Level 6 accounting

Indicators

The purpose of indicators is to provide greater clarity in terms of expected depth and scope by providing examples of the kinds of behaviours and capabilities that a teacher might expect to observe in a student who is achieving at the appropriate level. Teachers can add further indicators if they wish.

Context elaborations

Context elaborations are possible contexts for learning, with a suggestion of how they might be used with the focus learning objective.

The listed context elaborations are examples only. Teachers can select and use entirely different contexts in response to local situation, community relevance, and students’ interests and needs.

Learning objective 6-1

'A budget tells us what we can't afford, but it doesn't keep us from buying it.'

William Feather

Indicators

• Describes who uses accounting information and recognises their financial needs.
• Explains the purpose and components of financial statements.
• Explains the concepts used in the preparation of financial statements.
• Explains the purpose and components of financial documents for a whānau.
• Explains different methods of spending available to individuals, whānau, and small entities.
• Describes the cash controls that may exist in a small entity.
• Recognises circumstances of ethical and unethical behavior that small entities may be exposed to.
• Uses financial and non-financial information to support a specific decision.
• Describes the current and future implications of borrowing, saving, and making investments (including Kiwisaver).

Note: Checklists (Methods of spending; Concepts used in preparation of financial statements; Components of financial statements; Balance day adjustments) are provided as PDF files at the end of the section Considerations for planning learning programmes.

Possible context elaborations

Context elaborations are possible contexts for learning, with an indication of how they might be used in relation to the learning objectives concerned.

• You are setting up your own flat, explain what you would need to account for in your budget.
• The NZRFU approach you wanting to know if they can list the captain of the All Blacks as an asset.
• You work part time at the ‘long and luscious’ eyelash extension salon. Your gorgeous but financially challenged boss needs some advice on how to reconcile the cash journals/books with the monthly bank statement.
• You are heading off on a family holiday and dad uses the business credit card to pay for petrol. Explain why this transaction must be reported as drawings in the accounting records of dad’s business.
• You have found your ideal car on a website. Select a finance option to buy it.
• You are a committee member for a kohanga reo. Identify the fundraising options available for a new playground.
• Your sister has finally saved enough money for a deposit on a house. She is off to see the bank manager about a mortgage. Explain why preparing a Statement of Affairs and Proof of Earnings would help with this application.
• The local primary school had an overnight stay on your local marae. Explain to the elders what source documents are required to record this transaction.
• List all the assets, liabilities, income, and expenses for your dream business.
• Explore the running of a small business, for example, a small lawnmowing business.
  • You firstly buy a second-hand car for your business and immediately have to put in a new battery and buy two new tyres before you can drive it anywhere. Then you have to pay for insurance, and a few months later, a warrant of fitness and the annual registration, not to mention weekly petrol bills. Discuss the capital and revenue expenditure items associated with your new car.
  • When first recording the car in your lawnmowing business’ accounting records, you will apply which concept?
  • You finance the car with a loan from the bank. Explain why the loan is a liability of your lawnmowing business.
  • You work out the car should last you for eight years at least. Explain the depreciation expense this would represent each year.
  • You are very proud of your lawnmowing skills. You think you should be able to record them as an asset. Explain in terms of monetary measurement why this is not possible.
  • At the end of the year, you owe the garage for repairs to the car and three of your regular customers still owe you for mowing lawns. Explain how the accrual basis will be applied to these items when you prepare your lawnmowing business’ financial statements for the year.
  • You don’t plan to stop being a lawnmowing business as far as you can see. Explain the concept associated with this idea.
• Your soccer club is holding its AGM. How is period reporting applied to the financial statements you will receive at the AGM?
• You have inherited $10,000 from Aunt Matilda. You want to go on a shopping spree but your mother thinks the right thing to do is invest the money as Aunt Matilda worked hard to earn it. Investigate possible investment options to keep her off your back.
• You need money fast! You crashed your car whilst on a restricted licence after 10 pm. The insurance company won’t pay, so mum and dad have bailed you out. How are going you to raise money to repay them?
• Your dad is a member of the local unincorporated book club, which meets weekly for coffee and discussion. You are a member of the local incorporated soccer club. Explain the differences between these two community organisatons in relation to advantages, disadvantages, ownership, and liabilities for club debt.

Assessment for qualifications

Consider how student learning could be assessed using the accounting achievement standards. Consider alternative linkages between the achievement objective and achievement standards.

• AS90976 Accounting 1.1 Demonstrate understanding of accounting concepts for small entities; External, 3 credits.
• AS90981 Accounting 1.6 Make a financial decision for an individual or group; Internal, 3 credits.
• AS90982 Accounting 1.7 Demonstrate understanding of cash management for a small entity; Internal, 4 credits.

At the time of publication, achievement standards were in development to align them with The New Zealand Curriculum. Please ensure that you are using the correct version of the standards by going to the NZQA website.

The NZQA subject-specific resources pages are very helpful. From there, you can find all the achievement standards and links to assessment resources, both internal and external.

Learn more:

• NZQA: Accounting subject resources.

Aligned level 1 achievement standards were registered for use in 2011 and level 2 for use in 2012; level 3 will be registered for use in 2013.

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Learning objective 6-2

'Remind people that profit is the difference between revenue and expense. This makes you look smart.'

Scott Adams

Indicators

• Demonstrates how the accounting equation is used to process transactions.
• Completes source documents for a small entity that enable accurate capture of transactions.
• Demonstrates how transactions are processed into journals and posted to ledgers.
• Completes balance day adjustments and an adjusted trial balance.
• Demonstrates understanding of financial statement preparation in order to present a true and fair view of the entity.
• Demonstrates understanding of a cash budget to assist with decision making.
• Demonstates how a bank reconciliation process assists with cash management.
• Completes a tax return.
• Prepares financial information that aids decision making.
• Interprets accounting information.

Note: Checklists (Methods of spending; Concepts used in preparation of financial statements; Components of financial statements; Balance day adjustments) are provided as PDF files at the end of the section Considerations for planning learning programmes.

Possible context elaborations

Context elaborations are possible contexts for learning, with an indication of how they might be used in relation to the learning objectives concerned.

• Uncle John has just finished his electrical apprenticeship. You are a computer whiz. He has asked you to design the financial documents he will need to set up his business.
• Prepare a treasurer’s report for the annual general meeting of your local marae.
• Mum owns 'Style on a Budget' that sells up-market second-hand clothing. The business has really taken off in the last six months. Using her financial statements, help her decide whether to expand her business.
• Your mate has just received a $650 tax rebate and he only works part time! Using the IRD website see if you qualify and then fill in the necessary forms.
• Describe all the possible transactions that may arise in the money making venture you are using to fund your club soccer trip to Brazil.
• Help a dairy owner post the totals of her cash journals to the general ledger.
• Illustrate how a dentist would show the impact of their transactions on the accounting equation.
• Prepare an invoice for a tangata pūkenga (artist) for the sale of a pounamu that has been commissioned by Te Papa.
• Prepare a Statement of Financial Position for 'Oodles of Noodles' your local takeaway joint.

Assessment for qualifications

Consider how student learning could be assessed using the accounting achievement standards. Consider alternative linkages between the achievement objective and achievement standards.

• AS90976 Accounting 1.1 Demonstrate understanding of accounting concepts for small entities; External, 3 credits.
• AS90977 Accounting 1.2 Process financial transactions for a small entity; Internal, 5 credits.
• AS90978 Accounting 1.3 Prepare financial statements for sole proprietors; External, 5 credits.
• AS90979 Accounting 1.4 Prepare financial information for a community organisation’s annual general meeting; Internal, 4 credits.
• AS90980 Accounting 1.5 Interpret accounting information for sole proprietors; External, 4 credits.

At the time of publication, achievement standards were in development to align them with The New Zealand Curriculum. Please ensure that you are using the correct version of the standards by going to the NZQA website.

The NZQA subject-specific resources pages are very helpful. From there, you can find all the achievement standards and links to assessment resources, both internal and external.

Learn more:

• NZQA: Accounting subject resources 

Aligned level 1 achievement standards were registered for use in 2011 and level 2 for use in 2012; level 3 will be registered for use in 2013.

Last updated May 6, 2021

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