Teacher Resource Bank

GCE Accounting Scheme of Work (Revised August 2011)

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Teacher Resource Bank / GCE Accounting / Scheme of Work / Version 2.0

SCHEME OF WORK
Introduction This scheme of work has been designed to offer support for teachers when planning delivery of the new AQA GCE Accounting specification. The sequence of topics and the approximate timings are suggestions only. The scheme of work has been based on the following assumptions. OVERVIEW Year 1 Unit 1 Autumn term all content Spring term : revision and sitting assessment first 2 weeks Spring and summer terms: content delivered between sitting January assessment and mid May Summer term: revision and sitting examination Summer term: some content covered before end of term Year 2 Unit 3 Autumn term: remaining content covered Spring term: revision and sitting assessment first 2 weeks Spring and summer terms: content delivered between January assessment and mid May Summer term: remaining content covered 13 weeks 2 weeks 15 weeks

13 weeks 15 weeks 2 weeks

Unit 2

3 weeks

13 weeks

18 weeks

2 weeks

13 weeks 15 weeks 2 weeks

Unit 4

Teachers are, of course, free to adapt this scheme of work to suit the circumstances within their own centres and with their own groups of students. It is inevitable that the time available per week for timetabled delivery of the subject will vary from centre to centre. Some centres will have longer or shorter terms depending on the provision of half-term holidays, start of the academic year, etc, so the time available for teaching topics in the table above should be extended or compressed accordingly. Furthermore, at some centres all students may be given the opportunity to take an examination in January, while at other centres, examinations may only be available in the summer term. If examinations are only available in the summer term, the weeks available for content delivery will be slightly greater than shown above. Finally, the post summer term examination period may, or may not, be available as a time to start work on the first A2 unit.

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Teacher Resource Bank / GCE Accounting / Scheme of Work / Version 2.0

ACCN1 (AS) INTRODUCTION TO FINANCIAL ACCOUNTING Topic Purposes of Accounting Main Content Reasons for keeping accounting records. Stakeholders in a business and how they benefit from accounting records. Getting started with double-entry: simple balance sheets as a means of understanding terms: assets, liabilities and capital. Preparing simple ledger accounts. Developing skills in making double-entry records, including how to balance accounts. Trial balances Simple final accounts Using a trial balance to check arithmetical accuracy of accounts. Continued development of skills in double-entry record keeping. Preparing simple final accounts as part of the double-entry system. Continued development of skills in double-entry record keeping including trial balances and final accounts. Balance sheets Developing the presentation of balance sheets: fixed assets, current assets, current liabilities, long-term liabilities, capital, etc. Continued development of skills in double-entry record keeping including trial balances, final accounts and balance sheets. Cash books Preparing two- and three-column cash books; recording cash discounts; source documents for money transactions. Preparing day books to record purchases, sales and returns; source documents for credit transactions; posting day books to ledger records; use of sales ledgers, purchases ledgers and general ledgers. Preparing a general journal; posting to ledger accounts. 2 1 Week

Basic doubleentry skills

Day books

General journal Adjustments in final accounts

Adjustments to expenses for prepayments and accruals in expense accounts; effect of adjustments in final accounts and balance sheets. Recording bad debts. Calculating depreciation using the straight-line method. Entries for depreciation in the profit and loss account and balance sheet. 8 and 9

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Teacher Resource Bank / GCE Accounting / Scheme of Work / Version 2.0

ACCN1 (AS) INTRODUCTION TO FINANCIAL ACCOUNTING Topic Correcting errors Suspense account Main Content Benefits and limitations of the trial balance: types of error not disclosed by a trial balance; correction of these errors. Preparing suspense accounts and correcting errors which affect the suspense account. Assessing the effect of errors on profits and balance sheets. Bank reconciliation statements Control accounts How bank statements are prepared; updating cash books to keep in step with bank statements; preparing bank reconciliation statements; benefits of preparing bank reconciliation statements. Preparing memorandum sales and purchases ledger control accounts. Benefits and limitations of control accounts. Revision Focus on revision and examination practise prior to sitting midyear external assessment. 14 and 15 Week 10

11

12

13

Notes: 1. There are many ways of teaching double-entry book-keeping and there is considerable variation in the way textbooks introduce this subject. For example, some teachers like to begin with simple balance sheets moving to the use of simple accounts for assets, liabilities and capital (ie the method shown in the scheme of work above). However, many others start with a simple ledger account (for example a cash account) and gradually build up an understanding of how different types of account are prepared. Some teachers like to introduce simple trial balances and final accounts at an early stage to emphasise their importance; others prefer to delay introducing verification techniques to later in the first term and teach final accounts and balance sheets somewhat separated from double-entry procedures. 2. A common approach is to build up the confidence of students in recording accounting information by a gradual development of the accounting system and much practise in preparing accounting records so that students become skilful in recording data accurately and quickly. 3. Verification techniques, particularly bank reconciliation, error correction and control accounts, can be taught in any sequence. Some teachers may prefer to spread out coverage of these topics throughout the term rather than placing them as the last topics to be taught.

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Teacher Resource Bank / GCE Accounting / Scheme of Work / Version 2.0

ACCN2 (AS) FINANCIAL AND MANAGEMENT ACCOUNTING Topic Types of business organisation Main Content Week

Comparison of the advantages and disadvantages of: sole traders, partnerships and limited liability companies.

Sole trader final Defining capital and revenue expenditure. accounts: further Applying terms. developments Importance of correctly distinguishing capital and revenue Capital and expenditure. revenue expenditure Reasons for providing for depreciation. Calculating depreciation using the reducing balance method. Depreciation Recording provisions for depreciation in the ledger, financial statements. Calculating and recording the profit or loss on the disposal of non-current assets in ledger accounts and on the financial statements Reasons for making provisions for doubtful debts. Provisions for doubtful debts Recording provisions for doubtful debts.

Recording bad debts recovered. Adjustments to other income Making adjustments for income due and income received in advance. 4

The purpose of accounting concepts. Accounting concepts Understanding each concept: definition, significance and application. Calculating stock figures using cost or net realisable value. Introduction to the capital structure of limited companies. Limited companies Understanding the characteristics of: ordinary shares, preference shares; debentures. Understanding the concept of nominal value and share premium and the payment of dividends. 6 4 and 5

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Teacher Resource Bank / GCE Accounting / Scheme of Work / Version 2.0

ACCN2 (AS) FINANCIAL AND MANAGEMENT ACCOUNTING Topic Main Content Introduction to the financial statements of limited companies: Limited companies statement of changes is equity introduction Limited companies statement of changes in equity advanced Income statements including profit from operations Balance sheets focusing on the equity section Recording share issues on the balance sheet Calculating dividends 7 Week

Limited Companies financial statements an introduction

Preparing statements of changes in equity: Accounting for retained earnings Basic share issues Calculation of dividends Revaluation of assets impact on statement of changes in equity and balance sheet Understanding rights and bonus issues Understanding capital reserves and revenue reserves Recording rights and bonus issues in statement of changes in equity. 9 8

Trading account ratios: formulae; calculations; significance. Ratio analysis Profit and loss account ratios: formulae, calculations; significance. Balance sheet ratios: formulae, calculations; significance. Using ratio analysis as the basis of assessing the performance of a sole trader or limited company focusing on liquidity and profitability. Use of comparative information to inform assessment. Preparing reports on business performance. Limitations of ratio analysis. Difference between cash and profits. Reasons for preparing budgets; benefits of budgetary control. Preparation of cash budgets. Limitations of budgetary control. ICT and accounting How ICT is used in accounting. Advantages and disadvantages of implementing computerisation of accounting records. 13 12 11 10

Assessment of business performance

Introduction to budgeting

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Teacher Resource Bank / GCE Accounting / Scheme of Work / Version 2.0

ACCN2 (AS) FINANCIAL AND MANAGEMENT ACCOUNTING Topic Revision Main Content Focus on revision and examination practise prior to sitting end of year external assessment(s). Week 14 and 15

Notes: 1. There can be considerable flexibility in the sequencing of topics in Unit 2. For example, accounting concepts, budgeting, ICT and business ownership could be covered at any point. It probably makes more sense to concentrate on a sole traders final accounts and balance sheets before introducing limited companies. 2. Some teachers may prefer to spread some topics out over a wider timescale rather than concentrate their delivery into one week. For example, as students find accounting concepts rather difficult to understand, some teachers may prefer to return to this topic at intervals throughout the course, introducing a new concept at each stage. Types of business organisation could also be treated in this way. 3. The first topic in the specification is Types of business organisation. Some teachers may prefer to cover this topic at the beginning of the course. In the scheme of work above this topic has been scheduled for week 9, so that candidates will already have covered accounting for limited companies before considering the benefits and drawbacks of this form of organisation.

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Teacher Resource Bank / GCE Accounting / Scheme of Work / Version 2.0

ACCN3 (A2) FURTHER ASPECTS OF FINANCIAL ACCOUNTING Topic Sources of finance Incomplete records Main Content Assessing different types of finance: internal, shares, debentures, bank loans and overdrafts, mortgages. Calculating profit based on changes in capital over time. Determining missing information required for final accounts: sales, purchases, capital balances; using mark-up and margin to calculate missing trading account figures. Developing skill in preparing full final accounts and balance sheets from incomplete records. Drawbacks of maintaining incomplete records. Partnership accounts Preparing final accounts, including appropriation accounts, and balance sheets for partnerships. Use of capital and current accounts. Nature of partnership agreements; how profits and losses are shared where there is no agreement; sharing profits and losses where agreements change during the year. Revaluation of assets including goodwill upon the retirement of a partner. Revaluation of assets including goodwill upon the admission of a new partner. Dissolution of partnership; application of the ruling in Garner v. Murray. Published accounts of limited companies Why companies publish their accounts. Main elements of published reports. How user groups would use published accounts; value of published accounts to these groups. Limitations of published accounts. Prepare schedules of non-current assets. Differences between duties of directors and auditors. Cash flow statements based on the indirect method following format given in IAS7: developing skills in comparing balance sheets, using information from final accounts, treating non-cash items, recording dividends, tax payments, etc. Assessing cash flow statements. Value of cash flow statements. 8 4 and 5 1 and 2 Week 1

5 and 6

9 and 10

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Teacher Resource Bank / GCE Accounting / Scheme of Work / Version 2.0

ACCN3 (A2) FURTHER ASPECTS OF FINANCIAL ACCOUNTING Topic Accounting standards Main Content Introduction to accounting standards: reasons for, benefits of, etc. Key features of international accounting standards. Purpose and importance of IAS 1, 2, 7, 8, 10, 16, 18, 36, 37 and 38. Stock valuation Use of FIFO and AVCO methods of stock valuation; effect on profits in the short term. Reconciliation of stock values with actual stock. Synoptic topics review Revision Review of topics from Units 1 and 2. 14-16 Focus on revision of topics within Unit and examination practise prior to sitting mid-year external assessment(s). 11 and 12 Week

13

17 and 18

Notes: 1. It is assumed that students can begin the A2 course towards the end of the summer term of the first year of the course. Where this is not the case, there will therefore be less time to complete the Unit in time for the mid-year examination. 2. There can be almost complete flexibility in deciding in which order to teach the topics in this Unit. For example, sources of finance, incomplete records, partnership accounts, stock valuation could be taught in any sequence. It is highly likely, however, that cash flow statements and accounting standards would be best taught after covering published accounts of limited companies. 3. Time has been set aside to ensure that students have an opportunity to revisit topics covered in the first year of their course which could be the basis for synoptic assessment. This element of revision could be delivered in a block of time as shown or spread out over the weeks available to cover Unit 3. Synoptic questions will be set on issues relating to Units 1 and 2.

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Teacher Resource Bank / GCE Accounting / Scheme of Work / Version 2.0

ACCN4 (A2) FURTHER ASPECTS OF MANAGEMENT ACCOUNTING Topic Main Content Week

Manufacturing Preparing manufacturing accounts to show prime cost, total accounts overheads, adjustment for work in progress, as part of the final accounts and balance sheets of manufacturing organisations. Profit on manufacture: how recorded; provisions for unrealised profit. Marginal costing, absorption costing and activity based costing Terminology: direct costs, indirect costs, variable costs, contribution, marginal cost, break-even, etc. Calculating break-even point by use of formulae. Limitations of break-even analysis by formula and graph. What absorption costing means; comparison with marginal costing. Uses of absorption and marginal costing; limitations of each method. Calculation of profit using absorption and marginal costing. Cost centre; the allocation and apportionment of costs. Calculation and application of overhead absorption rates using machine hour and labour methods. Activity based costing: meaning of terms, cost pools and cost drivers. Comparison of marginal, absorption and activity based costing: uses and limitations. Standard costing and variance analysis Standard costing: meaning, purpose, advantages and disadvantages. Variance analysis: purpose and value of; calculation of variances for sales, materials and labour. Possible explanations of variances; interrelationship of variances. Reconciliation of actual and budget figures using variances. Capital investment appraisal Purpose of capital investment appraisal. Use of payback and net present value methods including calculation of estimated cash flows. Comparison of methods including advantages and disadvantages of each method; limitations of methods. Report on capital investment appraisals; making recommendations based on appropriate financial analysis.

1 and 2

3 and 4

5 and 6

7 and 8

8 and 9

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Teacher Resource Bank / GCE Accounting / Scheme of Work / Version 2.0

ACCN4 (A2) FURTHER ASPECTS OF MANAGEMENT ACCOUNTING Topic Budgeting: further consideration Main Content Review of budgetary control: purpose, advantages and disadvantages. Preparation of purchases, sales, production, labour, debtor and creditor budgets. Comment on budgets including their relationship with master budget. Preparation of forecast operating statements and balance sheets. Other factors affecting decision making: social accounting Synoptic topics review Revision Explain why non-financial factors should be considered. Social accounting including ethical factors. Effect of business decisions from the viewpoint of stakeholders including employees, the local and national economy and the environment. Further opportunity to review topics from Unit 2. 12 Week

10 and 11

13

Focus on revision of topics within Unit and examination practise prior to sitting end of year external assessment(s).

14 and 15

Notes: 1. Management topics can be placed anywhere within the scheme, particularly capital investment appraisal and budgetary control. 2. There are fewer opportunities to vary the sequence in which costing topics are placed. It is normal practice for students to study manufacturing accounts before covering marginal costing, absorption costing and then activity based costing. Standard costing is probably best covered when other costing topics have been assimilated by students. 3. Some time has been set aside to prepare for synoptic questions. For this Unit, synoptic questions will be set on issues arising from Unit 2.

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