Level 7 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 7-1

Indicators

• Describes the accounting records maintained by an entity.
• Explains how interested parties make use of accounting information as a basis for decision making.
• Explains the limitations of financial statements.
• Explains the qualitative characteristics of accounting information.
• Explains the recognition criteria for financial elements.
• Explains the accounting concepts, by linking them to the financial elements.
• Describes how an entity safeguards its assets.
• Explains how the subsystems meet the entity’s objectives.
• Describes circumstances of ethical and unethical behavior that an entity may be exposed to.
• Explains 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.

• There has been a spate of shoplifting in your neighbourhood. Your best mate’s dad who owns an electronics store is very upset as his stock take figures do not match with the computer inventory records. Show him how he would account for the discrepancy.
• 'hEADbANGERs Anon' (a music store), comes to you for guidance on how to set up their accounting subsystems to record their first two month’s transactions.
• The local café owner 'Petra Panini' wants to know why it would be a good idea to bank takings daily. Send an email to answer her query.
• Your accounting teacher doesn’t particularly like teaching the accounting concepts. Create some innovative questions where each of the concepts is the answer.
• Create a pamphlet entitled ‘Qualitative characteristics for Dummies’ to be used at a seminar for new business owners.
• Play a game to guess who the interested user of the financial statements is using only yes/no questions.
• Bob wants to start a small business but is concerned that 80 percent of small businesses fail within their first three years. What strategies are available to avoid him becoming a statistic?
• 'Ricochet' squash club is concerned that takings from the bar are not as expected. Write a confidential report to the committee in which you outline the results of your investigation.
• The local mosque has a fair to celebrate end of Ramadan. Explain to the organisers why all proceeds need to banked intact.
• Billy has just entered into a civil union and wants to know the financial implications of taking a three month mortgage holiday. Write an e-mail to Billy to explain the issues he needs to consider before deciding on the mortgage holiday.
• Dealer Dave sells cheap imported cars. He understated his revenue in the current financial year. Explain why this is wrong.

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.

• AS91175 Accounting 2.2 Demonstrate understanding of accounting processing using accounting software; Internal, 4 credits.
• AS91176 Accounting 2.3 Prepare financial information for an entity that operates accounting subsystems; External, 5 credits.
• AS91177 Accounting 2.4 Interpret accounting information for entities that operate accounting subsystems; External, 4 credits.
• AS91481 Accounting 2.5 Demonstrate understanding of a contemporary accounting issue for decision making; Internal, 4 credits.
• AS91179 Accounting 2.6 Demonstrate understanding of an accounts receivable subsystem for an entity; Internal, 3 credits.
• AS91386 Accounting 2.7 Demonstrate understanding of an inventory subsystem for an entity; Internal, 3 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 7-2

'The hardest thing to understand in the world is the income tax.'

Albert Einstein

Indicators

• Processes transactions into journals and ledgers, including subsidiary ledgers, both manually and using a software package.
• Completes balance day adjustments and adjusted trial balance, closing entries and reversing entries.
• Demonstrates understanding of financial statement preparation, including accompanying notes, ensuring a true and fair view of the entity is reflected.
• Interprets accounting information for a small or medium entity that operates accounting sub-systems.
• Prepares a tax return for a sole trader.

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.

• Use a role play to demonstrate the information an accountant should communicate to a client after interpreting their financial statements.
• Reconcile a veterinary practice’s accounts receivable at balance day.
• Demonstrate how a glazier would account for her bad and doubtful debts.
• The local lighting retailer currently operates a manual accounting system. The accounting technician has been hit by a bus and you have been asked to process a list of transactions using computer software.
• The local lighting retailer was impressed with your previous work and has asked you to evaluate three accounting software packages that could be applicable to his business. He asks you to write a report and prepare a presentation for management recommending which package should be purchased.
• A local film production company has experienced delays. The budget is tight. You have been asked you to prepare a Projected Income Statement, (the producer knows your services are value-for-money).
• Your cousin’s wife’s brother has been caught making too much profit selling fish down at the wharf. He doesn’t have a clue about how to prepare his two-monthly GST return. HELP!

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.

• AS91175 Accounting 2.2 Demonstrate understanding of accounting processing using accounting software; Internal, 4 credits.
• AS91176 Accounting 2.3 Prepare financial information for an entity that operates accounting subsystems; External, 5 credits.
• AS91177 Accounting 2.4 Interpret accounting information for entities that operate accounting subsystems; External, 4 credits.
• AS91481 Accounting 2.5 Demonstrate understanding of a contemporary accounting issue for decision making; Internal, 4 credits.
• AS91179 Accounting 2.6 Demonstrate understanding of an accounts receivable subsystem for an entity; Internal, 3 credits.
• AS91386 Accounting 2.7 Demonstrate understanding of an inventory subsystem for an entity; Internal, 3 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 July 15, 2021

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