Developing a program
VCE Accounting explores the financial recording, reporting, analysis and decision making of a sole proprietor operating a small business. Both the theoretical and practical aspects of accounting are studied and assessed. Teachers should use the
VCE Accounting Study Design, along with this advice, to develop a teaching and learning program that incorporates appropriate learning activities that enable students to develop the key knowledge and key skills identified in the areas of study.
This study develops students’ understanding of how to process, collect, record, report, analyse and interpret financial and non-financial data and accounting information. This use of data and information will assist students when considering how to improve business performance, whilst also taking into account the goals and ethical and social considerations of the business.
Teachers should provide students with opportunity to develop and apply critical thinking skills to a range of business situations, as well as to model alternative outcomes potentially available to businesses.
The use of a range of assessment activity types is encouraged. More than one assessment task may be used to assess satisfactory completion of each outcome in each of Units 1 to 4.
In Unit 1 teachers are encouraged to incorporate the study of a range of business scenarios in order to provide opportunities for students to apply their knowledge and develop skills.
During Unit 2 the focus shifts to trading businesses, thus allowing for opportunities to develop a deep understanding of inventory, accounts receivable and accounts payable, as well as the management of non-current assets. Through this, students will develop an understanding of fundamental accounting concepts and processes.
It may prove, at times, challenging deciding where and when to include the content from the Characteristics of the study. It is important to note however that these concepts are central to all four units of VCE Accounting and are required to be covered to ensure a comprehensive grasp of key concepts.
Provision of opportunities for students to develop a depth of understanding of the concepts within Units 1 and 2 will support development of an understanding throughout all four units. It is consequently important that an approach where these concepts are covered during throughout Units 1 and 2 be considered. One possible way to do this, that involves ensuring that all concepts are covered, is provided in the sample models below.
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Unit 1: Area of Study |
Suggested Time Allocation |
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The role of accounting | 20 hours |
Structured questions | 30 hours |
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Unit 1: Area of Study 1
The role of accounting |
Unit 1: Area of Study 2
Recording financial data and reporting accounting information for a service business |
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Term 1 Week 1 - Why do so many small businesses fail?
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Term 1 Week 8 - Documents used by a business
- Verifiability
- Twofold effect of transactions
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Term 1 Week 2 - Internal and external sources of finance
- Role of professionals
- Alternative investment options
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Term 1 Week 9 - Accounting elements
- Cash verses profit
- Material and supplies required in a service business
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Term 1 Week 3 - Types of business ownership
- Entity
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Term 2 Week 1 - Cash Receipts Journal
- Cash Payments Journal
- Cash Flow Statement
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Term 1 Week 4 - Ethical considerations when making business decisions
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Term 2 Week 2 - Sales Journal
- Purchases Journals
- Income Statement
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Term 1 Week 5 |
Term 2 Week 3 - Balance Sheet
- Twofold Effect
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Term 1 Week 6 |
Term 2 Week 4 - Financial Reports and Graphical Representation
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Term 1 Week 7 |
Term 2 Week 5 - Financial Reports and Graphical Representation
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Term 2 Week 6 |
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Unit 2: Area of Study |
Suggested Time Allocation |
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Accounting for and managing inventory | 20 hours |
Accounting for and managing accounts receivable and accounts payable | 15 hours |
Accounting for and managing non-current assets | 15 hours |
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Unit 1: Area of Study 1
Accounting for and managing inventory |
Unit 1: Area of Study 2
Accounting for and managing accounts receivable and accounts payable |
Accounting for and managing non-current assets |
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Term 3 Week 1 - Characteristics of a trading business
- The cost of inventory
- Ethical considerations for inventory management
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Term 3 Week 7 - Transactions involving accounts receivable and accounts payable
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Term 4 Week 2 - Valuation of non-current assets
- Faithful representation
- Ethical considerations for non-current asset management
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Term 3 Week 2
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Term 3 Week 8 - Recording and reporting for accounts receivable and accounts payable
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Term 4 Week 3 - Straight line depreciation
- Relevance
- Accrual accounting
- Expense recognition
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Term 3 Week 3 - Inventory Cards – Identified Cost
- Factors impacting the selection of a cost assignment method
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Term 3 Week 9 - Bad debts, settlement discounts and other strategies to improve accounts receivable turnover
- Ethical considerations
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Term 4 Week 4 - Reporting depreciation
- Financial indicators for non-current asset management
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Term 3 Week 4 - Extracting important information from inventory cards
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Term 4 Week 1 - Importance of accounts payable turnover
- Consideration of the cash cycle and its importance for business performance
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Term 4 Week 5 - Strategies for the effective management of non-current assets
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Term 3 Week 5 - Special journals for trading business
- Reporting inventory
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Term 4 Week 6 |
Term 3 Week 6 - Inventory turnover
- Effective management of inventory
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Units 3 and 4
Assessment in Units 3 and 4 is more structured than at Units 1 and 2. The types of assessment task that may be potentially used to assess each outcome are listed in the study design. The contribution of each outcome to the total score for School-assessed Coursework is also clearly stipulated. Students study financial accounting for trading businesses, as well as recording, reporting, budgeting and business decision-making.
It can be challenging to decide where and when to include the content from the Characteristics of the study. It is important to note that these concepts are central to all four units of VCE Accounting.
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Unit 3: Area of Study |
Suggested Time Allocation |
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Recording and analysing financial data | 25 hours |
Preparing and interpreting accounting reports | 25 hours |
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Unit 3: Area of Study 1 |
Unit 3: Area of Study 2 |
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Term 1 Week 1 - Accounting assumptions
- Qualitative characteristics
- Elements of financial reports
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Term 2 Week 1 - Inventory cards – Identified cost
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Term 1 Week 2 |
Term 2 Week 2 - Inventory cards – First in first out
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Term 1 Week 3 - The General Journal – Cash transactions
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Term 2 Week 3 - Closing revenue and expense accounts
- Transferring accounts
- Income Statements
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Term 1 Week 4 - The General Journal – Cash transactions
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Term 2 Week 4 |
Term 1 Week 5 - The General Journal – Credit Transactions – Purchases
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Term 2 Week 5 |
Term 1 Week 6 - The General Journal – Credit Transactions – Sales
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Term 2 Week 6 |
Term 1 Week 7 - The General Journal – Credit Transactions – Sales
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Term 1 Week 8 - The General Journal – Other transactions
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Term 1 Week 9 - The General Journal – Other transactions
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Unit 3: Area of Study |
Suggested Time Allocation |
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Extension of recording and reporting | 25 hours |
Budgeting and decision-making | 25 hours |
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Unit 4: Area of Study 1 |
Unit 4: Area of Study 2 |
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Term 2 Week 6 - Balance day adjustments
- Prepaid expenses
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Term 3 Week 4 - Budgeting
- Budgeted Cash Flow Statement
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Term 2 Week 7 - Balance day adjustments
- Accrued expenses
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Term 3 Week 5 - Budgeting
- Budgeted Income Statement
- Budgeted Balance Sheet
- Variance reports
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Term 2 Week 8 - The General Journal – Cash Transactions
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Term 3 Week 6 - Budgeting
- Variance reportsl
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Term 2 Week 9 - Non-current assets
- Straight-line depreciation
Purchasing non-current assets
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Term 3 Week 7 - Accounting indicators
- Evaluating profitability
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Term 2 Week 10 - Non-current assets
- Reducing balance depreciation
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Term 3 Week 8 - Accounting indicators
- Evaluating profitability
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Term 3 Week 1 - Disposal of non-current assets
- Cash sale of non-current assets
- Trade-in of non-current assets
- Reporting of non-current assets
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Term 3 Week 9 - Accounting indicators
- Evaluating liquidity and stability
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Term 3 Week 2 - Balance day adjustments
- Unearned revenue
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Term 3 Week 10 - Accounting indicators
- Evaluating liquidity and stability
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Term 3 Week 3 - Balance day adjustments
- Accrued revenue
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Term 4 Weeks 1–3 |
Terminology
The terminology used in the study design has been updated to reflect the International Accounting Standards Board (IASB) Conceptual Framework.
Qualitative characteristics and accounting assumptions
It is essential that students develop a sound knowledge of the IASB Conceptual Framework and are able to apply and justify use of the qualitative characteristics and the accounting assumptions. Teachers should incorporate these throughout each Area of Study rather than focusing on each one as a stand-alone topic.
Modelling and Advice
It is important that students are provided with opportunities to model financial outcomes and the implications of potential options, to make decisions and clearly communicate their opinions to users of financial information. There are many opportunities throughout the course for this. Practising these skills within each Area of Study throughout Units 1 to 4 will allow students opportunities to develop a deeper understanding of the concepts being covered. Examples have been provided for each unit.
Ethical considerations
Throughout Units 1 to 4 students should regularly be provided with opportunities to incorporate and consider the financial, social and environmental implications of business decision-making. Ethical issues will impact fundamental business operations and therefore directly affect the overall performance of a business. For example, a decision made by the owner of a business manufacturing furniture to only source and use renewable timber, despite the higher cost, will directly affect business performance. Similarly, decisions that businesses make about the types of packaging materials used will have an environmental, as well as financial, impact. Ethical considerations inevitably arise for an accountant and business owner when recording and reporting financial data and accounting information. For example, the choice of a depreciation method or timing of the recording of potential expenses can have significant ethical implications. Students should be provided with regular opportunities to consider these.
A few examples of the numerous ethical considerations an accountant may be required to incorporate into business decision-making are:
- Where to source inventory items. Is it ethical to purchase from businesses that use sweatshops? Should only local or sustainable produce be sourced in order to reduce the carbon footprint of the business? (Unit 1, Area of Study 1)
- Whether to operate within the ‘cash economy’ and thereby avoid GST. (Unit 1, Area of Study 2)
- The application of internal control procedures and the ethical considerations involved. (Unit 1, Area of Study 2)
- Whether to import resources from overseas or to use local suppliers who are likely to be more expensive. (Unit 2, Area of Study 2)
- Whether to use debt collection procedures that are potentially unethical. (Unit 2, Area of Study 2)
- Whether to purchase or lease an electric car rather than a petrol-fuelled model, which is usually initially cheaper to purchase but involves higher running costs and a a significantly greater negative environmental impact. (Unit 2, Area of Study 3)
- Factors to be considered when undertaking asset valuation, such as inventory write-downs, doubtful debts and depreciation. (Unit 3, Area of Study 1)
- Whether to ‘window dress’ the figures in an accounting report in order to maximise the price of a business for sale. (Unit 3, Area of Study 2)
- The ethical implications of shifting revenue and expenses in order to manipulate profit, such as not recording transactions in the appropriate period (balance day adjustment). (Unit 4, Area of Study 1)
- The social and/or environmental effects of a specific business decision and its implications for the goal of profit maximisation and optimisation of returns to the owners. (Unit 4, Area of Study 2)
- Consideration of disclosure in accounting reports. (Unit 4)
Relevant ethical considerations will arise throughout the life of the study. Teachers are encouraged to view this component of the study design as an opportunity to bring the real world into the VCE Accounting classroom and allow students to think about and apply the typical ethical considerations an accountant must consider in the 21st century.
Financial indicators
Financial indicators, as the key tools used in measurement and evaluation of business performance, are studied throughout Units 1 to 4. It is important that students develop a strong working knowledge of a range of financial indicators as a means to evaluating different aspects of business performance effectively and accurately.
Documents for a business
The source documents potentially used by a business as records of transactions are specified on page 14 of the study design. These documents may either be prepared manually or be computer generated. Many source documents satisfy the requirements of a tax invoice, which the Australian Taxation Office specifies must contain the following information:
- clear identification as being a tax invoice
- seller’s identity
- seller’s Australian Business Number
- date the invoice was issued
- brief description of items sold, including quantity and price
- Goods and Services Tax (GST) amount payable
- extent to which each sale on the invoice is a taxable sale (including GST)
- buyer’s identity or Australian Business Number (ABN) (if the sale is more than $1,000).
Journals
Journals are an integral component of the accounting system. The use of special journals is covered in Units 1 and 2. In Units 3 and 4 the general journal is used exclusively for recording all transactions.
Goods and Services Tax (GST)
The Goods and Services Tax (GST) is to be included throughout the study, except where it has been specifically excluded, as indicated within the relevant key knowledge dot points. Students should develop the skills required to record and integrate GST accurately into accounting recording, reporting, budgeting and decision-making.
Templates
These templates (docx - 63kb) are recommended for use with teaching and learning activities.
The study of VCE Accounting provides students with opportunity to engage in a range of different learning activities. In addition to demonstrating an understanding and a mastery of the content and skills specific to the study, students should also develop employability skills through these learning activities.
The nationally agreed employability skills* are: Communication; Planning and organising; Teamwork; Problem solving; Self-management; Initiative and enterprise; Technology; and Learning.
The VCE Accounting study design will provide the following opportunities to develop these skills:
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Unit 1: Area of Study 1 The role of accounting |
Employability skills selected facets
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Case study analysis |
Communication - writing to the needs of the audience; reading independently; sharing information; speaking clearly and directly; application of numeracy
Problem solving - testing of assumptions; taking account of data context and its circumstances, attention to detail, ensuring accuracy within financial records and reports
Self management - development of a knowledge base and self confidence in personal ideas and vision; articulation of personal ideas and vision
Technology - use of ICT to organise data; ability to learn and apply new ICT skills
Initiative and enterprise - generation of a range of options; initiation of innovative ideas |
Structured questions |
Communication - to read independently; effective writing to the needs of an audience; application of numeracy skills
Planning and organisation - collection, analysis and organisation of information; time management and prioritisation
Problem solving - testing of assumptions; taking account of data context and its circumstances, attention to detail, ensuring accuracy within financial records and reports
Technology - use of ICT to organise data; ability and willingness to learn new ICT skills
Initiative and enterprise - generation of a range of options; initiation of innovation
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Folio of exercises |
Communication – writing to the needs of an audience; application of numeracy
Problem Solving (testing assumptions taking the context of data and circumstances into account; applying a range of strategies to problem solving)
Initiative and enterprise (generating a range of options)
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Short-answer responses |
Communication (writing to the needs of the audience)
Planning and organising (collecting, analysing and organising information)
Problem Solving (applying a range of strategies)
Self management (articulating own ideas and visions)
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Written reflection |
Communication (listening and understanding; reading independently)
Problem Solving (developing creative, innovative solutions)
Self management (having knowledge and confidence in own ideas and visions; articulating own ideas and visions; evaluating and monitoring own performance)
Learning (managing own learning)
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Presentation (oral, multimedia) |
Communication (sharing information; speaking clearly and directly)
Technology (having a range of basic information technology skills; using information technology to organise data; being willing to learn new information technology skills)
Teamwork (coaching and mentoring skills including giving feedback)
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Dialogue (oral/written) |
Communication (sharing information; speaking clearly and directly; writing to the needs of the audience)
Planning and organising (collecting, analysing and organising information)
Teamwork (working as an individual and as a member of a team)
Problem solving (developing creative, innovative solutions)
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