification of accounts - Nominal – expenses and revenue - Real – assets 4 Ledger s and Trial - Personal – debtors and creditors Balance c) Rules of entry for assets, liabilities, income, capital and expenses d) Recording transactions in accounts using double entry e) Posting to general and subsidiary ledgers f) Balancing accounts g) Trial balances h) Uses and limitations of the trial balance a) The purpose of Financial Statements to satisfy the needs of the users Preparation of 5 Financial b) Preparation of Trading and Profit and Loss account for sole- Statements of the traders including adjustment for return inwards and outwards; closing stock Sole-Trader c) Preparation of Balance Sheets d) Definition of working capitalPrepared by Jacqueline RichardsonBusiness Education Officer 4
  5. 5. FORM 4SECTION TOPIC CONTENT a) preparation of classified Balance Sheet showing working capital Preparation and b) working capital as a basic tool for solvency; working Analysis of capital formula 5 Financial c) treatment of net profit or loss on the Balance Sheet Statements of the d) trading results: simple ratios such as stock turn, average sole-trader (cont’d) stock, gross profit percentage, net profit percentage e) Analysis and interpretation of the financial position of a business using ratios: current ratio; acid test ratio; return on investment a) The reasons for adjustments; application of the matching/accruals concept b) Journal entries for prepaid expenses and advanced revenues c) Journal entries for accrued expenses and revenues d) Ledger accounts for expenses and revenues e) The treatment for prepayments and accruals on the Balance Sheet f) The reasons for bad debts; aging debtors: creation of provision for doubtful debts End of period 6 adjustment g) Accounting entries for bad and doubtful debts: the treatment of bad and doubtful debts in the Profit and Loss Account and Balance Sheet h) Definition of depreciation: causes of depreciation: factors to be considered when calculating depreciation i) Straight line method (using formula) and reducing balance method of depreciation j) Journal entries for the provision for depreciation: the maintenance of the provision for depreciation account: the treatment of accumulated depreciation on the Balance Sheet: the determination of Net Book Value k) The preparation of adjusted Financial Statements.Prepared by Jacqueline RichardsonBusiness Education Officer 5
  6. 6. a) The need for control systems b) Common control systems - Suspense account - Control accounts - Bank reconciliation statements c) Types of errors d) Uses of the suspense account e) Correction of errors via journal entries f) Suspense accounts 7 Control System g) The effect of errors on the Trading and Profit and Loss account and the Balance Sheet h) Uses of control accounts i) Sources of information for entries in control accounts j) Sales ledger control accounts, purchases ledger control account k) Meaning (significance) of the balances on control accounts l) Identification of the items that cause the difference between cash book and bank statement balances and updating of the cash book m) Uses and construction of the bank reconciliation statement a) Definition of partnership: comparison of a partnership with sole-traders and corporations: types of partners b) Features of partnership c) Reasons for formation of partnership 9 Accounting for d) Features of partnership agreement Partnership e) The capital account of partners f) Methods of sharing profit/loss g) The preparation of the appropriation account h) The current account prepared with items posted from the appropriation account: columnar form and single accounts i) The significance of the debit and credit balances brought down on the current accounts j) The treatment of current account balances on the balance sheetPrepared by Jacqueline RichardsonBusiness Education Officer 6
  7. 7. a) Nature of limited liability companies b) Advantages and disadvantages of limited liability companies c) Methods of raising capital d) Issue of shares and debentures e) Types of shares: rights and privileges of owners of 10 Accounting for each type of share corporations f) Elements of shareholders’ equity share capital, reserves g) Calculation of dividend payments h) Appropriation of profits i) Final accounts of limited liability companies j) Calculation and interpretation of accounting ratios a) Nature of co-operative societies: co-operative principles b) Types of co-operatives 11 Accounting for c) Raising capital for co-operative society: journal entries to Co-operative record capital Societies d) Preparation of Income Statement showing distribution of surplus e) Preparation of balance sheetPrepared by Jacqueline RichardsonBusiness Education Officer 7
  8. 8. FORM 5SECTION TOPIC CONTENT a) Methods of inventory (stock) valuation: FIFO, LIFO and AVCO Preparation and 5 Analysis of b) Calculation of closing inventory (stock) using FIFO, Financial LIFO, AVCO Statements of the c) The effect on profit of different methods of (inventory) sole-trader (cont’d) stock valuation a) The meaning and limitation of single entry recording b) Preparation of opening and closing statement of affairs from incomplete records 8 Incomplete Records c) Calculation of missing amounts such as sales, purchases, expenses, depreciation and drawings d) The use of mark-up, margin and stock turnover to find missing amounts, such as purchases, sales and gross profit e) Preparation of Trading and profit and Loss Account and balance sheet from incomplete records a) Non-trading and non-profit organizations b) Accounting procedures for trading and non-trading organizations 12 Accounting for Non-Trading c) Preparation of receipts and payments account organization d) Preparation of income generating accounts: subscription account, bar trading account, dance account e) Distinction between capital expenditure and revenue expenditure f) Preparation of Income and Expenditure Account treating transfer form income generating accounts g) Preparation of Balance Sheets including calculation of accumulated fund: treatment of deficit or surplus on accumulated fund a) Elements of cost: direct materials, direct labour and factory overheads 13 Manufacturing b) Preparation of manufacturing account showing Accounts - Cost of raw material consumed - Prime cost - Factory overheadsPrepared by Jacqueline RichardsonBusiness Education Officer 8
  9. 9. - Work in progress - Cost of production c) Calculation of unit cost of items produced d) Preparation of trading, profit and loss account and balance sheet of a manufacturer a) Use of time cards, time books, electronic clock-in cards, employee earnings records b) Calculation of gross earnings form employee records 14 Payroll Accounting c) Preparation of pay roll and wage documents from time cards, computer records d) Calculation of statutory deductions and non-statutory deductions e) Statutory and non-statutory deductionsStudents should be tested using past paper question under exam conditions.Students should be given clear guidelines on their SBA Projects as outlined in theSyllabus. The SBA component should begin no later than Term 1 in Form 5.Term 2 Form 5 should be used for completion of SBA Projects, revision and furtherpractice of Past Papers.Prepared by Jacqueline RichardsonBusiness Education Officer 9