Download Annotated Task

STAGE 1 ACCOUNTING
SKILLS AND APPLICATIONS TASK 1
Purpose
To demonstrate your
 understanding of accounting concepts, skills and practices related to the recording
and reporting of financial information using manual methods
 ability to analyse, interpret and accurately communicate financial information, using
appropriate and well-informed accounting terminology
 ability to use effective decision making skills using financial information.
Description of assessment
Write short answers to questions relating to the balance sheet, accounting equation,
liquidity, accounting assumptions and the regulatory framework.
In question 8 you will prepare a fully classified balance sheet and interpret the financial
information to comment on the liquidity of the business.
Remember to use appropriate accounting terminology.
Uses key words
and phrases from
the performance
standards to
demonstrate level
of student
achievement.
Assessment conditions
Closed book test done individually. Calculators permitted. Time - 50 minutes.
Learning Requirements
Assessment Design Criteria
1. Understand the role of
accounting in society
2. Record and report
financial information
using manual methods
as well as information
and communication
technologies
3. Apply the principles and
practices of recording
and reporting financial
information
4. Recognise and
understand financial
information for decisionmaking
5. Analyse, interpret, and
communicate financial
information using
accounting terminology
6. Apply effective decisionmaking skills using
financial and nonfinancial information
7. Recognise social, legal,
regulatory, and/or ethical
influences on financial
recording and decisionmaking.
Understanding
The specific features are as follows:

U1 Understanding of the role of accounting in society

U2 Recognition and understanding of financial information for
decision-making

U3 Recognition of social, legal, regulatory, and/or ethical
influences on financial recording and decision-making.
Analysis and Interpretation
The specific feature is as follows:

AI1 Analysis and interpretation of financial information using
appropriate accounting terminology.
Application
The specific features are as follows:

A1 Application of the principles and practices of recording and
reporting financial information

A2 Recording and reporting of financial information using
manual methods as well as information and communication
technologies

A3 Application of decision-making skills using financial and
non-financial information.
Communication
The specific features are as follows:

C1 Communication of appropriate financial information

C2 Use of appropriate accounting terminology.
Students may refer to the rubric provided over the page to identify the performance standards that they need to
demonstrate to reach their highest possible level of achievement.
Page 1 of 6
Stage 1 Accounting annotated task for use from 2011
769808432 (revised October 2010)
© SACE Board of South Australia 2010
Stage 1 Accounting
Skills and Applications Task 1
Balance Sheet
1. What is the purpose of the balance sheet?
2. State the accounting equation in two different forms.
3. A business has working capital ratio of 2:1. What does this mean?
4. A proprietor of a hardware store has a loan from the National Bank. The total
amount of the loan is $22,000. Of this amount $12,000 is expected to be paid
within the next year, with the remainder being paid in the following 12 months.
How should this loan be treated in a fully classified balance sheet?
5. Explain what is meant by transactions having a twofold effect on a balance
sheet. Use an example to help explain your answer.
Page 2 of 6
Stage 1 Accounting annotated task for use from 2011
769808432 (revised October 2010)
© SACE Board of South Australia 2010
6. In each of the following problems determine the owner’s equity in the business.
(a) Harris Hardware Store
Motor vehicles $12,000; Buildings $25,000; Cash at bank $4000
(b) Modor Music Shop
Inventory $11,200; Motor vehicles $32,000; Debtors $1500; Creditors
$4300
(c) Grey’s Newsagency
Cash in hand $600; Furniture $1400; Inventory $1250; Loan from K.
White $300; Debtors $1200; Creditors $1150; Bank overdraft $320
(d) Black’s Shoes
Inventory $44,000; Bank overdraft $2700; Vehicles $13,000; Creditors
$3250; Debtors $1350; Loan to G. Brown $140: Equipment $700



The increasing difficulty of each part of question 6 provides opportunities for students of varying
abilities to demonstrate their understanding and application of the ‘owner’s equity’ section of the
balance sheet.
6 (a) and (b) enables students to demonstrate their ability to apply their knowledge of owner’s equity
in a practical situation.
6 (c) and (d) provide opportunities for the student to demonstrate higher levels of understanding.
Page 3 of 6
Stage 1 Accounting annotated task for use from 2011
769808432 (revised October 2010)
© SACE Board of South Australia 2010
7. (a) Use the information on the following Balance Sheet to define the following
terms.
Balance Sheet of Heather’s Trinkets
As at 31st December 2005
ASSETS
LIABILITIES
Current
Bank
Debtors
Inventory
20 000
16 000
12 000
48 000
Current
Creditors
Loan (due 30/6/2006)
14 000
9 000
23 000
Non-current
Mortgage
Non-current
Machinery
Motor Vehicles
Office equipment
Premises
96 000
44 000
18 000
120 000
OWNER’S EQUITY
Capital
Add net profit
Less drawings
80 000
205 000
24 000
6 000
223 000
278 000
TOTAL EQUITIES
TOTAL ASSETS
 Debtors
326 000

Current Assets

Non-current Liabilities

Equities

Inventory
326 000
7 (b) provides the opportunity for students to demonstrate Analysis and
Interpretation at the highest level of the performance standards.
7
(b) Heather’s Trinkets are considering expanding their premises at a cost of
$200,000. How do you suggest they finance this expansion?
Page 4 of 6
Stage 1 Accounting annotated task for use from 2011
769808432 (revised October 2010)
© SACE Board of South Australia 2010
(a) Use the following information provided by ‘Hugh’s Renovations’ to
prepare a fully classified Balance Sheet.
8.
As at June 2007
Capital
100000
Equipment
30000
Creditors
1800
Cash on hand
300
Inventories
9000
Mortgage
55000
Bank overdraft 4230
Land & Buildings
120000
Vehicles
10000
Bank Loan (due 1/12/07)
5000
Drawings
2500
Debtors
1200
Question 8 provides an opportunity for the students to demonstrate their ability to produce
a highly accurate balance sheet in a practical context.
(b) Calculate the working capital ratio and comment on the liquidity of this
business.
9.
(a) What do accountants mean by historical costs?
(b) What do accountants assume about the life of a business? Why is this
done?
(c) Why is ‘consistency’ important in accounting?
(d) What is meant by the term verifiability and give an example of its use in
accounting.


This assessment begins with simple tasks such as recall of knowledge and understanding and
progresses to questions that allow for higher order responses.
This is a comprehensive end of semester assessment task designed for students who have
completed their study of all aspects of a fully classified balance sheet including analysis.
Page 5 of 6
Stage 1 Accounting annotated task for use from 2011
769808432 (revised October 2010)
© SACE Board of South Australia 2010
Performance Standards for Stage 1 Accounting
A
Understanding
Analysis and
Interpretation
Application
Communication
Comprehensive understanding of
the role of accounting in society.
Astute analysis and
interpretation of financial
information using
appropriate accounting
terminology.
Highly proficient application of the
principles and practices of recording
and reporting financial information.
Highly accurate communication of
appropriate and specific financial
information.
High degree of accuracy in the
recording and reporting of financial
information using manual methods
as well as information and
communication technologies.
Highly appropriate and wellinformed use of a range of
accounting terminology.
Astute and detailed recognition and
understanding of financial
information for decision-making.
Perceptive and well-informed
recognition of social, legal,
regulatory, and/or ethical influences
on financial recording and decisionmaking.
B
Detailed understanding of the role of
accounting in society.
Detailed recognition and
understanding of financial
information for decision-making.
Astute application of decision-making
skills using financial and nonfinancial information.
Well-considered analysis
and interpretation of
financial information using
appropriate accounting
terminology.
Well-informed recognition of social,
legal, regulatory, and/or ethical
influences on financial recording and
decision-making.
C
Appropriate understanding of the
role of accounting in society.
Appropriate recognition and
understanding of financial
information for decision-making.
Basic understanding of the role of
accounting in society.
Some recognition and
understanding of some financial
information for decision-making.
Considered analysis and
interpretation of financial
information using mostly
appropriate accounting
terminology.
Emerging awareness of the role of
accounting in society.
Emerging awareness of the purpose
of financial information for decisionmaking.
Limited recognition of a social, legal,
regulatory, or ethical influence on
financial recording and decisionmaking.
Page 6 of 6
Appropriate and well-informed use
of accounting terminology.
Competent application of the
principles and practices of recording
and reporting financial information.
Competent recording and reporting
of financial information using manual
methods as well as information and
communication technologies.
Competent communication of
appropriate financial information.
Generally appropriate and
informed use of accounting
terminology.
Appropriate application of decisionmaking skills using financial and nonfinancial information.
Some consideration and
basic use of financial
information using some
appropriate accounting
terminology.
Some recognition of one or more
social, legal, regulatory, and/or
ethical influences on financial
recording and decision-making.
E
Mostly accurate recording and
reporting of financial information
using manual methods as well as
information and communication
technologies.
Mostly accurate communication of
appropriate financial information.
Thoughtful application of decisionmaking skills using financial and nonfinancial information.
Informed recognition of social, legal,
regulatory, and/or ethical influences
on financial recording and decisionmaking.
D
Proficient application of the principles
and practices of recording and
reporting financial information.
Some basic application of one or
more principles and/or practices of
recording and reporting financial
information.
Communication of some basic
financial information.
Inconsistent use of some
accounting terminology.
Recording and reporting of some
basic financial information using
manual methods and/or information
and communication technologies.
Application of some basic decisionmaking skills using financial and nonfinancial information.
Attempted consideration
of simple financial
information with limited
use of appropriate
accounting terminology.
Few elements of application of one
or more of the principles or practices
of recording and reporting financial
information.
Attempted recording of aspects of
simple financial information using
manual methods or information and
communication technologies.
Limited communication of some
aspects of simple financial
information.
Attempted use of a limited range
of accounting terminology.
Limited application of any decisionmaking skills relevant to financial and
non-financial information.
Stage 1 Accounting annotated task for use from 2011
769808432 (revised October 2010)
© SACE Board of South Australia 2010