Unit 1: The role of accounting in business
This unit explores the establishment of a business and the role of accounting in the determination of business success or failure. It considers the importance of accounting information to stakeholders. Students analyse, interpret and evaluate the performance of the business using financial and non-financial information. They use these evaluations to make recommendations regarding the suitability of a business as an investment.
Students record financial data and prepare reports for service businesses owned by sole proprietors.
Where appropriate, the accounting procedures developed in each area of study should incorporate the application of the IASB’s Conceptual Framework and financial indicators to measure business performance. They should also take into account the ethical considerations, including financial, social and environmental considerations, faced by business owners when making business decisions.
Unit 2: Accounting and decision-making for a trading business
In this unit, students develop their knowledge of 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, including spreadsheets, to prepare historical and budgeted accounting reports.
Students analyse and evaluate the performance of the business relating to inventory, accounts receivable, accounts payable and non-current assets. They use relevant financial and other information to predict, budget and compare the potential effects of alternative strategies on the performance of the business. Using these evaluations, students develop and suggest to the owner strategies to improve business performance.
Where appropriate, the accounting procedures developed in each area of study should incorporate application of the Conceptual Framework, financial indicators and the ethical considerations faced by business owners, including financial, social and environmental considerations, when making business decisions.
