principles of accounts teaching and learning …
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PRINCIPLES OF ACCOUNTS TEACHING AND LEARNING SYLLABUS
Upper SecondaryExpress Course
Normal (Academic) Course
Implementation starting with 2020 Secondary Three Cohort
© 2020 Curriculum Planning and Development Division.This publication is not for sale. Permission is granted to reproduce this publication in its entirety for personal or non-commercial educational use only. All other rights reserved.
1
CONTENTS
Page1 INTRODUCTION
• Accounting and its Value in the 21st Century 3• Qualities of a Principles of Accounts Learner 3• 21st Century Competencies and National Education 4• Desired Outcomes of Education 5
2 CONTENT
• Design Considerations of Principles of Accounts 7• Syllabus Aims 7• Knowledge, Skills, Values and Attitudes 8• Content Frame 10• Content Outline 11• Content and MOE Initiatives 13• Content Amplification and Learning Outcomes 16
3 PEDAGOGY
• Pedagogical Practices 110• Nature of Accounting Knowledge 111• Strategies for Principles of Accounts 113
4 ASSESSMENT
• Purpose 118• Assessment Objectives 119• Assessment Specification Grid 119• Scheme of Assessment 120
AppendicesAppendix A: List of Formulae 121Appendix B: Formats of Financial Statements 123
SECTION 1:INTRODUCTION
• Accounting and its Value in the 21st Century
• Qualities of a Principles of Accounts Learner
• 21st Century Competencies and National Education
• Desired Outcomes of Education
3
1. INTRODUCTION
Accounting and its value in the 21st Century
Accounting is an information system based on generally accepted accounting principles. It involves recording and processing business transactions, and communicating this information to business owners and stakeholders. The accounting information is then used to evaluate business performance and facilitate decision-making.
The study of accounting helps students understand how businesses measure and communicate their performance, and make use of both accounting and non-accounting information related to their businesses to make decisions. Through the study of accounting, they will acquire transferrable skills such as organising and analysing information for decision-making, and apply these skills in their daily lives. Students will also understand the importance of values such as integrity and objectivity when communicating and making decisions.
Qualities of a Principles of Accounts Learner
Students learning Principles of Accounts will develop a keen eye for detail, an important attribute for accountants. Students will also learn to be organised and structured when they consolidate information into financial statements used by stakeholders for decision-making1. In addition, students will learn to use both accounting and non-accounting information to make decisions, and to become critical thinkers who solve problems and adapt to the evolving needs of stakeholders. We hope that students learning Principles of Accounts will develop these attributes, which will serve them well in the future.
1 More desired attributes of accountants can be found in the Skills Framework for Accountancy, ‘A Guide to Occupations and Skills’, developed by Skills Future Singapore, Workforce Singapore and in consultation with Singapore Accountancy Commission. More information can be found on www.skillsfuture.sg.
4
21st Century Competencies
Accounting helps students develop 21st century competencies (Figure 1) especially critical thinking and communication skills when they analyse information, make decisions based on it and present their decisions. Accounting also allows students to understand the importance of a common standard for accounting in the face of different cultural needs, global challenges and technological advancements in order to communicate results and make decisions.
Figure 1: 21st Century Competencies Framework
National Education
While the focus of Principles of Accounts is largely on the acquisition of the procedural knowledge of accounting due to age-appropriateness of content, there are opportunities for teachers to explore and deepen the National Education dispositions for citizenship. With the introduction of using scenarios to teach in class, teachers can weave in stories of local businesses to help students acquire a sense of reality, belonging and hope. Understanding the development of the accounting industry also helps students understand the impact of technological advancement on accounting and in Singapore and the less predictable world we are currently in. Sharing snippets of such business stories illustrating Singapore’s economic challenges from the past and present, contributes to students’ ability to engage with Singapore’s present and future issues with confidence, optimism and resilience.
5
See Section 2 for more details on the opportunities afforded for National Education through the syllabuses.
Desired Outcomes of Education
Every Principles of Accounts student can then embody the Desired Outcomes of Education as:• a confident person who has a strong sense of right and wrong, is adaptable and resilient, knows
him/herself, is discerning in judgment, thinks independently and critically, and communicateseffectively;
• a self-directed learner who takes responsibility for his/her own learning, who questions,reflects and perseveres in the pursuit of learning;
• an active contributor who is able to work effectively in teams, exercises initiative, takescalculated risks, is innovative and strives for excellence; and
• a concerned citizen rooted in Singapore, has a strong civic consciousness, is informed, andtakes an active part in bettering the lives of others around him/her.
SECTION 2:CONTENT
• Design Considerations of Principles of Accounts
• Syllabus Aims
• Knowledge, Skills, Values and Attitudes
• Content Frame
• Content Outline
• Content and MOE Initiatives
• Content Amplification and Learning Outcomes
7
2. CONTENT
Design Considerations of Principles of Accounts
There are two broad approaches to accounting education: the user and the preparer. The user approach focuses on learning how to use accounting information for decision-making, which accountants are increasingly required to do. Users are also expected to have sound knowledge of business-related information, and not just depend on accounting information to make decisions about the business. On the other hand, the preparer approach focuses on learning how to prepare and present accounting information, which is traditionally what accountants do.
The aim of a Principles of Accounts education is not to nurture work-ready graduates for the accounting profession and its related field, but to provide students with the foundational knowledge and skills to pursue any area of study or work in the future and to create interest and raise awareness of future pathways in accounting. This subject is not a pre-requisite for business-related courses in tertiary institutions. Students would thus not benefit if the syllabuses were to adopt either a wholly user or preparer approach. Instead, the syllabuses place emphasis on equipping upper secondary school students with age-appropriate and relevant accounting knowledge, skills and values from both the user and preparer approaches.
Syllabus Aims
The Principles of Accounts syllabuses seek to develop in students the knowledge and skills to prepare, communicate and use both accounting and non-accounting information related to the business for decision-making.
To understand the purpose of the information and how business activities are measured and presented, students will be equipped with the basic knowledge and skills to prepare and present accounting information and communicate them in a useful manner that can be understood by others.
By learning to become users of information, students understand:
• what business decisions are;• how decisions are made using accounting information;• the limitations of relying only on accounting information; and• the consideration of non-accounting information.
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Knowledge, Skills, Values and Attitudes
Table 1: Knowledge and understanding of Principles of Accounts
Express Normal (Academic)
The syllabus intends for students to develop knowledge and understanding of:
• the purpose of accounting as providingaccounting information to support andfacilitate decision-making;
• the consideration of accounting and non-accounting information in decision-making;
• the role of accountants and their ethicalvalues;
• the use of financial ratios to evaluatethe profitability, liquidity and efficiencyof inventory management and tradereceivables management;
• the basic forms of business entities;
• the elements of financial statements thatrepresent business activities and how theyare presented in financial statements;
• the principles underlying accounting as ameasurement system;
• the accounting information system andaccounting cycle, and the double-entrymethod of recording business activities and
• the internal controls to ensure accuracy ofinformation.
The syllabus intends for students to develop knowledge and understanding of:
• the purpose of accounting as providingaccounting information to support andfacilitate decision-making;
• the consideration of accounting and non-accounting information in decision-making;
• the role of accountants and their ethicalvalues;
• the elements of financial statements thatrepresent business activities and how theyare presented in financial statements;
• the principles underlying accounting as ameasurement system;
• the accounting information system andaccounting cycle, and the double-entrymethod of recording business activitiesand;
• the internal controls to ensure accuracy ofinformation.
9
Table 2: Skills developed through Principles of Accounts
Express Normal (Academic)
The syllabus intends for students to develop the skills of:
• applying the double entry system ofrecording business transactions;
• preparing accounting information in asuitable form;
• interpreting financial statementsand analysing the effects of businesstransactions and accounting adjustmentson financial statements;
• evaluating businesses for their profitability,liquidity and efficiency of inventorymanagement and trade receivablesmanagement;
• evaluating choices using both accountingand non-accounting information.
The syllabus intends for students to develop the skills of:
• applying the double entry system ofrecording business transactions;
• preparing accounting information in asuitable form;
• interpreting financial statementsand analysing the effects of businesstransactions and accounting adjustmentson financial statements; and
• evaluating choices using both accountingand non-accounting information.
Table 3: Values and attitudes developed through Principles of Accounts
Express Normal (Academic)
The syllabus intends for students to develop the values and attitudes of:
• integrity and objectivity;
• social responsibility, in the context ofaccounting and how it can affect users ofaccounting information; and
• being logical, methodical, consistent andaccurate.
The syllabus intends for students to develop the values and attitudes of:
• integrity and objectivity;
• social responsibility, in the context ofaccounting and how it can affect users ofaccounting information; and
• being logical, methodical, consistent andaccurate.
10
Content Frame
The content is framed by three key understandings (see Figure 2).
Key Understanding 1 aligns with the primary purpose of accounting and its place in society. Key Understandings 2 and 3 outline the accounting constructs and the accounting professional’s modes of thinking and doing in relation to business activities. All three share the core idea that financial numbers convey information about business activities. The value of learning Principles of Accounts lies in understanding how accounting information about business activities is derived and used.
Since the purpose of accounting is to provide information for decision-making, the way business activities are measured and represented (Key Understandings 2 and 3) is affected by the changing information needs of stakeholders (Key Understanding 1). The relationship between the three key understandings is illustrated in Figure 2.
Key Understanding 1:Accounting and non-accounting information are used to support and facilitate decision-
making.
Stakeholders require accounting and non-accounting information on business activities for decision-making, which in turn affect the business and its activities.
Accounting information serves specific needs.
Accounting practice changes as information needs change.
Key Understandings 2 and 3 define the accounting constructs.
Key Understanding 2:Accounting is a language used to
represent business activities.
Accounting is the language of business as it provides the concepts
and framework to represent business activities.
Key Understanding 3: Accounting is an information system to measure business
activities.
The accounting information system measures business activities by
identifying, recording, analysing and reporting accounting information.
Core Idea:Financial numbers are meaningfully related to
underlying business activities and to each other.
Figure 2: Conceptual Frame for key understandings
11
Content Outline
Key Understanding 1: Accounting and non-accounting information are used to support and facilitate decision-making.
This key understanding focuses on the relationship between business activities and its stakeholders. Stakeholders provide resources for the business, while the performance of business activities affects stakeholders’ decisions concerning the business. Stakeholders rely on accounting information generated by the accounting information system to make decisions. The stakeholders also use non-accounting information to make well-informed decisions and judgements.
This key understanding will cover the following:
Accounting and its role in Stakeholders’ Decision-Making Process 1.1 Roles of accounting and accountants1.2 Stakeholders and their decision-making needs
Analysis of Financial Statements for Decision-Making (not covered in N(A) syllabus)1.3 Financial statements analysis
1.3.1 Profitability1.3.2 Liquidity1.3.3 Efficiency
Key Understanding 2: Accounting is a language used to represent business activities.
Accounting is considered the language of business as it allows stakeholders to think about, discuss and evaluate business activities. This key understanding looks into how accounting acts as this language, and how it provides the concepts and framework to represent the physical flow of resources, and the performance and position of the business, by grouping the effects of business activities according to their characteristics.
Businesses 2.1 Types of businesses2.2 Forms of business ownerships (Not covered in N(A) syllabus)
Measurement and Presentation of Business Activities2.3 Elements of financial statements2.4 Accounting equation 2.5 Financial statements
2.5.1 Statement of Financial Position (N(A) syllabus excludes working capital and private limited company) 2.5.2 Statement of Financial Performance
2.6 Income and expenses2.6.1 Revenue and other income2.6.2 Cost of sales and other expenses
2.7 Assets2.7.1 Cash in hand and Cash at bank2.7.2 Inventories
12
2.7.3 Trade receivables 2.7.4 Non-current assets (N(A) syllabus excludes non-accounting information and sale
of non-current assets)2.8 Liabilities
2.8.1 Trade payables 2.8.2 Long-term borrowings (N(A) syllabus excludes calculation of interest)
2.9 Equities2.9.1 Capital and share capital (N(A) syllabus excludes share capital)2.9.2 Drawings2.9.3 Transfer of profit or loss for the year and retained earnings (N(A) syllabus excludes
retained earnings and dividends)
Correction of Errors2.10 Correction of errors
Key Understanding 3: Accounting is an information system to measure business activities.
This key understanding looks into how business activities and the physical flow of resources are quantified and measured in monetary value. When business activities and the flow of resources are expressed in a numerical form, it facilitates comparisons to be done, performance to be tracked and evaluations to be made. A reliable measurement system must be supported by an information system, that systematically collects, records and organises business economic activities into information.
Accounting Assumptions and Principles3.1 Accounting theories
Accounting Information System and Accounting Cycle3.2 Accounting information system and accounting cycle3.3 Understanding the double-entry recording system3.4 Internal controls
The main design features of this syllabus and their rationale are provided below.
Learning OutcomesThe learning outcomes stated in the syllabus will guide teachers in designing appropriate learning experiences and assessment tasks.
Sequence of Teaching and Learning Teachers need not cover the topics from the three key understandings in the order shown in the syllabus, as long as students develop deep meaningful understanding of the material.
13
Cont
ent a
nd M
OE
Initi
ative
s
The
teac
hing
and
lear
ning
of 2
1st
Cent
ury
Com
pete
ncie
s an
d N
ation
al E
duca
tion
will
tak
e pl
ace
thro
ugh
the
tota
l cur
ricu
lum
. How
ever
, do
note
th
at n
ot a
ll su
bjec
ts a
nd p
rogr
amm
es a
re w
ell s
uite
d to
this
pur
pose
. In
Prin
cipl
es o
f Acc
ount
s, c
erta
in to
pics
in K
ey U
nder
stan
ding
s 1
and
2 le
nd
them
selv
es b
etter
to
the
teac
hing
of
21st
Cen
tury
Com
pete
ncie
s an
d N
ation
al E
duca
tion
than
tho
se in
Key
Und
erst
andi
ng 3
. The
se t
opic
s ar
e hi
ghlig
hted
in th
e ta
ble
belo
w.
Tabl
e 4:
Pri
ncip
les
of A
ccou
nts
and
MO
E in
itiati
ves
Key
Und
erst
andi
ngKn
owle
dge,
Ski
lls a
nd V
alue
s21
st C
entu
ry C
ompe
tenc
ies
Nati
onal
Edu
cati
onLe
arni
ng E
xper
ienc
e
Key
Und
erst
andi
ng 1
: A
ccou
nting
and
non
-ac
coun
ting
info
rmati
on
is u
sed
to s
uppo
rt a
nd
faci
litat
e de
cisi
on-m
akin
g.
Know
ledg
e•
the
use
of fi
nanc
ial r
atios
to
eva
luat
e pr
ofita
bilit
y,
liqui
dity
and
effi
cien
cy o
f in
vent
ory
man
agem
ent
and
trad
e re
ceiv
able
s m
anag
emen
tSk
ill•
eval
uatin
g bu
sine
sses
for
thei
r pr
ofita
bilit
y, li
quid
ity
and
effici
ency
of i
nven
tory
an
d tr
ade
rece
ivab
les
man
agem
ent
Val
ues
• in
tegr
ity
and
obje
ctivi
ty
Civi
c Li
tera
cy, G
loba
l A
war
enes
s an
d Cr
oss
Cult
ural
Ski
llsLe
arni
ng O
utco
me:
A
ctive
ly c
ontr
ibut
es t
o th
e co
mm
unit
y an
d na
tion,
po
sses
ses
an a
war
enes
s of
an
d th
e ab
ility
to
anal
yse
glob
al is
sues
and
tre
nds,
an
d di
spla
ys s
ocio
-cul
tura
l an
d re
ligio
us s
ensi
tivit
y an
d aw
aren
ess.
CGC
2A
war
e of
glo
bal i
ssue
s an
d tr
ends
2.1d
The
stud
ent
is a
ble
to
dem
onst
rate
aw
aren
ess
of
how
glo
bal i
ssue
s im
pact
re
latio
ns b
etw
een
vari
ous
coun
trie
s.CG
C 3
Dis
play
s so
cio-
cult
ural
and
re
ligio
us s
ensi
tivit
y an
d aw
aren
ess
3.1d
The
stud
ent
is a
ble
to
Stud
ents
dev
elop
:A
sen
se o
f rea
lity
whe
n th
ey•
show
aw
aren
ess
of
and
unde
rsta
ndin
g of
Si
ngap
ore’
s co
nstr
aint
s,
and
vuln
erab
ilitie
s in
the
pa
st; a
nd•
mak
e co
nnec
tions
wit
h th
e co
ntem
pora
ry
real
ities
tha
t co
nfro
nt
us a
s a
coun
try
agai
nst
the
back
drop
of a
less
pr
edic
tabl
e w
orld
.
A s
ense
of b
elon
ging
whe
n th
ey•
deve
lop
an a
ttitu
de o
f op
enne
ss t
o ac
cept
oth
ers
diff
eren
t fr
om t
hem
and
• pr
oacti
vely
con
trib
ute
and
wor
k on
impr
ovin
g ou
r liv
es a
nd t
he li
ves
of
othe
rs a
roun
d th
em.
A s
ense
of h
ope
whe
n th
ey•
disp
lay
confi
denc
e an
d op
timis
m in
Sin
gapo
re’s
Stud
ents
und
erst
and
the
impa
ct o
f glo
bal i
ssue
s an
d tr
ends
on
a bu
sine
ss t
hrou
gh
the
cons
ider
ation
of n
on-
acco
untin
g in
form
ation
tha
t ca
n aff
ect
its
perf
orm
ance
an
d de
cisi
ons.
For
inst
ance
, w
hen
intr
oduc
ing
the
non-
acco
untin
g in
form
ation
re
late
d to
the
eco
nom
y of
th
e co
untr
y th
e bu
sine
ss
is in
, tea
cher
s ca
n br
ing
in
Sing
apor
e’s
past
and
pre
sent
ec
onom
ic c
ondi
tions
and
ho
w it
aff
ecte
d bu
sine
sses
an
d th
eir
deci
sion
s.
Thro
ugh
disc
ussi
ons
abou
t re
al b
usin
ess
scen
ario
s in
cl
ass,
stu
dent
s be
com
e aw
are
of t
he c
halle
nges
tha
t bu
sine
sses
face
bot
h in
and
ou
t of
Sin
gapo
re. S
tude
nts
lear
n ho
w t
hese
bus
ines
ses
over
com
e th
eir
chal
leng
es.
Shar
ing
how
loca
l bus
ines
ses
Key
Und
erst
andi
ng 2
: A
ccou
nting
is a
lang
uage
us
ed t
o re
pres
ent
busi
ness
ac
tiviti
es.
Know
ledg
e•
the
cons
ider
ation
of
acco
untin
g an
d no
n-ac
coun
ting
info
rmati
on in
de
cisi
on-m
akin
g; a
nd•
the
elem
ents
of fi
nanc
ial
stat
emen
ts t
hat
repr
esen
t bu
sine
ss a
ctivi
ties
and
how
the
y ar
e pr
esen
ted
14
Key
Und
erst
andi
ngKn
owle
dge,
Ski
lls a
nd V
alue
s21
st C
entu
ry C
ompe
tenc
ies
Nati
onal
Edu
cati
onLe
arni
ng E
xper
ienc
e
Skill
•pr
epar
ing
acco
untin
gin
form
ation
in a
sui
tabl
efo
rm; a
nd•
eval
uatin
g ch
oice
s us
ing
both
acc
ounti
ng a
nd n
on-
acco
untin
g in
form
ation
Val
ues
•in
tegr
ity
and
obje
ctivi
ty
dem
onst
rate
app
ropr
iate
so
cio-
cult
ural
ski
lls a
nd
beha
viou
r to
wor
k to
geth
er
wit
h ot
hers
from
div
erse
so
cio-
cult
ural
gro
ups
wit
hin
Sing
apor
e an
d be
yond
.
Criti
cal a
nd In
venti
ve
Thin
king
Lear
ning
Out
com
e:
Indi
vidu
ally
and
co
llabo
rativ
ely
gene
rate
s no
vel a
nd u
sefu
l ide
as to
ad
dres
s is
sues
; exe
rcis
es
soun
d re
ason
ing,
and
m
etac
ogni
tion
to m
ake
good
de
cisi
ons;
and
man
ages
co
mpl
exiti
es a
nd a
mbi
guiti
es.
CIT
1Ex
plor
es p
ossi
biliti
es a
nd
gene
rate
s id
eas.
1.1d
The
stud
ent i
s ab
le to
ge
nera
te id
eas
and
expl
ore
diffe
rent
pat
hway
s th
at le
ad
to s
oluti
ons.
CIT
2 Ex
erci
ses
soun
d re
ason
ing
and
deci
sion
-mak
ing.
2.1d
The
stud
ent i
s ab
le to
use
ev
iden
ce a
nd a
dopt
diff
eren
t vi
ewpo
ints
to e
xpla
in
his/
her
reas
onin
g an
d de
cisi
ons,
hav
ing
cons
ider
ed
the
impl
icati
ons
of th
e re
latio
nshi
p am
ong
diffe
rent
vi
ewpo
ints
.
futu
re, a
nd r
esili
ence
to
face
the
cha
lleng
es a
head
;•
e mbr
ace
the
prin
cipl
esw
e va
lue
as S
inga
pore
ans
(e.g
, sel
f-de
term
inati
on,
mul
ti-r
acia
lism
); an
d•
feel
em
pow
ered
to
seek
opp
ortu
nitie
s in
chal
leng
es, b
elie
ving
tha
tSi
ngap
ore
is t
heir
hom
e,re
gard
less
of w
here
the
ym
ay li
ve
over
com
e th
eir
chal
leng
es
incr
ease
s st
uden
ts’
awar
enes
s of
the
chal
leng
es
Sing
apor
e fa
ces
and
build
s th
eir
resi
lienc
e in
faci
ng
the
futu
re. S
tude
nts
will
al
so le
arn
the
impo
rtan
ce
of s
eeki
ng o
ppor
tuni
ties
to o
verc
ome
chal
leng
es b
y st
udyi
ng h
ow th
ese
loca
l bu
sine
sses
inno
vate
and
sei
ze
oppo
rtun
ities
to d
o be
tter
.
Stud
ents
lear
n to
be
sens
itive
to
war
ds c
lass
mat
es fr
om
diff
eren
t soc
io-c
ultu
ral
and
raci
al b
ackg
roun
ds,
and
to w
ork
with
them
du
ring
gro
up d
iscu
ssio
ns
and
task
s. T
his
expe
rien
ce
will
enc
oura
ge th
em to
em
brac
e m
ulti-
raci
alis
m.
They
lear
n to
com
mun
icat
e th
eir
pers
pecti
ves
and
be
open
to th
ose
diff
eren
t fro
m
thei
r ow
n w
hen
they
hav
e to
com
e to
a c
onse
nsus
. Th
ey a
lso
lear
n to
con
side
r ot
her
peop
le’s
opi
nion
s an
d re
asse
ss th
eir
own
pers
pecti
ves.
Whe
n st
uden
ts w
eigh
the
optio
ns o
pen
to a
bus
ines
s,
they
lear
n to
rea
son
and
mak
e de
cisi
ons
base
d on
bo
th a
ccou
nting
and
15
Key
Und
erst
andi
ngKn
owle
dge,
Ski
lls a
nd V
alue
s21
st C
entu
ry C
ompe
tenc
ies
Nati
onal
Edu
cati
onLe
arni
ng E
xper
ienc
e
2.2d
The
stud
ent i
s ab
le to
su
spen
d ju
dgm
ent,
reas
sess
co
nclu
sion
s an
d co
nsid
er
alte
rnati
ves
to re
fine
his/
her
th
ough
ts, a
ttitu
des,
beh
avio
ur
and
actio
ns.
Com
mun
icati
on,
Colla
bora
tion
and
In
form
ation
Ski
llsLe
arni
ng O
utco
me:
Co
mm
unic
ates
info
rmati
on
and
idea
s cl
earl
y an
d co
llabo
rate
s eff
ectiv
ely;
m
anag
es, c
reat
es a
nd s
hare
s in
form
ation
tho
ughtf
ully
, et
hica
lly a
nd r
espo
nsib
ly.
CCI 2
Man
ages
, cre
ates
and
sh
ares
dig
ital
info
rmati
on
thou
ghtf
ully
, eth
ical
ly a
nd
resp
onsi
bly
2.1d
The
stud
ent
is a
ble
to
inte
grat
e in
form
ation
from
a
vari
ety
of s
ourc
es t
o co
mpl
ete
a ta
sk.
2.2c
The
stud
ent
is a
ble
to
expl
ain/
prov
ide
the
ratio
nale
for
the
ethi
cal u
se
of in
form
ation
and
mak
e in
form
ed c
hoic
es/
a st
and
for
him
self/
hers
elf o
n th
e et
hica
l han
dlin
g an
d us
e of
in
form
ation
.
non-
acco
untin
g in
form
ation
. In
the
pro
cess
, the
y un
ders
tand
tha
t de
cisi
on-
mak
ing
is c
ompl
ex a
nd le
arn
to e
xplo
re p
ossi
biliti
es a
nd
gene
rate
idea
s.
Stud
ents
lear
n th
e im
port
ance
of i
nteg
rity
and
ob
jecti
vity
whe
n pr
epar
ing
acco
untin
g in
form
ation
. Th
ey a
lso
unde
rsta
nd t
he
impo
rtan
ce o
f obj
ectiv
ity
whe
n us
ing
both
acc
ounti
ng
and
non-
acco
untin
g in
form
ation
in d
ecis
ion-
mak
ing.
16
Tabl
e 5:
Con
tent
Am
plifi
catio
n an
d Le
arni
ng O
utco
mes
for
Expr
ess
cour
se
Key
Und
erst
andi
ng 1
: Acc
ounti
ng a
nd n
on-a
ccou
nting
info
rmati
on a
re u
sed
to s
uppo
rt a
nd fa
cilit
ate
deci
sion
-mak
ing
Stak
ehol
ders
req
uire
acc
ounti
ng a
nd n
on-a
ccou
nting
info
rmati
on o
n bu
sine
ss a
ctivi
ties
for
deci
sion
-mak
ing,
whi
ch in
turn
aff
ects
the
busi
ness
and
its
activ
ities
.
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
1.1
Role
s of
acc
ounti
ng a
nd a
ccou
ntan
ts
1) W
hat
is a
ccou
nting
?
2) W
hat
are
the
role
s of
acc
ounti
ng a
nd
acco
unta
nts?
3) H
ow d
o ac
coun
tant
s fu
lfil t
heir
rol
es?
Cont
extu
al•
Busi
ness
env
iron
men
tRo
le o
f acc
ounti
ng•
Acc
ounti
ng p
rovi
des
acco
untin
g in
form
ation
for
deci
sion
-mak
ing
by
busi
ness
ow
ners
and
oth
er s
take
hold
ers
Role
of a
ccou
ntan
ts•
Thro
ugh
prov
idin
g ac
coun
ting
info
rmati
on fo
r st
akeh
olde
rs’ d
ecis
ion-
mak
ing,
acc
ount
ants
act
as
stew
ards
of
busi
ness
es
• Th
ey s
et u
p th
e ac
coun
ting
info
rmati
on
syst
em to
col
late
, rec
ord,
org
anis
e an
d re
port
acc
ounti
ng in
form
ation
so
that
ow
ners
and
oth
er s
take
hold
ers
can
mak
e de
cisi
ons
rega
rdin
g th
e m
anag
emen
t of
res
ourc
es a
nd th
e pe
rfor
man
ce o
f bu
sine
sses
•
They
thin
k cr
itica
lly, s
olve
pro
blem
s,
adap
t an
d m
eet
the
need
for
• st
ate
the
role
of a
ccou
nting
• st
ate
the
role
of a
ccou
ntan
ts
• de
fine
inte
grit
y an
d ob
jecti
vity
• ex
plai
n th
e im
port
ance
of h
avin
g in
tegr
ity
and
obje
ctivi
ty in
pre
pari
ng a
nd
pres
entin
g ac
coun
ting
info
rmati
on
17
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
soph
istic
ated
acc
ounti
ng a
nd b
usin
ess
info
rmati
on•
In th
e fa
ce o
f an
evol
ving
bus
ines
s en
viro
nmen
t and
rapi
d te
chno
logi
cal
adva
ncem
ent,
acco
unta
nts
have
to p
rovi
de
rele
vant
info
rmati
on in
a ti
mel
y m
anne
r for
de
cisi
on-m
akin
g an
d in
sigh
ts th
at a
re e
asily
an
d ap
prop
riate
ly u
nder
stoo
d by
ow
ners
an
d ot
her s
take
hold
ers
base
d on
acc
ounti
ng
theo
ries
• St
akeh
olde
rs p
lace
trus
t in
the
info
rmati
on
prov
ided
by
acco
unta
nts
who
mus
t adh
ere
to p
rofe
ssio
nal e
thic
s, u
phol
d in
tegr
ity a
nd
be o
bjec
tive
(1)(2
)-
inte
grity
is b
eing
str
aigh
tfor
war
d an
d ho
nest
in a
ll pr
ofes
sion
al a
nd b
usin
ess
rela
tions
hips
-
obje
ctivi
ty is
not
letti
ng b
ias,
con
flict
of
inte
rest
or u
ndue
influ
ence
of o
ther
s to
ov
errid
e pr
ofes
sion
al ju
dgm
ent
Not
es(1
) In
clud
es o
nly
the
effec
ts o
f une
thic
al
beha
viou
r on
deci
sions
mad
e by
st
akeh
olde
rs; t
he le
gal c
onse
quen
ces
of
unet
hica
l beh
avio
ur a
re n
ot re
quire
d(2
) In
the
Insti
tute
of S
inga
pore
Cha
rter
ed
Acco
unta
nts’
Cod
e of
Pro
fess
iona
l Con
duct
an
d Et
hics
, the
firs
t tw
o pr
inci
ples
are
in
tegr
ity a
nd o
bjec
tivity
18
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
1.2
Stak
ehol
ders
and
the
ir d
ecis
ion-
mak
ing
need
s
1) W
ho is
inte
rest
ed
in a
ccou
nting
in
form
ation
?
2) W
hat
kind
s of
in
form
ation
do
stak
ehol
ders
nee
d fo
r de
cisi
on-m
akin
g?
3) W
hy d
o st
akeh
olde
rs
need
bot
h ac
coun
ting
and
non-
acco
untin
g in
form
ation
?
Cont
extu
al•
Busi
ness
env
iron
men
t
Conc
eptu
al•
Rele
vanc
e of
in
form
ation
• A
ccou
nting
and
no
n-ac
coun
ting
info
rmati
on
Stak
ehol
ders
• U
sers
of a
ccou
nting
and
non
-acc
ounti
ng
info
rmati
on o
f a b
usin
ess
for
deci
sion
m
akin
g
Acc
ounti
ng a
nd n
on-a
ccou
nting
info
rmati
on•
Mak
ing
deci
sion
s w
ith
only
acc
ounti
ng
info
rmati
on m
ay c
ause
sta
keho
lder
s to
le
ave
out
impo
rtan
t bu
sine
ss-r
elat
ed
fact
ors
that
are
not
sho
wn
in fi
nanc
ial
stat
emen
ts b
ut m
ay a
ffec
t de
cisi
ons
- ac
coun
ting
info
rmati
on r
efer
s to
in
form
ation
usu
ally
gen
erat
ed b
y th
e ac
coun
ting
info
rmati
on s
yste
m a
nd is
la
rgel
y ex
trac
ted
from
jour
nals
, led
ger
acco
unts
and
fina
ncia
l sta
tem
ents
(in
clud
ing
finan
cial
rati
os)
- no
n-ac
coun
ting
info
rmati
on (3
) ref
ers
to th
e in
form
ation
abo
ut th
e op
erati
on
of a
bus
ines
s no
t fo
und
in jo
urna
ls,
ledg
er a
ccou
nts
or fi
nanc
ial s
tate
men
ts
Not
es(3
) Ref
er to
sec
tions
2.2
, 2.7
.2 to
2.7
.4, a
nd
2.8.
1 fo
r th
e sp
ecifi
c no
n-ac
coun
ting
info
rmati
on fo
r th
is s
ylla
bus
• st
ate
the
stak
ehol
ders
who
are
inte
rest
ed
in th
e aff
airs
of t
he b
usin
ess
and
mak
e us
e of
the
acco
untin
g in
form
ation
for
deci
sion
-mak
ing
• st
ate
exam
ples
of a
ccou
nting
info
rmati
on
need
ed b
y st
akeh
olde
rs o
f a b
usin
ess
for
deci
sion
-mak
ing
• st
ate
exam
ples
of n
on-a
ccou
nting
in
form
ation
nee
ded
by o
wne
rs a
nd
man
ager
s of
a b
usin
ess
for
deci
sion
- m
akin
g
• ex
plai
n w
hy s
take
hold
ers
of a
bus
ines
s ar
e in
tere
sted
in a
ccou
nting
info
rmati
on
• ex
plai
n w
hy o
wne
rs a
nd m
anag
ers
of a
bu
sine
ss a
re in
tere
sted
in n
on-a
ccou
nting
in
form
ation
19
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
1.3
Fina
ncia
l sta
tem
ents
ana
lysi
sTh
is s
ectio
n lo
oks
at h
ow b
usin
esse
s m
ake
com
pari
sons
aga
inst
them
selv
es o
r on
e ot
her
busi
ness
ove
r a
peri
od o
f tim
e, u
sing
bot
h ab
solu
te
valu
es a
nd fi
nanc
ial r
atios
to m
ake
deci
sion
s.
1.3.
1 Pr
ofita
bilit
y
1) W
hat
is fi
nanc
ial
stat
emen
ts a
naly
sis?
2) H
ow d
oes
a bu
sine
ss
mea
sure
and
ana
lyse
it
s ab
ility
to e
arn
profi
ts?
Cont
extu
alBu
sine
sses
nee
d to
as
sess
per
form
ance
Conc
eptu
al•
Profi
tabi
lity
• Tr
end
of v
alue
s ov
er
time
• Co
mpa
riso
n of
val
ues
agai
nst
one
othe
r bu
sine
ss•
Rele
vanc
e of
in
form
ation
Proc
edur
alCo
mpu
tatio
n of
pr
ofita
bilit
y ra
tios
• M
easu
res
the
abili
ty o
f a b
usin
ess
to e
arn
reve
nue
and
man
age
expe
nses
• Im
port
ance
of b
eing
pro
fitab
le in
its
trad
ing
activ
ities
• Im
port
ance
of b
eing
pro
fitab
le a
s a
who
le
busi
ness
•
Cons
eque
nces
of n
ot b
eing
pro
fitab
le in
it
s tr
adin
g ac
tiviti
es•
Cons
eque
nces
of n
ot b
eing
pro
fitab
le a
s a
who
le b
usin
ess
Ana
lysi
s of
abs
olut
e va
lues
(4)
• A
naly
sing
the
com
pone
nts
of g
ross
pr
ofit/
loss
suc
h as
net
sal
es r
even
ue a
nd
cost
of s
ales
•
Ana
lysi
ng th
e co
mpo
nent
s of
pro
fit/l
oss
for
the
year
suc
h as
net
sal
es r
even
ue,
serv
ice
fee
reve
nue,
cos
t of
sal
es, g
ross
pr
ofit
and
expe
nses
•
Com
pari
ng s
ales
rev
enue
, ser
vice
fee
reve
nue,
cos
t of
sal
es, g
ross
pro
fit/l
oss,
ex
pens
es a
nd p
rofit
/los
s fo
r th
e ye
ar
acro
ss a
max
imum
of t
hree
fina
ncia
l yea
rs
• ex
plai
n th
e im
port
ance
of b
eing
pr
ofita
ble
Ana
lysi
s of
abs
olut
e va
lues
• an
alys
e th
e gr
oss
profi
t/lo
ss a
nd p
rofit
/lo
ss fo
r th
e ye
ar
• in
terp
ret
sale
s re
venu
e, c
ost
of s
ales
, gr
oss
profi
t/lo
ss a
nd p
rofit
/los
s fo
r th
e ye
ar a
cros
s a
max
imum
of t
hree
fina
ncia
l ye
ars
• ev
alua
te th
e pr
ofita
bilit
y of
bus
ines
ses
from
the
tren
d of
sal
es r
even
ue, s
ervi
ce
fee
reve
nue,
cos
t of
sal
es, g
ross
pro
fit/
loss
and
pro
fit/l
oss
for
the
year
acr
oss
a m
axim
um o
f thr
ee fi
nanc
ial y
ears
• re
com
men
d m
eans
to im
prov
e gr
oss
profi
t/lo
ss a
nd p
rofit
/los
s fo
r th
e ye
ar
Ana
lysi
s of
rati
os•
stat
e an
d ca
lcul
ate
the
profi
tabi
lity
ratio
s
• in
terp
ret
profi
tabi
lity
ratio
s ac
ross
a
20
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
• A
naly
sing
the
tren
d of
fina
ncia
l figu
res
acro
ss ti
me
with
resp
ect t
o th
e gi
ven
scen
ario
and
thei
r im
plic
ation
s fo
r th
e bu
sine
ss•
Ana
lysi
ng th
e pr
obab
le re
ason
s fo
r ch
ange
s in
abs
olut
e va
lues
suc
h as
net
sa
les
reve
nue,
ser
vice
fee
reve
nue
and
cost
of s
ales
and
the
impl
icati
ons
of s
uch
chan
ges
for
the
busi
ness
•
Impr
ovin
g gr
oss
profi
t/lo
ss a
nd/o
r pr
ofit/
loss
for
the
year
with
resp
ect t
o th
e gi
ven
scen
ario
• M
ay in
clud
e pr
esen
tatio
n of
figu
res
in, o
r in
an
extr
act o
f, th
e St
atem
ent o
f Fin
anci
al
Perf
orm
ance
Ana
lysi
s of
rati
os•
Und
erst
andi
ng a
nd c
ompu
ting
the
profi
tabi
lity
ratio
s:
(i)
gro
ss p
rofit
mar
gin
(ii)
mar
k-up
on
cost
(iii)
profi
t mar
gin
(iv)
retu
rn o
n eq
uity
• U
nder
stan
ding
the
rela
tions
hip
betw
een
gros
s pr
ofit m
argi
n an
d pr
ofit m
argi
n.
• Co
mpa
ring
profi
tabi
lity
ratio
s ac
ross
a
max
imum
of t
hree
fina
ncia
l yea
rs o
r ag
ains
t one
oth
er b
usin
ess
• A
naly
sing
the
tren
d of
rati
os a
cros
s tim
e an
d ag
ains
t one
oth
er b
usin
ess
with
re
spec
t to
the
give
n sc
enar
io a
nd th
eir
impl
icati
ons
for
the
busi
ness
max
imum
of t
hree
fina
ncia
l yea
rs o
r ag
ains
t on
e ot
her
busi
ness
• ev
alua
te th
e pr
ofita
bilit
y of
bus
ines
ses
from
the
tren
d of
pro
fitab
ility
rati
os
acro
ss a
max
imum
of t
hree
fina
ncia
l yea
rs
or a
gain
st o
ne o
ther
bus
ines
s
• re
com
men
d m
eans
to im
prov
e pr
ofita
bilit
y ra
tios
21
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
• A
naly
sing
the
prob
able
rea
sons
for
chan
ges
in r
atios
and
the
impl
icati
ons
of
such
cha
nges
for
the
busi
ness
•
Impr
ovin
g th
e pr
ofita
bilit
y ra
tios
wit
h re
spec
t to
the
give
n sc
enar
io
Not
es(4
) A
naly
sis
at th
e un
it c
ost
leve
l is
not
requ
ired
1.3.
2 Li
quid
ity
1) H
ow d
oes
a bu
sine
ss
mea
sure
and
ana
lyse
it
s ab
ility
to m
eet
curr
ent
liabi
lities
?
Cont
extu
alBu
sine
sses
nee
d to
as
sess
liqu
idit
y
Conc
eptu
al•
Liqu
idit
y•
Tren
d of
val
ues
over
tim
e•
Com
pari
son
of v
alue
s ag
ains
t on
e ot
her
busi
ness
• Re
leva
nce
of
info
rmati
on
Proc
edur
alCo
mpu
tatio
n of
liq
uidi
ty r
atios
• Li
quid
ity
mea
sure
s th
e ab
ility
of a
bu
sine
ss to
mee
t it
s sh
ort-
term
fina
ncia
l ob
ligati
ons
• Im
port
ance
of b
eing
liqu
id
• Co
nseq
uenc
es o
f not
bei
ng li
quid
• D
iffer
ence
s be
twee
n liq
uidi
ty a
nd
profi
tabi
lity
Ana
lysi
s of
abs
olut
e va
lues
• U
nder
stan
ding
and
com
putin
g w
orki
ng
capi
tal
• A
naly
sing
the
com
pone
nts
of w
orki
ng
capi
tal a
nd m
eans
of i
mpr
ovem
ent
• Co
mpa
ring
wor
king
cap
ital
, tot
al c
urre
nt
asse
ts o
r it
s co
mpo
nent
s, a
nd to
tal
curr
ent
liabi
lities
or
its
com
pone
nts
acro
ss a
max
imum
of t
hree
fina
ncia
l yea
rs
• A
naly
sing
the
tren
d of
fina
ncia
l figu
res
acro
ss ti
me
wit
h re
spec
t to
the
give
n
• ex
plai
n th
e im
port
ance
of b
eing
liqu
id
• st
ate
and
expl
ain
the
diff
eren
ces
betw
een
liqui
dity
and
pro
fitab
ility
Ana
lysi
s of
abs
olut
e va
lues
• st
ate
and
calc
ulat
e w
orki
ng c
apit
al
• an
alys
e th
e co
mpo
nent
s of
tota
l cur
rent
as
sets
and
tota
l cur
rent
liab
ilitie
s
• in
terp
ret
curr
ent
asse
t ite
ms
and
curr
ent
liabi
lity
item
s ac
ross
a m
axim
um o
f thr
ee
finan
cial
yea
rs
• ev
alua
te th
e liq
uidi
ty o
f bus
ines
ses
from
th
e tr
end
of w
orki
ng c
apit
al, c
urre
nt
asse
t ite
ms
and
curr
ent
liabi
lity
item
s ac
ross
a m
axim
um o
f thr
ee fi
nanc
ial y
ears
• re
com
men
d m
eans
to im
prov
e liq
uidi
ty
22
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
scen
ario
and
thei
r im
plic
ation
s fo
r th
e bu
sine
ss•
Ana
lysi
ng th
e pr
obab
le r
easo
ns fo
rch
ange
in w
orki
ng c
apit
al, c
urre
nt a
sset
san
d cu
rren
t lia
biliti
es a
nd th
e im
plic
ation
sof
suc
h ch
ange
s fo
r th
e bu
sine
ss•
Impr
ovin
g liq
uidi
ty fo
r th
e ye
ar w
ith
resp
ect
to th
e gi
ven
scen
ario
•M
ay in
clud
e pr
esen
tatio
n of
figu
res
in,
or in
an
extr
act
of, t
he S
tate
men
t of
Fina
ncia
l Pos
ition
Ana
lysi
s of
rati
os•
Und
erst
andi
ng a
nd c
ompu
ting
liqui
dity
ratio
s:(i)
curr
ent
ratio
(ii)q
uick
rati
o•
Und
erst
andi
ng th
e di
ffer
ence
bet
wee
ncu
rren
t ra
tio a
nd q
uick
rati
o, a
nd w
hyqu
ick
ratio
is a
bett
er in
dica
tor
of li
quid
ity
than
cur
rent
rati
o•
Com
pari
ng li
quid
ity
ratio
s ac
ross
am
axim
um o
f thr
ee fi
nanc
ial y
ears
or
agai
nst
one
othe
r bu
sine
ss•
An a
lysi
ng th
e tr
end
of r
atios
acr
oss
time
and
agai
nst
one
othe
r bu
sine
ss w
ith
resp
ect
to th
e gi
ven
scen
ario
•A
naly
sing
pro
babl
e re
ason
s fo
r ch
ange
sin
rati
os a
nd th
e im
plic
ation
s of
suc
hch
ange
s fo
r th
e bu
sine
ss
Ana
lysi
s of
rati
os•
stat
e an
d ca
lcul
ate
liqui
dity
rati
os
•in
terp
ret
liqui
dity
rati
os a
cros
s a
max
imum
of t
hree
fina
ncia
l yea
rs o
rag
ains
t on
e ot
her
busi
ness
•ev
alua
te th
e liq
uidi
ty o
f bus
ines
ses
from
the
tren
d of
liqu
idit
y ra
tios
acro
ssa
max
imum
of t
hree
fina
ncia
l yea
rs o
rag
ains
t on
e ot
her
busi
ness
•re
com
men
d m
eans
to im
prov
e liq
uidi
tyra
tios
23
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
• Im
prov
ing
the
liqui
dity
rati
os w
ith
resp
ect
to th
e gi
ven
scen
ario
1.3.
3 Effi
cien
cy
1) H
ow d
oes
a bu
sine
ss
mea
sure
and
ana
lyse
it
s ab
ility
to m
anag
e in
vent
ory
and
trad
e re
ceiv
able
s?
Cont
extu
alBu
sine
sses
nee
d to
m
anag
e in
vent
ory
and
trad
e re
ceiv
able
s
Conc
eptu
al•
Inve
ntor
y m
anag
emen
t•
Trad
e re
ceiv
able
s m
anag
emen
t•
Tren
d of
val
ues
over
tim
e •
Com
pari
son
of v
alue
s ag
ains
t on
e ot
her
busi
ness
• Re
leva
nce
of
Info
rmati
on
Proc
edur
alCo
mpu
tatio
n of
effi
cien
cy r
atios
Inve
ntor
y m
anag
emen
t•
Effici
ency
of i
nven
tory
man
agem
ent
mea
sure
s th
e ab
ility
of a
bus
ines
s to
m
anag
e its
inve
ntor
y to
mee
t cus
tom
er
dem
and
• Im
port
ance
of a
trad
ing
busi
ness
bei
ng
able
to m
anag
e its
inve
ntor
y th
roug
h m
onito
ring
the
rate
of i
nven
tory
turn
over
•
Cons
eque
nces
of n
ot b
eing
abl
e to
m
anag
e in
vent
ory
effici
ently
Trad
e re
ceiv
able
s m
anag
emen
t•
Effici
ency
of t
rade
rece
ivab
les
man
agem
ent m
easu
res
the
abili
ty o
f a
busi
ness
to c
olle
ct it
s de
bts
quic
kly
• Im
port
ance
of m
anag
ing
its tr
ade
rece
ivab
les
thro
ugh
mon
itorin
g th
e ra
te o
f tr
ade
rece
ivab
les
turn
over
• Co
nseq
uenc
es o
f not
bei
ng a
ble
to
man
age
trad
e re
ceiv
able
s effi
cien
tly
Ana
lysi
s of
abs
olut
e va
lues
• Co
mpa
ring
inve
ntor
y ba
lanc
es, c
ost o
f sa
les,
net
cre
dit s
ales
, cre
dit s
ervi
ce fe
e re
venu
e an
d tr
ade
rece
ivab
les
bala
nces
ac
ross
a m
axim
um o
f thr
ee fi
nanc
ial y
ears
• ex
plai
n th
e im
port
ance
of b
eing
abl
e to
m
anag
e in
vent
ory
and
trad
e re
ceiv
able
s effi
cien
tly
Ana
lysi
s of
abs
olut
e va
lues
• an
alys
e in
vent
ory
bala
nces
, cos
t of
sa
les,
trad
e re
ceiv
able
s ba
lanc
es, n
et
cred
it s
ales
rev
enue
and
cre
dit
serv
ice
fee
reve
nue
acro
ss a
max
imum
of t
hree
fin
anci
al y
ears
or
agai
nst
one
othe
r bu
sine
ss
• in
terp
ret
inve
ntor
y ba
lanc
es, c
ost
of
sale
s, tr
ade
rece
ivab
les
bala
nces
, net
cr
edit
sal
es r
even
ue a
nd c
redi
t se
rvic
e fe
e re
venu
e ac
ross
a m
axim
um o
f thr
ee
finan
cial
yea
rs
• ev
alua
te th
e effi
cien
cy o
f bus
ines
ses
from
th
e tr
end
of in
vent
ory
bala
nces
, cos
t of
sa
les,
trad
e re
ceiv
able
s ba
lanc
es, n
et
cred
it s
ales
rev
enue
and
cre
dit
serv
ice
fee
reve
nue
acro
ss a
max
imum
of t
hree
fin
anci
al y
ears
Ana
lysi
s of
rati
os•
stat
e an
d ca
lcul
ate
the
rate
of i
nven
tory
tu
rnov
er (ti
mes
) and
day
s sa
les
in
inve
ntor
y (d
ays)
24
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
• A
naly
sing
the
tren
d of
fina
ncia
l figu
res
acro
ss ti
me
wit
h re
spec
t to
the
give
n sc
enar
io a
nd th
eir
impl
icati
ons
for
the
busi
ness
• A
naly
sing
the
prob
able
rea
sons
for
chan
ge in
inve
ntor
y ba
lanc
es, c
ost
of
sale
s, tr
ade
rece
ivab
les
bala
nces
, net
cr
edit
sal
es r
even
ue a
nd c
redi
t se
rvic
e fe
e re
venu
e an
d th
e im
plic
ation
s of
suc
h ch
ange
s fo
r th
e bu
sine
ss•
May
incl
ude
pres
enta
tion
of fi
gure
s in
the
Stat
emen
t of
Fin
anci
al P
erfo
rman
ce a
nd
Stat
emen
t of
Fin
anci
al P
ositi
on, o
r in
an
extr
act
of b
oth
the
finan
cial
sta
tem
ents
Ana
lysi
s of
rati
os•
Und
erst
andi
ng a
nd c
ompu
ting
the
effici
ency
rati
os:
(i)
rate
of i
nven
tory
turn
over
(tim
es)
(ii)
days
sal
es in
inve
ntor
y (d
ays)
(ii
i) ra
te o
f tra
de r
ecei
vabl
es tu
rnov
er
(tim
es)
(iv)
trad
e re
ceiv
able
s co
llecti
on p
erio
d (d
ays)
• Co
mpa
ring
the
rate
of i
nven
tory
turn
over
(ti
mes
), da
ys s
ales
in in
vent
ory
(day
s),
rate
of t
rade
rec
eiva
bles
turn
over
(tim
es)
and
trad
e re
ceiv
able
s co
llecti
on p
erio
d (d
ays)
acro
ss a
max
imum
of t
hree
fina
ncia
l ye
ars
or a
gain
st o
ne o
ther
bus
ines
s
• st
ate
and
calc
ulat
e th
e ra
te o
f tra
de
rece
ivab
les
turn
over
(tim
es) a
nd tr
ade
rece
ivab
les
colle
ction
per
iod(
days
)
• in
terp
ret
the
rate
of i
nven
tory
turn
over
(ti
mes
) and
day
s sa
les
in in
vent
ory
(day
s)
acro
ss a
max
imum
of t
hree
fina
ncia
l yea
rs
or a
gain
st o
ne o
ther
bus
ines
s
• in
terp
ret
the
rate
of t
rade
rec
eiva
bles
tu
rnov
er (ti
mes
) and
trad
e re
ceiv
able
s co
llecti
on p
erio
d(da
ys) a
cros
s a
max
imum
of
thre
e fin
anci
al y
ears
or
agai
nst
one
othe
r bu
sine
ss
• ev
alua
te th
e ab
ility
to m
anag
e in
vent
ory
from
the
tren
d of
rat
e of
inve
ntor
y tu
rnov
er (ti
mes
) or
days
sal
es in
in
vent
ory
(day
s) a
cros
s a
max
imum
of
thre
e fin
anci
al y
ears
or
agai
nst
one
othe
r bu
sine
ss
• ev
alua
te th
e ab
ility
to c
olle
ct d
ebt
from
th
e tr
end
of r
ate
of tr
ade
rece
ivab
les
turn
over
(tim
es) a
nd tr
ade
rece
ivab
les
colle
ction
per
iod
(day
s) a
cros
s a
max
imum
of t
hree
fina
ncia
l yea
rs o
r ag
ains
t on
e ot
her
busi
ness
• re
com
men
d m
eans
to im
prov
e th
e ra
te o
f in
vent
ory
turn
over
(tim
es) o
r da
ys s
ales
in
inve
ntor
y (d
ays)
25
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
•A
naly
sing
the
tren
d of
rati
os a
cros
s tim
ean
d ag
ains
t on
e ot
her
busi
ness
wit
hre
spec
t to
the
give
n sc
enar
io a
nd th
eir
impl
icati
on fo
r th
e bu
sine
ss•
Ana
lysi
ng th
e pr
obab
le r
easo
ns fo
rch
ange
s in
rati
os a
nd th
e im
plic
ation
s of
such
cha
nges
for
the
busi
ness
•Im
prov
ing
the
rate
of i
nven
tory
turn
over
(tim
es),
days
sal
es in
inve
ntor
y (d
ays)
,ra
te o
f tra
de r
ecei
vabl
es tu
rnov
er(ti
mes
) and
trad
e re
ceiv
able
s co
llecti
onpe
riod
(day
s) w
ith
resp
ect
to th
e gi
ven
scen
ario
•r e
com
men
d m
eans
to im
prov
e th
e ra
teof
trad
e re
ceiv
able
s tu
rnov
er (ti
mes
) and
trad
e re
ceiv
able
s co
llecti
on p
erio
d (d
ays)
26
Key
Und
erst
andi
ng 2
: Acc
ounti
ng is
a la
ngua
ge u
sed
to r
epre
sent
bus
ines
s ac
tivi
ties
Acc
ounti
ng is
the
lang
uage
of b
usin
ess
as it
pro
vide
s th
e co
ncep
ts a
nd fr
amew
ork
to r
epre
sent
bus
ines
s ac
tiviti
es.
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
2.1
Type
s of
bus
ines
ses
1) W
hat
are
the
diff
eren
t ty
pes
of p
rofit
-mak
ing
busi
ness
es a
nd h
ow
do th
eir
finan
cial
st
atem
ents
diff
er?
Cont
extu
alTy
pes
of b
usin
esse
s
Conc
eptu
al•
Trad
ing
busi
ness
es
• Se
rvic
e bu
sine
sses
• M
ain
busi
ness
acti
vitie
s of
pro
fit-m
akin
g bu
sine
sses
: tra
ding
and
ser
vice
•
Diff
eren
ce b
etw
een
the
busi
ness
ac
tiviti
es o
f tra
ding
and
ser
vice
bu
sine
sses
as
seen
in th
e St
atem
ent
of F
inan
cial
Pos
ition
and
Sta
tem
ent
of
Fina
ncia
l Per
form
ance
• ex
plai
n th
e di
ffer
ence
s be
twee
n tr
adin
g an
d se
rvic
e bu
sine
sses
• di
sting
uish
bet
wee
n fin
anci
al s
tate
men
ts
of b
usin
esse
s in
trad
ing
and
serv
ices
2.2
Form
s of
bus
ines
s ow
ners
hips
1) W
hat
are
the
diff
eren
t le
gal f
orm
s of
bus
ines
s an
d ho
w
do th
ey d
iffer
?
2) W
hat
are
the
fact
ors
to c
onsi
der
whe
n se
lecti
ng a
lega
l for
m
of b
usin
ess?
Cont
extu
alD
iffer
ent
form
s of
bu
sine
ss o
wne
rshi
ps
Conc
eptu
al•
Sole
pro
prie
tors
hip
• Li
mite
d lia
bilit
y pa
rtne
rshi
p•
Priv
ate
Lim
ited
com
pani
es
• Fo
rms
of e
ntitie
s: s
ole
prop
riet
orsh
ip,
limite
d lia
bilit
y pa
rtne
rshi
p an
d pr
ivat
e lim
ited
com
pany
• D
istin
guis
h th
e fe
atur
es o
f diff
eren
t fo
rms
of e
ntitie
s: s
ole
prop
riet
orsh
ip, l
imite
d lia
bilit
y pa
rtne
rshi
p an
d pr
ivat
e lim
ited
com
pany
• D
iffer
ence
s in
term
s of
cap
ital
str
uctu
re,
acce
ss to
fund
s, e
xten
t of
liab
ility
, le
vel o
f con
trol
des
ired
, life
span
an
d tr
ansf
erab
ility
of o
wne
rshi
p fo
r so
le p
ropr
ieto
rshi
p, li
mite
d lia
bilit
y pa
rtne
rshi
p an
d pr
ivat
e lim
ited
com
pany
(5
)
• ex
plai
n th
e fe
atur
es o
f a s
ole
prop
riet
orsh
ip, l
imite
d lia
bilit
y pa
rtne
rshi
p an
d pr
ivat
e lim
ited
com
pany
• di
sting
uish
bet
wee
n th
e fin
anci
al
stat
emen
ts o
f a s
ole
prop
riet
orsh
ip a
nd
priv
ate
limite
d co
mpa
ny
• an
alys
e, e
valu
ate
and
mak
e de
cisi
ons
abou
t th
e fo
rms
of b
usin
ess
owne
rshi
p (s
ole
prop
riet
orsh
ip, l
imite
d lia
bilit
y pa
rtne
rshi
p an
d pr
ivat
e lim
ited
com
pany
) w
hen
setti
ng u
p a
busi
ness
27
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
• D
iffer
ence
s in
the
Stat
emen
t of
Fin
anci
al
Posi
tion
and
Stat
emen
t of
Fin
anci
al
Perf
orm
ance
for
only
sol
e pr
opri
etor
ship
an
d pr
ivat
e lim
ited
com
pany
• Fa
ctor
s to
con
side
r w
hen
sele
cting
a le
gal
form
of b
usin
ess:
(i)
owne
r/ow
ners
’ exp
ertis
e(ii
) n
atur
e of
the
busi
ness
(ii
i) c
apit
al c
omm
itm
ent
for
initi
al s
et-u
p (a
cces
s to
fund
s)(iv
) lif
espa
n an
d tr
ansf
erab
ility
of
owne
rshi
p(v
) ri
sk (e
.g. l
imite
d lia
bilit
y)(v
i) le
vel o
f con
trol
des
ired
Not
es(5
) Ex
clud
es th
e le
gal f
orm
ation
s of
bu
sine
ss e
ntitie
s an
d kn
owle
dge
of
Boar
d of
Dir
ecto
rs a
nd A
nnua
l Gen
eral
M
eetin
g
2.3
Elem
ents
of fi
nanc
ial s
tate
men
ts
1) H
ow a
re b
usin
ess
activ
ities
mea
sure
d an
d pr
esen
ted
in
finan
cial
sta
tem
ents
?
Cont
extu
alBu
sine
ss a
ctivi
ties
Conc
eptu
al•
Ass
et
• A
ll bu
sine
ss a
ctivi
ties
are
repr
esen
ted
by
thes
e el
emen
ts: a
sset
, lia
bilit
y, e
quit
y,
inco
me
and
expe
nse
• Ex
ampl
es o
f ass
ets,
liab
ilitie
s, e
quit
y,
inco
me
and
expe
nses
• de
fine
asse
t, li
abili
ty, e
quit
y, in
com
e an
d ex
pens
e
• gi
ve e
xam
ples
of a
sset
s, li
abili
ties,
equ
ity,
in
com
e an
d ex
pens
es fo
r a
spec
ific
busi
ness
28
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
• Li
abili
ty•
Equi
ty•
Inco
me
• Ex
pens
e
• U
nder
stan
d ho
w th
e tr
ade
of th
e bu
sine
ss a
nd th
e us
e of
the
item
s aff
ect
how
they
are
cla
ssifi
ed
• cl
assi
fy it
ems
as a
sset
s, li
abili
ties,
equ
ity,
in
com
e an
d ex
pens
es fo
r a
spec
ific
busi
ness
2.4
Acc
ounti
ng e
quati
on
1) W
hat
is th
e re
latio
nshi
p be
twee
n as
set,
liab
ility
and
eq
uity
?
Conc
eptu
alA
ccou
nting
equ
ation
Proc
edur
alA
naly
se th
e eff
ects
of
tran
sacti
ons
on th
e ac
coun
ting
equa
tion
• Ba
sic
acco
untin
g eq
uatio
n of
ass
ets
= eq
uity
+ li
abili
ties,
and
its
expa
nsio
n to
in
clud
e in
com
e an
d ex
pens
es•
The
basi
c ac
coun
ting
equa
tion
is th
e ba
sis
of th
e St
atem
ent
of F
inan
cial
Pos
ition
• st
ate
the
basi
c ac
coun
ting
equa
tion
and
its
expa
nsio
n
• ca
lcul
ate
the
valu
es o
f ass
ets,
liab
ilitie
s an
d eq
uity
usi
ng th
e ac
coun
ting
equa
tion
• ap
ply
the
acco
untin
g eq
uatio
n to
the
Stat
emen
t of
Fin
anci
al P
ositi
on
• an
alys
e th
e eff
ects
of b
usin
ess
tran
sacti
ons
on th
e ac
coun
ting
equa
tion
2.5
Fina
ncia
l sta
tem
ents
This
sec
tion
look
s at
the
Stat
emen
t of
Fin
anci
al P
ositi
on a
nd S
tate
men
t of
Fin
anci
al P
erfo
rman
ce o
f bot
h so
le p
ropr
ieto
rshi
ps a
nd p
riva
te
limite
d co
mpa
nies
, and
the
end-
of-p
erio
d ac
coun
ting
adju
stm
ents
incl
uded
in th
is s
ylla
bus.
2.5.
1 St
atem
ent
of F
inan
cial
Pos
ition
1) W
hat
are
finan
cial
st
atem
ents
and
thei
r pu
rpos
es?
2) W
hat
is a
Sta
tem
ent
of F
inan
cial
Pos
ition
?
Cont
extu
alCo
mm
unic
ation
of t
he
list
of a
sset
s, li
abili
ties,
an
d eq
uity
of a
bus
ines
s
Purp
ose
of S
tate
men
t of
Fin
anci
al P
ositi
on•
Stat
emen
t of
Fin
anci
al P
ositi
on li
sts
the
asse
ts, l
iabi
lities
and
equ
ity
of a
bu
sine
ss a
t a
poin
t in
tim
e (6
)(7)
•
Repr
esen
ts th
e ac
coun
ting
equa
tion
• de
fine
and
disti
ngui
sh b
etw
een
non-
curr
ent
and
curr
ent
asse
ts
• de
fine
and
disti
ngui
sh b
etw
een
non-
curr
ent
and
curr
ent
liabi
lities
29
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
3) H
ow is
info
rmati
on
show
n in
the
Stat
emen
t of
Fi
nanc
ial P
ositi
on?
Conc
eptu
al•
Am
ount
s re
port
ed
are
at a
poi
nt in
tim
e•
Acc
ounti
ng e
quati
on•
Curr
ent
asse
ts•
Non
-cur
rent
ass
ets
• Cu
rren
t lia
biliti
es•
Non
-cur
rent
liab
ilitie
s•
Equi
ty•
Reta
ined
ear
ning
s•
Valu
ation
of a
sset
s•
Rele
vant
acc
ounti
ng
theo
ries
Proc
edur
al•
Prep
are
the
Stat
emen
t of
Fi
nanc
ial P
ositi
on•
Ana
lyse
the
effec
ts o
f bu
sine
ss tr
ansa
ction
s an
d ac
coun
ting
adju
stm
ents
on
the
Stat
emen
t of
Fi
nanc
ial P
ositi
on
Item
s in
the
Stat
emen
t of
Fin
anci
al P
ositi
on•
Clas
sific
ation
of i
tem
s as
non
-cur
rent
as
sets
, cur
rent
ass
ets,
non
-cur
rent
lia
biliti
es, c
urre
nt li
abili
ties
and
equi
ty•
Exam
ples
of n
on-c
urre
nt a
sset
s, c
urre
nt
asse
ts, n
on-c
urre
nt li
abili
ties,
cur
rent
lia
biliti
es a
nd e
quit
y•
Ow
ner’
s eq
uity
for
a so
le p
ropr
ieto
r an
d sh
areh
olde
rs’ e
quit
y fo
r a
priv
ate
limite
d co
mpa
ny (8
)
Valu
ation
met
hods
• A
ccou
nting
theo
ries
that
app
ly to
eac
h va
luati
on m
etho
d•
Valu
ation
met
hods
use
d fo
r as
sets
:-
non-
curr
ent
asse
ts a
t ne
t bo
ok v
alue
, i.e
., co
st le
ss a
ccum
ulat
ed d
epre
ciati
on-
inve
ntor
y va
lues
at
the
low
er o
f cos
t an
d ne
t re
alis
able
val
ue-
trad
e re
ceiv
able
s at
trad
e re
ceiv
able
s le
ss a
llow
ance
for
impa
irm
ent
of tr
ade
rece
ivab
les
• de
fine
net
asse
ts, e
quit
y an
d w
orki
ng
capi
tal
• ca
lcul
ate
net
asse
ts, e
quit
y an
d w
orki
ng
capi
tal
• an
alys
e th
e eff
ects
of b
usin
ess
tran
sacti
ons
and
acco
untin
g ad
just
men
ts
on th
e ow
ner’
s or
sha
reho
lder
s’ e
quit
y,
non-
curr
ent
asse
ts, c
urre
nt a
sset
s, n
on-
curr
ent
liabi
lities
, cur
rent
liab
ilitie
s, n
et
asse
ts a
nd w
orki
ng c
apit
al
• pr
epar
e a
Stat
emen
t of
Fin
anci
al P
ositi
on
wit
h en
d-of
-fina
ncia
l-per
iod
acco
untin
g ad
just
men
ts fo
r a
sole
pro
prie
tors
hip
or
priv
ate
limite
d co
mpa
ny
• pr
epar
e a
Stat
emen
t of
Fin
anci
al P
ositi
on
wit
h en
d-of
-fina
ncia
l-per
iod
acco
untin
g ad
just
men
ts fo
r a
trad
ing
or s
ervi
ce
busi
ness
30
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
Pres
enta
tion
of th
e St
atem
ent o
f Fin
anci
al
Posi
tion
• N
arra
tive
form
at o
f Sta
tem
ent o
f Fin
anci
al
Posi
tion
• Pr
esen
tatio
n de
tails
to s
how
: -
non-
curr
ent a
nd c
urre
nt a
sset
s (c
urre
nt
asse
ts a
re n
ot r
equi
red
to b
e lis
ted
in
orde
r of
liqu
idit
y)-
non-
curr
ent a
nd c
urre
nt li
abili
ties
- ca
pita
l of t
he s
ole
prop
rieto
r or
sha
re
capi
tal a
nd re
tain
ed e
arni
ngs
of a
pr
ivat
e lim
ited
com
pany
• Ac
coun
ting
adju
stm
ents
can
be
done
at
the
end
of a
per
iod
or fi
nanc
ial y
ear,
and
they
incl
ude
only
:-
decl
ared
div
iden
ds (p
riva
te li
mite
d co
mpa
ny)
- de
prec
iatio
n of
non
-cur
rent
ass
ets,
w
ith o
r w
ithou
t beg
inni
ng a
ccum
ulat
ed
depr
ecia
tion
- im
pairm
ent l
oss
on in
vent
ory
- im
pairm
ent l
oss
on tr
ade
rece
ivab
les
aris
ing
durin
g th
e fin
anci
al p
erio
d, w
ith
or w
ithou
t beg
inni
ng a
llow
ance
for
impa
irmen
t of t
rade
rece
ivab
les
- pr
epai
d ex
pens
es, e
xpen
ses
paya
ble,
se
rvic
e fe
e re
ceiv
ed in
adv
ance
, in
com
e re
ceiv
able
and
inco
me
rece
ived
in
adv
ance
31
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
- re
-cla
ssifi
catio
n of
cur
rent
por
tion
of
non-
curr
ent
liabi
lity
- co
rrec
tion
of e
rror
s no
t re
veal
ed b
y th
e Tr
ial B
alan
ce
• Ba
sic
inte
rpre
tatio
n an
d si
gnifi
canc
e of
rel
ation
ship
s of
fina
ncia
l figu
res
in
the
Stat
emen
t of
Fin
anci
al P
ositi
on
(9);
unde
rsta
ndin
g th
e re
latio
nshi
p of
fina
ncia
l figu
res
in th
e St
atem
ent
of F
inan
cial
Pos
ition
will
aid
in
unde
rsta
ndin
g Se
ction
1.3
Not
es(6
) The
Sta
tem
ent
of F
inan
cial
Pos
ition
is
to b
e pr
epar
ed fr
om a
list
of a
ccou
nt
bala
nces
or
a tr
ial b
alan
ce(7
) The
Sta
tem
ent
of F
inan
cial
Pos
ition
in
clud
es o
nly
that
for
(i)
trad
ing
and
serv
ice
busi
ness
es(ii
) so
le p
ropr
ieto
rshi
ps a
nd p
riva
te
limite
d co
mpa
nies
(8) T
he te
rms
net
wor
th a
nd c
apita
l ow
ned
are
not
used
(9) I
nclu
des
only
the
follo
win
g:(i)
ho
w r
esou
rces
are
obt
aine
d an
d us
ed
32
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
(ii)
curr
ent
asse
ts, c
urre
nt li
abili
ties
and
wor
king
cap
ital (
curr
ent
asse
ts −
cur
rent
lia
biliti
es)
(iii)
equi
ty a
nd n
et a
sset
s (t
otal
ass
ets
−
tota
l lia
biliti
es)
(iv) c
hang
es in
net
ass
ets
betw
een
two
poin
ts in
tim
e an
d th
e pr
ofit
for
the
peri
od
2.5.
2 St
atem
ent
of F
inan
cial
Per
form
ance
1) W
hat
is a
Sta
tem
ent
of F
inan
cial
Pe
rfor
man
ce?
2) H
ow is
info
rmati
on
show
n in
the
Stat
emen
t of
Fin
anci
al
Perf
orm
ance
?
Cont
extu
alCo
mm
unic
ation
of
busi
ness
per
form
ance
Conc
eptu
al•
Am
ount
s re
port
ed
are
for
a pe
riod
of
time
• Ex
pand
ed a
ccou
nting
eq
uatio
n•
Inco
me
• Ex
pens
es
• Pr
ofits
• Re
leva
nt a
ccou
nting
th
eori
es
Proc
edur
al•
Prep
are
the
Stat
emen
t
Purp
ose
of th
e St
atem
ent
of F
inan
cial
Pe
rfor
man
ce•
The
Stat
emen
t of
Fin
anci
al P
erfo
rman
ce
show
s th
e in
com
e an
d ex
pens
es o
f a
busi
ness
for
a pe
riod
of ti
me
(10)
• Sh
ows
the
profi
t fo
r th
e pe
riod
, i.e
., th
e ex
cess
of i
ncom
e ov
er e
xpen
ses
for
a pe
riod
of ti
me
Item
s in
the
Stat
emen
t of
Fin
anci
al
Perf
orm
ance
• Fo
r a
trad
ing
busi
ness
, the
per
petu
al
inve
ntor
y re
cord
ing
met
hod
is a
dopt
ed•
The
follo
win
g de
tails
are
sho
wn
in th
e tr
adin
g po
rtion
of t
he S
tate
men
t of
Fi
nanc
ial P
erfo
rman
ce:
- ne
t sa
les
reve
nue
(sal
es r
even
ue −
sa
les
retu
rns)
- co
st o
f sal
es
• de
fine
and
disti
ngui
sh g
ross
pro
fit/l
oss
and
profi
t/lo
ss fo
r th
e fin
anci
al p
erio
d
• ex
plai
n th
e pu
rpos
es o
f the
trad
ing
porti
on, a
nd p
rofit
and
loss
por
tion
of th
e St
atem
ent
of F
inan
cial
Per
form
ance
• ca
lcul
ate
net
sale
s re
venu
e, s
ervi
ce fe
e re
venu
e, g
ross
pro
fit/l
oss
and
profi
t/lo
ss
for
the
peri
od
• pr
epar
e a
Stat
emen
t of
Fin
anci
al
Perf
orm
ance
wit
h en
d-of
-fina
ncia
l-pe
riod
acc
ounti
ng a
djus
tmen
ts fo
r a
sole
pro
prie
tors
hip
or p
riva
te li
mite
d co
mpa
ny
• pr
epar
e a
Stat
emen
t of
Fin
anci
al
Perf
orm
ance
wit
h en
d-of
-fina
ncia
l-per
iod
acco
untin
g ad
just
men
ts fo
r a
trad
ing
or
serv
ice
busi
ness
33
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
of F
inan
cial
Pe
rfor
man
ce-
gros
s pr
ofit/
loss
• Fo
r a
serv
ice
busi
ness
, ser
vice
fee
reve
nue
is s
how
n as
a li
ne it
em, s
epar
ate
from
oth
er in
com
e
Pres
enta
tion
of th
e St
atem
ent
of F
inan
cial
Pe
rfor
man
ce•
Nar
rativ
e fo
rmat
of S
tate
men
t of
Fi
nanc
ial P
erfo
rman
ce•
Pres
enta
tion
of s
ales
rev
enue
, sal
es
retu
rns
and
cost
of s
ales
on
the
Stat
emen
t of
Fin
anci
al P
erfo
rman
ce fo
r a
trad
ing
busi
ness
• Pr
esen
tatio
n of
ser
vice
fee
reve
nue
on
the
Stat
emen
t of
Fin
anci
al P
erfo
rman
ce
for
a se
rvic
e bu
sine
ss•
Oth
er e
xpen
ses
in th
e pr
ofit
and
loss
po
rtion
of t
he S
tate
men
t of
Fin
anci
al
Perf
orm
ance
are
not
req
uire
d to
be
clas
sifie
d by
func
tion.
• A
ccou
nting
adj
ustm
ents
can
be
done
at
the
end
of a
per
iod
or fi
nanc
ial y
ear,
and
they
incl
ude
only
:-
depr
ecia
tion
of n
on-c
urre
nt a
sset
s,
wit
h or
wit
hout
beg
inni
ng a
ccum
ulat
ed
depr
ecia
tion
34
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
- im
pair
men
t lo
ss o
n in
vent
ory
- im
pair
men
t lo
ss o
n tr
ade
rece
ivab
les
aris
ing
duri
ng th
e fin
anci
al p
erio
d, w
ith
or w
itho
ut b
egin
ning
allo
wan
ce fo
r im
pair
men
t of
trad
e re
ceiv
able
s -
serv
ice
fee
reve
nue
rece
ived
in
adva
nce,
pre
paid
exp
ense
s, e
xpen
ses
paya
ble,
oth
er in
com
e re
ceiv
able
s an
d in
com
e re
ceiv
ed in
adv
ance
-
corr
ectio
n of
any
err
ors
not
reve
aled
by
the
Tria
l Bal
ance
• Ba
sic
inte
rpre
tatio
n an
d si
gnifi
canc
e of
re
latio
nshi
ps o
f fina
ncia
l figu
res
in th
e St
atem
ent
of F
inan
cial
Per
form
ance
(1
1); u
nder
stan
ding
the
rela
tions
hips
of
fina
ncia
l figu
res
in th
e St
atem
ent
of F
inan
cial
Per
form
ance
will
aid
in
unde
rsta
ndin
g Se
ction
1.3
Not
es(1
0) S
tate
men
t of F
inan
cial
Per
form
ance
is
to b
e pr
epar
ed fr
om a
list
of a
ccou
nt
bala
nces
or a
tria
l bal
ance
and
incl
udes
on
ly th
at fo
r(i)
tr
adin
g an
d se
rvic
e bu
sine
sses
(ii)
sole
pro
prie
tors
hips
and
pri
vate
lim
ited
com
pani
es
35
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
(11)
Incl
udes
onl
y th
e fo
llow
ing
rela
tions
hips
bet
wee
n:(i)
sale
s re
venu
e, c
ost
of s
ales
and
gros
s pr
ofit/
loss
(ii)
gros
s pr
ofit/
loss
, oth
er in
com
e,ot
her
expe
nses
and
pro
fit/l
oss
for
the
peri
od(ii
i) sa
les
reve
nue,
cos
t of
sal
es, o
ther
inco
me,
oth
er e
xpen
ses
and
profi
t/lo
ss fo
r th
e pe
riod
2.6
Inco
me
and
expe
nses
This
sec
tion
look
s in
to th
e re
venu
e, o
ther
inco
me,
cos
t of
sal
es a
nd o
ther
exp
ense
item
s in
a S
tate
men
t of
Fin
anci
al P
erfo
rman
ce, a
nd th
e ad
just
men
ts to
be
mad
e to
thes
e ite
ms
at th
e en
d of
a fi
nanc
ial p
erio
d.
2.6.
1 Re
venu
e an
d ot
her
inco
me
1) W
hat
are
the
tran
sacti
ons
for
reve
nue
and
othe
rin
com
e?
2) H
ow a
re r
even
uean
d ot
her
inco
me
pres
ente
d in
the
finan
cial
sta
tem
ents
?
3) H
ow a
re a
djus
tmen
tsfo
r re
venu
e an
dot
her
inco
me
mad
e?
Cont
extu
al•
Trad
ing
and
serv
ice
busi
ness
•H
ow th
e da
tes
for
rece
ipt
of in
com
e ca
ndi
ffer
wit
h th
e pe
riod
they
are
rep
orte
d as
inco
me
Conc
eptu
al•
Am
ount
s re
port
ed a
refo
r a
perio
d of
tim
e•
Sale
s re
venu
e•
Serv
ice
fee
reve
nue
•Se
rvic
e fe
e re
venu
ere
ceiv
ed in
adv
ance
Acc
ounti
ng th
eori
es•
Reve
nue
reco
gniti
on th
eory
•A
ccru
al b
asis
of a
ccou
nting
theo
ry
Acc
ounti
ng fo
r tr
ansa
ction
s•
Acc
ounti
ng fo
r:(i)
sale
of g
oods
on
cash
and
cre
dit
basi
s(ii
)pr
ovis
ion
of s
ervi
ces
on c
ash
and
cred
it b
asis
(iii)
retu
rns
of g
oods
(iv)
serv
ice
fee
reve
nue
rece
ived
inad
vanc
e(v
)ot
her
inco
me
(12)
(vi)
inco
me
rece
ivab
le (1
2)(v
ii)in
com
e re
ceiv
ed in
adv
ance
(12)
Acc
ounti
ng th
eori
es•
expl
ain
the
acco
untin
g of
sal
es r
even
ue,
serv
ice
fee
reve
nue,
oth
er in
com
e,se
rvic
e fe
e re
ceiv
ed in
adv
ance
,in
com
e re
ceiv
able
and
inco
me
rece
ived
in a
dvan
ce in
rel
ation
to r
elev
ant
acco
untin
g th
eori
es
Acc
ounti
ng fo
r tr
ansa
ction
s•
calc
ulat
e th
e sa
les
reve
nue
adju
sted
for
sale
s re
turn
•ca
lcul
ate
the
serv
ice
fee
reve
nue
adju
sted
for
serv
ice
fee
reve
nue
rece
ived
in a
dvan
ce
36
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
•O
ther
inco
me
•In
com
e re
ceiv
able
•In
com
e re
ceiv
ed in
adva
nce
•Re
venu
e re
cogn
ition
theo
ry•
Accr
ual b
asis
of
acco
untin
g
Proc
edur
al•
Reco
rd s
ales
reve
nue,
serv
ice
fee
reve
nue
and
inco
me
in th
ejo
urna
l, le
dger
acco
unts
and
fina
ncia
lst
atem
ents
•Re
cord
ser
vice
fee
reve
nue
rece
ived
in a
dvan
ce, i
ncom
ere
ceiv
able
and
inco
me
rece
ived
in a
dvan
ce in
the
jour
nal a
nd fi
nanc
ial
stat
emen
ts
•Ca
lcul
ation
of s
ervi
ce fe
e re
venu
e re
ceiv
edin
adv
ance
, inc
ome
rece
ivab
les
and
inco
me
rece
ived
in a
dvan
ce•
Am
ount
s re
ceiv
ed a
re re
cord
ed a
s in
com
eat
the
poin
ts o
f rec
eipt
, and
any
une
arne
dor
not
rece
ived
por
tions
are
adj
uste
d at
the
end
of th
e fin
anci
al p
erio
d•
A dju
stm
ents
at e
nd o
f per
iod
are
to b
em
ade
agai
nst s
epar
ate
serv
ice
fee
reve
nue
rece
ived
in a
dvan
ce, i
ncom
e re
ceiv
able
and
inco
me
rece
ived
in a
dvan
ce le
dger
acco
unts
•Cl
osin
g of
sal
es re
venu
e, s
ales
retu
rns,
serv
ice
fee
reve
nue
and
othe
r in
com
e ar
epe
rfor
med
onl
y at
the
end
of th
e fin
anci
alye
ar, a
nd th
e am
ount
s ar
e tr
ansf
erre
dto
the
inco
me
sum
mar
y (fo
r pe
riods
inbe
twee
n th
e fin
anci
al y
ear,
ther
e w
ill b
eba
lanc
es in
thes
e ac
coun
ts)
Pres
enta
tion
•Pr
esen
tatio
n of
sal
es r
even
ue, s
ales
retu
rns,
ser
vice
fee
reve
nue
and
othe
rin
com
e in
the
Stat
emen
t of
Fin
anci
alPe
rfor
man
ce•
Pres
enta
tion
of in
com
e re
ceiv
able
in th
eSt
atem
ent
of F
inan
cial
Pos
ition
•ca
lcul
ate
othe
r in
com
e ad
just
ed fo
rin
com
e re
ceiv
able
and
inco
me
rece
ived
in a
dvan
ce
•pr
epar
e th
e jo
urna
l ent
ries
aff
ectin
gsa
les
reve
nue,
sal
es r
etur
ns, s
ervi
cefe
e re
venu
e, o
ther
inco
me,
ser
vice
fee
reve
nue
rece
ived
in a
dvan
ce, i
ncom
ere
ceiv
able
and
inco
me
rece
ived
inad
vanc
e
•pr
epar
e th
e sa
les
reve
nue,
sal
es r
etur
ns,
serv
ice
fee
reve
nue
and
othe
r in
com
ele
dger
acc
ount
s w
itho
ut a
djus
tmen
ts fo
rse
rvic
e fe
e re
venu
e re
ceiv
ed in
adv
ance
,in
com
e re
ceiv
able
and
inco
me
rece
ived
in a
dvan
ce
•in
terp
ret
the
sale
s re
venu
e, s
ales
ret
urns
,se
rvic
e fe
e re
venu
e, o
ther
inco
me
ledg
erac
coun
ts w
ith
adju
stm
ents
for
serv
ice
fee
reve
nue
rece
ived
in a
dvan
ce, i
ncom
ere
ceiv
able
and
inco
me
rece
ived
inad
vanc
e
•an
alys
e th
e eff
ects
of s
ervi
ce fe
e re
venu
ere
ceiv
ed in
adv
ance
, inc
ome
rece
ivab
les
and
inco
me
rece
ived
in a
dvan
ce o
ncu
rren
t lia
biliti
es, c
urre
nt a
sset
s an
dpr
ofit/
loss
for
the
peri
od
37
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
• Pr
esen
tatio
n of
ser
vice
fee
reve
nue
rece
ived
in a
dvan
ce a
nd in
com
e re
ceiv
ed
in a
dvan
ce in
the
Stat
emen
t of
Fin
anci
al
Posi
tion
• In
com
e re
ceiv
able
is s
how
n as
cur
rent
as
sets
in th
e St
atem
ent
of F
inan
cial
Po
sitio
n•
Serv
ice
fee
reve
nue
rece
ived
in a
dvan
ce
and
inco
me
rece
ived
in a
dvan
ce a
re
show
n as
cur
rent
liab
ilitie
s in
the
Stat
emen
t of
Fin
anci
al P
ositi
on
Not
es(1
2) E
xclu
des
the
follo
win
g:
(i)
divi
dend
inco
me
(ii)
prep
arati
on o
f inc
ome
rece
ivab
le a
nd
inco
me
rece
ived
in a
dvan
ce le
dger
ac
coun
ts
Pres
enta
tion
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
erfo
rman
ce s
how
ing
the
pres
enta
tion
of s
ales
rev
enue
, sal
es
retu
rns,
and
oth
er in
com
e fo
r a
trad
ing
busi
ness
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
erfo
rman
ce s
how
ing
the
pres
enta
tion
of s
ervi
ce fe
e re
venu
e an
d ot
her
inco
me
for
a se
rvic
e bu
sine
ss
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on s
how
ing
the
pres
enta
tion
of s
ervi
ce fe
e re
venu
e re
ceiv
ed in
adv
ance
for
a se
rvic
e bu
sine
ss
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on s
how
ing
the
pres
enta
tion
of in
com
e re
ceiv
able
and
in
com
e re
ceiv
ed in
adv
ance
for
both
a
trad
ing
and
a se
rvic
e bu
sine
ss
2.6.
2 Co
st o
f sal
es a
nd o
ther
exp
ense
s
1) W
hat
are
the
tran
sacti
ons
for
cost
of
sal
es a
nd o
ther
ex
pens
es?
Cont
extu
alH
ow th
e da
tes
of
paym
ents
of e
xpen
ses
can
diff
er w
ith
the
peri
od th
ey a
re
repo
rted
as
othe
r ex
pens
es
Acc
ounti
ng th
eori
es•
Mat
chin
g th
eory
• A
ccru
al b
asis
of a
ccou
nting
theo
ry
Acc
ounti
ng fo
r tr
ansa
ction
s•
Acc
ounti
ng fo
r:
Acc
ounti
ng th
eori
es•
expl
ain
the
acco
untin
g of
cos
t of
sal
es
and
othe
r ex
pens
es a
nd a
djus
tmen
ts fo
r pr
epai
d ex
pens
es a
nd e
xpen
ses
paya
ble
in r
elati
on to
rel
evan
t ac
coun
ting
theo
ries
38
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
2) H
ow a
re c
ost
of s
ales
an
d ot
her
expe
nses
pr
esen
ted
in fi
nanc
ial
stat
emen
ts?
3) H
ow a
re a
djus
tmen
ts
for
othe
r ex
pens
es
mad
e
Conc
eptu
al•
Am
ount
s re
port
ed a
re
for
a pe
riod
of ti
me
• Pr
epay
men
ts•
Expe
nses
pay
able
• Ac
crua
l bas
is o
f ac
coun
ting
• M
atch
ing
theo
ry
Proc
edur
al•
Rec
ord
cost
of s
ales
, an
d ot
her
expe
nses
in
the
jour
nal,
ledg
er
acco
unts
and
fina
ncia
l st
atem
ents
• R
ecor
d pr
epai
d ex
pens
es a
nd
expe
nses
pay
able
in
the
jour
nal a
nd
finan
cial
sta
tem
ents
(i)
cost
of s
ales
(ii)
othe
r ex
pens
es p
aid
by c
ash/
cheq
ue(ii
i) ex
pens
es in
curr
ed b
ut n
ot p
aid
(exp
ense
s pa
yabl
e) (1
3)(iv
) exp
ense
s no
t inc
urre
d bu
t pai
d (p
repa
id
expe
nses
) (13
)•
Calc
ulati
on o
f cos
t of s
ales
and
oth
er
expe
nses
, pre
paid
exp
ense
s an
d ex
pens
es
paya
ble
• A
mou
nts
paid
are
reco
rded
as
othe
r ex
pens
es a
t the
poi
nts
of p
aym
ents
, and
an
y un
used
or
outs
tand
ing
porti
ons
are
adju
sted
at t
he e
nd o
f the
fina
ncia
l per
iod
• Ad
just
men
ts a
t end
of p
erio
d ar
e to
be
mad
e ag
ains
t sep
arat
e pr
epai
d ex
pens
es
and
exp
ense
s pa
yabl
e le
dger
acc
ount
s•
Clos
ing
of a
ll co
st o
f sal
es a
nd e
xpen
ses
acco
unts
are
per
form
ed o
nly
at th
e en
d of
the
finan
cial
yea
r an
d am
ount
s ar
e tr
ansf
erre
d to
inco
me
sum
mar
y (fo
r pe
riods
in b
etw
een
the
finan
cial
yea
r, th
ere
will
be
bala
nces
in th
ese
acco
unts
)
Pres
enta
tion
• Pr
esen
tatio
n of
cos
t of
sal
es a
nd o
ther
ex
pens
es in
the
Stat
emen
t of
Fin
anci
al
Perf
orm
ance
Acc
ounti
ng fo
r tr
ansa
ction
s•
calc
ulat
e th
e co
st o
f sal
es
• ca
lcul
ate
othe
r ex
pens
es a
djus
ted
for
prep
aid
expe
nses
and
exp
ense
s pa
yabl
e
• pr
epar
e th
e jo
urna
l ent
ries
aff
ectin
g co
st o
f sal
es, o
ther
exp
ense
s, p
repa
id
expe
nses
and
exp
ense
s pa
yabl
e
• pr
epar
e th
e co
st o
f sal
es a
nd o
ther
ex
pens
es le
dger
acc
ount
s w
itho
ut
adju
stm
ents
for
prep
aid
expe
nses
and
ex
pens
es p
ayab
le
• in
terp
ret
the
cost
of s
ales
and
oth
er
expe
nses
ledg
er a
ccou
nts
wit
h ad
just
men
ts fo
r pr
epai
d ex
pens
es a
nd
expe
nses
pay
able
• an
alys
e th
e eff
ects
of p
repa
id e
xpen
ses
and
expe
nses
pay
able
on
curr
ent
liabi
lities
, cur
rent
ass
ets
and
profi
t/lo
ss
for
the
peri
od
Pres
enta
tion
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
erfo
rman
ce s
how
ing
the
pres
enta
tion
of c
ost
of s
ales
and
oth
er
expe
nses
for
a tr
adin
g bu
sine
ss
39
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
• Pr
esen
tatio
n of
pre
paid
exp
ense
s an
d ex
pens
es p
ayab
le in
the
Stat
emen
t of
Fi
nanc
ial P
ositi
on•
Prep
aid
expe
nses
are
sho
wn
as c
urre
nt
asse
ts in
the
Stat
emen
t of
Fin
anci
al
Posi
tion
• Ex
pens
es p
ayab
les
are
show
n as
cur
rent
lia
biliti
es in
the
Stat
emen
t of
Fin
anci
al
Posi
tion
Not
e(1
3) E
xclu
des
the
prep
arati
on o
f pre
paid
ex
pens
es a
nd e
xpen
ses
paya
bles
ledg
er
acco
unts
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
erfo
rman
ce s
how
ing
the
pres
enta
tion
of o
ther
exp
ense
s fo
r a
serv
ice
busi
ness
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on s
how
ing
the
pres
enta
tion
of p
repa
id e
xpen
ses
and
expe
nses
pay
able
for
both
a tr
adin
g an
d a
serv
ice
busi
ness
2.7
Ass
ets
This
sec
tion
look
s in
to th
e as
set
item
s in
a S
tate
men
t of
Fin
anci
al P
ositi
on a
nd th
e ad
just
men
ts to
be
mad
e to
thes
e ite
ms
at th
e en
d of
a
finan
cial
per
iod.
2.7.
1 Ca
sh in
han
d an
d ca
sh a
t ba
nk
1) H
ow d
o bu
sine
sses
m
anag
e ca
sh?
2) W
hat
are
the
tran
sacti
ons
invo
lvin
g ca
sh?
Cont
extu
alRe
ceip
ts a
nd p
aym
ents
Conc
eptu
alA
sset
s ve
rsus
liab
ilitie
s
Cash
man
agem
ent
• U
nder
stan
d w
hy b
usin
esse
s ne
ed to
kee
p ca
sh fo
r op
erati
onal
nee
ds•
Und
erst
and
how
bus
ines
ses
man
age
cash
in
han
d, c
ash
at b
ank,
cas
h in
tran
sit,
cas
h re
ceip
ts a
nd c
ash
paym
ents
(14)
Acc
ounti
ng fo
r tr
ansa
ction
s•
prep
are
the
jour
nal e
ntri
es r
elat
ed to
re
ceip
ts a
nd p
aym
ents
• st
ate
the
caus
es o
f dis
hono
ured
che
que
• pr
epar
e th
e jo
urna
l ent
ries
for
dish
onou
red
cheq
ue
40
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
3) H
ow is
cas
h
pres
ente
d in
fina
ncia
l st
atem
ents
?
Proc
edur
alRe
cord
cas
h re
ceip
ts,
cash
pay
men
ts
and
bank
-rel
ated
tr
ansa
ction
s in
th
e jo
urna
l, le
dger
ac
coun
ts a
nd fi
nanc
ial
stat
emen
ts
Acc
ounti
ng fo
r tr
ansa
ction
s•
Acc
ounti
ng fo
r re
ceip
ts a
nd p
aym
ents
-
cash
at
bank
acc
ount
refl
ects
the
amou
nt d
epos
ited
in th
e ba
nk fo
r sa
fe-
keep
ing
- th
e us
e of
che
ques
and
how
di
shon
oure
d ch
eque
s ha
ppen
- ac
coun
ting
for
dish
onou
red
cheq
ues,
w
ith
and
wit
hout
cas
h di
scou
nt
prev
ious
ly p
rovi
ded/
rece
ived
Pres
enta
tion
• Pr
esen
tatio
n of
cas
h in
han
d, c
ash
at
bank
and
ban
k ov
erdr
aft in
the
Stat
emen
t of
Fin
anci
al P
ositi
on.
Not
e(1
4) T
he in
tern
al c
ontr
ol o
f cas
h is
cov
ered
in
secti
on 3
.4
• pr
epar
e th
e ca
sh in
han
d an
d ca
sh a
t ba
nk le
dger
acc
ount
s
• in
terp
ret
the
cash
in h
and
and
cash
at
bank
ledg
er a
ccou
nts
Pres
enta
tion
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on s
how
ing
the
pres
enta
tion
of c
ash
at b
ank,
ban
k ov
erdr
aft a
nd c
ash
in h
and
2.7.
2 In
vent
orie
s
1) W
hy d
o bu
sine
sses
ke
ep in
vent
orie
s?
2) H
ow d
o bu
sine
sses
m
anag
e in
vent
orie
s?
Cont
extu
alIn
vent
ory
man
agem
ent
Conc
eptu
al•
Acc
ounti
ng a
nd
Inve
ntor
y m
anag
emen
t•
Und
erst
and
why
bus
ines
ses
keep
in
vent
orie
s to
avo
id o
ut-o
f-st
ock
situ
ation
s
Inve
ntor
y m
anag
emen
t•
expl
ain
why
bus
ines
ses
keep
inve
ntor
ies
• de
scri
be h
ow b
usin
esse
s m
anag
e in
vent
orie
s
41
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
3) W
hat
are
the
tran
sacti
ons
invo
lvin
g th
e pu
rcha
se a
nd s
ale
of in
vent
ory?
4) H
ow is
inve
ntor
y pr
esen
ted
in fi
nanc
ial
stat
emen
ts?
5) H
ow is
inve
ntor
y va
lued
?
non-
acco
untin
g in
form
ation
• Re
leva
nce
of
info
rmati
on•
Prud
ence
theo
ry•
Valu
ation
of
inve
ntor
y –
at th
e lo
wer
of c
ost
and
net
real
isab
le v
alue
• A
djus
tmen
ts –
to
reco
gnis
e im
pair
men
t lo
ss o
n in
vent
ory
Proc
edur
alRe
cord
pur
chas
es a
nd
sale
s of
inve
ntor
y,
othe
r re
late
d in
vent
ory
tran
sacti
ons
and
any
adju
stm
ents
for
inve
ntor
y in
the
jour
nal,
ledg
er a
ccou
nts
and
finan
cial
sta
tem
ents
• U
nder
stan
d ho
w b
usin
esse
s m
anag
e in
vent
orie
s by
-
keep
ing
prop
er r
ecor
ds to
trac
k in
vent
ory
- ke
epin
g ph
ysic
al in
vent
ory
in th
e w
areh
ouse
- bu
ying
insu
ranc
e to
insu
re th
e in
vent
ory
• U
nder
stan
d ho
w b
usin
esse
s m
anag
e an
d m
ake
deci
sion
s ab
out
type
s of
inve
ntor
y to
buy
by
cons
ider
ing
both
acc
ounti
ng
and
non-
acco
untin
g in
form
ation
- ac
coun
ting
info
rmati
on: c
ost
of
inve
ntor
y, s
tora
ge c
ost,
gro
ss
profi
t m
argi
n, r
ate
of in
vent
ory
turn
over
(tim
es) o
r da
ys s
ales
in
inve
ntor
y(da
ys)
- no
n-ac
coun
ting
info
rmati
on in
clud
es
only
(i)
ty
pes
of s
tora
ge(ii
) na
ture
of p
rodu
ct(ii
i) co
nsum
er p
refe
renc
e
Acc
ounti
ng th
eori
es•
Prud
ence
theo
ry
• an
alys
e, e
valu
ate
and
mak
e de
cisi
ons
abou
t th
e pu
rcha
se o
f inv
ento
ry b
y co
nsid
erin
g ac
coun
ting
and
non-
acco
untin
g in
form
ation
Acc
ounti
ng th
eori
es•
expl
ain
the
valu
ation
of i
nven
tory
in
rela
tion
to r
elev
ant
acco
untin
g th
eori
es
Acc
ounti
ng fo
r tr
ansa
ction
s•
iden
tify
the
cost
s of
pur
chas
es
• ca
lcul
ate
the
cost
of s
ales
and
end
ing
inve
ntor
y
• ca
lcul
ate
the
impa
irm
ent
loss
on
inve
ntor
y ad
just
ed fo
r in
sura
nce
clai
ms
if an
y
• pr
epar
e th
e jo
urna
l ent
ries
on
inve
ntor
y at
poi
nts
of p
urch
ases
and
cos
t of
sal
es a
t po
ints
of s
ales
• pr
epar
e th
e jo
urna
l ent
ry to
rec
ord
impa
irm
ent
loss
on
inve
ntor
y
• pr
epar
e th
e in
vent
ory
ledg
er a
ccou
nt
wit
hout
adj
ustm
ents
for
impa
irm
ent
loss
on
inve
ntor
y
42
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
Acc
ounti
ng fo
r tr
ansa
ction
s•
Acc
ounti
ng fo
r pu
rcha
ses
of in
vent
ory,
re
turn
of i
nven
tory
, sal
es o
f inv
ento
ry
and
sale
s re
turn
s fo
r a
trad
ing
busi
ness
- pe
rpet
ual i
nven
tory
rec
ordi
ng m
etho
d (1
5)-
good
s ar
e in
vent
orie
d at
the
poin
ts
of p
urch
ases
and
exp
ense
d as
cos
t of
sa
les
at th
e po
ints
of s
ales
- co
sts
of p
urch
ases
inve
ntor
ied
incl
ude
the
purc
hase
pri
ce a
nd c
osts
to b
ring
in
inve
ntor
y le
ss r
etur
ns (1
6)•
Acc
ounti
ng fo
r co
st o
f sal
es
- ca
lcul
ation
of c
ost
of s
ales
and
end
ing
inve
ntor
y us
ing
the
FIFO
met
hod
(17)
Valu
ation
• Va
luati
on o
f end
ing
inve
ntor
y (1
8)-
Sing
apor
e’s
Fina
ncia
l Rep
ortin
g St
anda
rds
(FRS
) 2 s
tate
s th
at
“inv
ento
ries
sha
ll be
mea
sure
d at
the
low
er o
f cos
t an
d ne
t re
alis
able
val
ue”
- ac
coun
ting
for
impa
irm
ent
loss
on
inve
ntor
y w
hen
the
net
real
isab
le v
alue
of
inve
ntor
y is
low
er th
an b
ook
valu
e of
inve
ntor
y at
the
end
of th
e fin
anci
al
peri
od (1
9)
• in
terp
ret
the
inve
ntor
y le
dger
acc
ount
w
ith
adju
stm
ents
for
impa
irm
ent
loss
on
inve
ntor
y an
d/or
insu
ranc
e cl
aim
s
• an
alys
e th
e eff
ects
of u
nder
stat
emen
t or
ove
rsta
tem
ent
of in
vent
ory
on g
ross
pr
ofit/
loss
and
pro
fit/l
oss
for
the
peri
od
for
the
curr
ent
finan
cial
per
iod
Valu
ation
• st
ate
the
valu
ation
met
hod
for
inve
ntor
y in
the
Stat
emen
t of
Fin
anci
al P
ositi
on
Pres
enta
tion
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on a
nd S
tate
men
t of
Fi
nanc
ial P
erfo
rman
ce s
how
ing
the
valu
es
and
pres
enta
tion
of e
ndin
g in
vent
ory,
co
st o
f sal
es a
nd im
pair
men
t lo
ss o
n in
vent
ory
43
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
Pres
enta
tion
•Pr
esen
tatio
n of
inve
ntor
y, c
ost
of s
ales
and
impa
irm
ent
loss
on
inve
ntor
y in
the
Stat
emen
t of
Fin
anci
al P
ositi
on a
ndSt
atem
ent
of F
inan
cial
Per
form
ance
Not
es(1
5)A
djus
tmen
t fo
r di
ffer
ence
s be
twee
nen
ding
inve
ntor
y va
lues
der
ived
from
perp
etua
l inv
ento
ry r
ecor
ding
met
hod
and
phys
ical
inve
ntor
y co
unt
is n
otre
quir
ed.
(16)
The
FRS
2 st
ates
that
“th
e co
st o
fin
vent
orie
s sh
all c
ompr
ise
all c
ost
ofpu
rcha
ses
and
othe
r co
sts
incu
rred
in b
ring
ing
the
inve
ntor
ies
to th
eir
pres
ent
loca
tion
and
cond
ition
.”Pr
epai
d ex
pens
es o
r ex
pens
es p
ayab
leon
pur
chas
e ar
e ex
clud
ed. I
n ad
ditio
n,ad
just
men
ts to
cos
ts o
f pur
chas
es th
atw
ill a
ffec
t co
st o
f sal
es a
nd e
ndin
gin
vent
ory
are
excl
uded
. Adj
ustm
ent
to in
vent
ory
valu
e in
clud
es o
nly
impa
irm
ent
loss
on
inve
ntor
y.
44
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
(17)
Sce
nari
os to
exc
lude
: (i)
m
ore
than
one
fina
ncia
l per
iod,
(ii
) be
ginn
ing
inve
ntor
y co
mpr
isin
g m
ore
than
one
bat
ch o
f goo
ds,
(iii)
a ba
tch
of g
oods
with
onl
y va
lue
or
quan
tity
(iv) c
ost
of s
ales
mea
sure
d by
oth
er
met
hods
bes
ides
FIF
O to
an
entir
e ba
tch
or b
atch
es o
f goo
ds, w
ith
parti
al a
ppor
tionm
ent
of a
ny b
atch
(18)
Cal
cula
ting
unit
cos
t, d
eriv
ing
inve
ntor
y va
lue
from
uni
t co
st a
nd q
uanti
ty,
and
reco
rdin
g in
sto
ck c
ards
are
not
re
quir
ed, a
nd g
oods
ret
urne
d fr
om
cust
omer
s w
ill n
ot le
ad to
ret
urn
of th
e sa
me
good
s to
the
supp
lier
(19)
Pre
para
tion
of im
pair
men
t lo
ss in
the
inve
ntor
y le
dger
acc
ount
is n
ot r
equi
red
2.7.
3 Tr
ade
rece
ivab
les
1) W
hy d
o bu
sine
sses
gr
ant
cred
it to
cu
stom
ers?
2) H
ow d
o bu
sine
sses
m
anag
e tr
ade
rece
ivab
les?
Cont
extu
al
Trad
e re
ceiv
able
s m
an-
agem
ent
Trad
e re
ceiv
able
s m
anag
emen
t•
Und
erst
and
why
bus
ines
ses
give
cre
dit
to
cust
omer
s to
incr
ease
rev
enue
• U
nder
stan
d ho
w b
usin
esse
s m
anag
e an
d m
ake
deci
sion
s ab
out
trad
e re
ceiv
able
s th
roug
h co
nsid
erin
g th
e cr
edit
wor
thin
ess
Trad
e re
ceiv
able
s m
anag
emen
t•
anal
yse,
eva
luat
e an
d m
ake
deci
sion
s ab
out
the
cred
it w
orth
ines
s of
exi
sting
an
d ne
w c
usto
mer
s/tr
ade
rece
ivab
les
by
cons
ider
ing
both
acc
ounti
ng a
nd n
on-
acco
untin
g in
form
ation
45
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
3) W
hat
are
the
tran
sacti
ons
invo
lvin
gtr
ade
rece
ivab
les?
4) H
ow a
re tr
ade
rece
ivab
les
pres
ente
d in
fina
ncia
lst
atem
ents
?
Conc
eptu
al•
Acc
ounti
ng a
ndno
n-ac
coun
ting
info
rmati
on•
Rele
vanc
e of
info
rmati
on•
Estim
ated
loss
vs
actu
al lo
ss•
Mat
chin
g th
eory
•Pr
uden
ce th
eory
•Va
luati
on o
f ass
ets
–ge
nera
l pro
visi
onfo
r al
low
ance
for
impa
irm
ent
of tr
ade
rece
ivab
les
•Im
pair
men
t lo
ss o
ntr
ade
rece
ivab
les
Proc
edur
alRe
cord
tran
sacti
ons
rela
ted
to tr
ade
rece
ivab
les
and
any
adju
stm
ents
on
trad
e re
ceiv
able
s in
th
e jo
urna
l, le
dger
ac
coun
ts a
nd fi
nanc
ial
stat
emen
ts
of e
xisti
ng a
nd n
ew c
usto
mer
s/
trad
e re
ceiv
able
s by
con
side
ring
bo
th a
ccou
nting
and
non
-acc
ounti
ng
info
rmati
on-
acco
untin
g in
form
ation
: tra
dere
ceiv
able
s ba
lanc
e, c
redi
t te
rms
and
cash
dis
coun
t, n
umbe
r of
day
s tr
ade
rece
ivab
les
are
over
due,
exi
sting
cust
omer
s’ h
isto
ry o
f rep
aym
ent,
rat
eof
trad
e re
ceiv
able
turn
over
(tim
es),
trad
e re
ceiv
able
col
lecti
on p
erio
d(d
ays)
-no
n-ac
coun
ting
info
rmati
on in
clud
eson
ly (2
0) th
e fo
llow
ing:
(i)ec
onom
ic o
utlo
ok(ii
)sp
ecifi
c in
dust
ry o
utlo
ok(ii
i) re
puta
tion
of c
usto
mer
s (e
.g.
soci
ally
res
pons
ible
, his
tory
of t
hebu
sine
ss)
(iv) c
usto
mer
s’ h
isto
ry o
f rep
aym
ent
Acc
ounti
ng th
eori
es•
Mat
chin
g th
eory
•Pr
uden
ce th
eory
Acc
ounti
ng fo
r tr
ansa
ction
s•
Acc
ounti
ng fo
r tr
ansa
ction
s aff
ectin
gtr
ade
rece
ivab
les
of a
trad
ing
busi
ness
:-
cred
it s
ales
and
sal
es r
etur
ns
Acc
ounti
ng th
eori
es•
expl
ain
the
acco
untin
g of
impa
irm
ent
loss
on
trad
e re
ceiv
able
s in
rel
ation
tore
leva
nt a
ccou
nting
theo
ries
Acc
ounti
ng fo
r tr
ansa
ction
s•
defin
e tr
ade
disc
ount
•ex
plai
n w
hy a
trad
e di
scou
nt is
giv
en
•de
fine
cash
dis
coun
t
•ex
plai
n w
hy a
cas
h di
scou
nt is
giv
en
•di
sting
uish
bet
wee
n tr
ade
and
cash
disc
ount
s
•ca
lcul
ate
the
trad
e di
scou
nt a
t th
e sa
le o
fan
d re
turn
of g
oods
•ca
lcul
ate
the
cash
dis
coun
t
•pr
epar
e th
e jo
urna
l ent
ries
to r
ecor
dtr
ansa
ction
s aff
ectin
g tr
ade
rece
ivab
les
•pr
epar
e th
e jo
urna
l ent
ries
on
allo
wan
cefo
r im
pair
men
t of
trad
e re
ceiv
able
s
•pr
epar
e a
trad
e re
ceiv
able
ledg
er a
ccou
nt
46
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
- ca
sh d
isco
unts
and
trad
e di
scou
nts,
in
clud
ing
thei
r pu
rpos
es a
nd
calc
ulati
ons
- w
rite
-off
of f
ull o
r pa
rtial
am
ount
of
debt
-
rece
ipts
in fu
ll or
par
tial a
mou
nt o
f de
bt o
wed
- di
shon
oure
d ch
eque
s •
Acc
ounti
ng fo
r tr
ansa
ction
s aff
ectin
g tr
ade
rece
ivab
les
of a
ser
vice
bus
ines
s:
- se
rvic
es p
rovi
ded
on c
redi
t-
cash
dis
coun
ts a
nd tr
ade
disc
ount
s,
incl
udin
g th
eir
purp
oses
and
ca
lcul
ation
s-
wri
te-o
ff o
f ful
l or
parti
al a
mou
nt o
f de
bt
- re
ceip
ts in
or
parti
al a
mou
nt o
f deb
t ow
ed
- di
shon
oure
d ch
eque
s
Valu
ation
• Va
luati
on o
f tra
de r
ecei
vabl
es (2
1)-
trad
e re
ceiv
able
s re
pres
ent
the
colle
ction
s in
the
imm
edia
te fu
ture
- al
low
ance
for
impa
irm
ent
of tr
ade
rece
ivab
les
is a
n es
timat
e of
the
valu
e of
deb
ts th
at m
ay b
e un
colle
ctibl
e in
th
e fu
ture
(22)
• in
terp
ret
the
(i) tr
ade
rece
ivab
les,
(ii)
allo
wan
ce fo
r im
pair
men
t of
trad
e re
ceiv
able
s, (i
ii) im
pair
men
t lo
ss o
n tr
ade
rece
ivab
les
ledg
er a
ccou
nts
• an
alys
e th
e eff
ects
of c
ash
disc
ount
on
pro
fit fo
r th
e pe
riod
and
trad
e re
ceiv
able
s
• an
alys
e th
e eff
ects
of c
hang
es in
al
low
ance
for
impa
irm
ent
of tr
ade
rece
ivab
les
and
impa
irm
ent
loss
on
trad
e re
ceiv
able
s on
the
profi
t/lo
ss fo
r th
e pe
riod
and
trad
e re
ceiv
able
s
Valu
ation
• st
ate
the
valu
ation
met
hod
for
trad
e re
ceiv
able
s in
the
Stat
emen
t of
Fin
anci
al
Posi
tion
Pres
enta
tion
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on a
nd S
tate
men
t of
Fin
anci
al P
erfo
rman
ce s
how
ing
the
pres
enta
tion
of tr
ade
rece
ivab
les,
di
scou
nt a
llow
ed, a
llow
ance
for
impa
irm
ent
of tr
ade
rece
ivab
les,
and
im
pair
men
t lo
ss o
n tr
ade
rece
ivab
les
47
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
- ca
lcul
ation
and
acc
ounti
ng o
f al
low
ance
for
impa
irm
ent
of tr
ade
rece
ivab
les
- a
decr
ease
in a
llow
ance
is tr
eate
d as
a
redu
ction
aga
inst
exp
ense
s in
the
Stat
emen
t of
Fin
anci
al P
erfo
rman
ce
Pres
enta
tion
• Pr
esen
tatio
n of
trad
e re
ceiv
able
s,
allo
wan
ce fo
r im
pair
men
t of
trad
e re
ceiv
able
s, a
nd im
pair
men
t lo
ss o
n tr
ade
rece
ivab
les
in th
e St
atem
ent
of F
inan
cial
Po
sitio
n an
d St
atem
ent
of F
inan
cial
Pe
rfor
man
ce
Not
es(2
0) In
form
ation
abo
ut e
cono
mic
out
look
an
d sp
ecifi
c in
dust
ry o
utlo
ok a
re to
be
exp
licitl
y gi
ven
(stu
dent
s ar
e no
t ex
pect
ed to
rea
d an
d in
terp
ret
rela
ted
grap
hs, c
hart
s or
any
form
s of
rep
orts
to
ext
ract
info
rmati
on)
(21)
Sce
nari
os to
incl
ude
only
: (i)
pr
ovid
ing
allo
wan
ce fo
r th
e fir
st
time,
(ii)
incr
ease
in a
llow
ance
ove
r pr
ior
year
, and
(iii)
decr
ease
in a
llow
ance
ove
r pr
ior
year
48
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
(22)
Sin
gapo
re’s
Fin
anci
al R
epor
ting
Stan
dard
109
on
Fina
ncia
l Ins
trum
ents
st
ates
that
“w
hen
mak
ing
the
asse
ssm
ent
of c
redi
t ri
sk, a
n en
tity
shal
l us
e th
e ch
ange
in th
e ri
sk o
f a d
efau
lt oc
curr
ing
over
the
expe
cted
life
of
the
finan
cial
inst
rum
ent
inst
ead
of
the
chan
ge in
the
amou
nt o
f exp
ecte
d cr
edit
loss
es”.
Thu
s, th
e ge
nera
l pr
ovis
ion
for
allo
wan
ce fo
r im
pair
men
t of
trad
e re
ceiv
able
s w
ill b
e us
ed fo
r th
is
sylla
bus.
The
pre
para
tion
of a
llow
ance
fo
r im
pair
men
t of
trad
e re
ceiv
able
s an
d im
pair
men
t lo
ss o
n tr
ade
rece
ivab
les
ledg
er a
ccou
nts
are
not
requ
ired
2.7.
4 N
on-c
urre
nt a
sset
s
1) W
hat
is th
e di
ffer
ence
bet
wee
n ca
pita
l and
rev
enue
ex
pend
itur
e?
2) H
ow d
o bu
sine
sses
m
anag
e th
e bu
ying
(w
hat
to b
uy) o
f non
-cu
rren
t as
sets
?
Cont
extu
al•
Man
agin
g bu
ying
or
renti
ng n
on-c
urre
nt
asse
ts•
Man
agin
g bu
ying
of
non-
curr
ent
asse
ts•
Sale
of n
on-c
urre
nt
asse
ts
Non
-cur
rent
ass
ets
man
agem
ent
• U
nder
stan
d th
e ty
pes
of e
xpen
ditu
re th
at
busi
ness
es c
an c
apit
alis
e •
Und
erst
and
how
bus
ines
ses
mak
e de
cisi
ons
abou
t bu
ying
or
renti
ng
non-
curr
ent
asse
ts b
y co
nsid
erin
g bo
th a
ccou
nting
and
non
-acc
ounti
ng
info
rmati
on-
acco
untin
g in
form
ation
: (i)
curr
ent
finan
cial
sit
uatio
n of
the
busi
ness
Non
-cur
rent
ass
ets
man
agem
ent
• an
alys
e, e
valu
ate
and
mak
e de
cisi
ons
abou
t w
heth
er to
buy
or
rent
non
-cur
rent
as
sets
by
cons
ider
ing
both
acc
ounti
ng
and
non-
acco
untin
g in
form
ation
• an
alys
e, e
valu
ate
and
mak
e de
cisi
ons
abou
t th
e bu
ying
of n
on-c
urre
nt a
sset
s by
con
side
ring
bot
h ac
coun
ting
and
non-
acco
untin
g in
form
ation
49
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
3) W
hat
are
the
tran
sacti
ons
invo
lvin
gno
n-cu
rren
t as
sets
?
4) H
ow a
re n
on-c
urre
ntas
sets
pre
sent
ed in
finan
cial
sta
tem
ents
?
Conc
eptu
al•
Capi
tal v
s re
venu
eex
pend
itur
e•
R ele
vanc
e of
info
rmati
on•
Mat
eria
lity
theo
ry•
Mat
chin
g th
eory
•Co
nsis
tenc
y th
eory
•Pr
uden
ce th
eory
•Va
luati
on o
f non
-cu
rren
t as
sets
– a
tco
st le
ss a
ccum
ulat
edde
prec
iatio
n•
Gai
n/lo
ss o
n sa
le o
fno
n-cu
rren
t as
set
=Sa
le p
roce
eds
-N
et B
ook
valu
e
Proc
edur
al•
Reco
rd tr
ansa
ction
sre
late
d to
non
-cu
rren
t as
sets
and
any
adju
stm
ents
for
non-
curr
ent
asse
ts
(ii) c
ost
of o
wne
rshi
p ve
rsus
ren
ting
-no
n-ac
coun
ting
info
rmati
on in
clud
eson
ly:
adva
ntag
es o
r di
sadv
anta
ges
of b
uyin
g or
ren
ting
•U
nder
stan
d ho
w b
usin
esse
s m
anag
e an
dm
ake
deci
sion
s ab
out
the
acqu
isiti
onof
non
-cur
rent
s as
sets
(wha
t to
buy
) by
cons
ider
ing
both
acc
ounti
ng a
nd n
on-
acco
untin
g in
form
ation
-ac
coun
ting
info
rmati
on: p
rice
of n
on-
curr
ent
asse
ts, i
nsta
llatio
n co
st, c
ost
of m
aint
aini
ng th
e no
n-cu
rren
t as
sets
,an
d re
late
d re
pair
cos
t-
non-
acco
untin
g in
form
ation
incl
udes
only
the
follo
win
g:(i)
purp
ose
of th
e no
n-cu
rren
t as
set
(ii)
feat
ures
of t
he n
on-c
urre
nt a
sset
(23)
(iii)
cust
omer
rev
iew
s of
the
non-
curr
ent
asse
ts(iv
)w
arra
nty
Acc
ounti
ng th
eori
es•
Mat
chin
g th
eory
Acc
ounti
ng th
eori
es•
expl
ain
the
appl
icati
on o
f the
mat
eria
lity
theo
ry o
n th
e tr
eatm
ent
of c
apit
al a
ndre
venu
e ex
pend
itur
e
•ex
plai
n th
e ne
ed to
cha
rge
depr
ecia
tion
in r
elati
on to
rel
evan
t ac
coun
ting
theo
ries
•ex
plai
n th
e pr
esen
tatio
n of
net
boo
kva
lue
in r
elati
on to
rel
evan
t ac
coun
ting
theo
ries
Acc
ounti
ng fo
r tr
ansa
ction
sCa
pita
l and
rev
enue
exp
endi
ture
•de
fine
capi
tal a
nd r
even
ue e
xpen
ditu
re
•di
sting
uish
bet
wee
n ca
pita
l and
rev
enue
expe
ndit
ure
•cl
assi
fy a
ccou
nting
tran
sacti
ons
as c
apit
alan
d re
venu
e ex
pend
itur
e
•an
alys
e th
e eff
ects
of d
iffer
ence
s in
clas
sific
ation
and
trea
tmen
t of
cap
ital
and
reve
nue
expe
ndit
ure
on fi
nanc
ial
stat
emen
ts
50
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
in th
e jo
urna
l, le
dger
acc
ount
s an
d fin
anci
al s
tate
men
ts•
Reco
rd tr
ansa
ction
s re
late
d to
the
sale
of
non-
curr
ent
asse
ts
in th
e jo
urna
l and
fin
anci
al s
tate
men
ts
• Co
nsis
tenc
y th
eory
• M
ater
ialit
y th
eory
• Pr
uden
ce th
eory
Acc
ounti
ng fo
r tr
ansa
ction
s•
Acc
ounti
ng fo
r re
venu
e ve
rsus
cap
ital
ex
pend
itur
e-
the
acco
untin
g tr
eatm
ent
of c
apit
al
and
reve
nue
expe
ndit
ure,
spe
cific
ally
w
heth
er e
xpen
ditu
re in
curr
ed in
re
latio
n to
a n
on-c
urre
nt a
sset
is to
be
cap
ital
ised
as
part
of t
he n
on-
curr
ent
asse
t’s
cost
or
reco
rded
in th
e St
atem
ent
of F
inan
cial
Per
form
ance
as
an e
xpen
se-
exam
ples
of c
apit
al a
nd r
even
ue
expe
ndit
ure
- ex
pend
itur
e on
non
-cur
rent
ass
ets
subs
eque
nt to
acq
uisi
tion
can
only
be
capi
talis
ed if
it in
crea
ses
the
capa
city
an
d us
eful
life
of t
he n
on-c
urre
nt
asse
ts a
nd im
prov
es th
eir
func
tion
- eff
ects
of e
rron
eous
cla
ssifi
catio
n an
d tr
eatm
ent
of e
xpen
ditu
re o
n fin
anci
al
stat
emen
ts•
Acc
ounti
ng fo
r pu
rcha
se o
f non
-cur
rent
as
sets
(24)
- co
st o
f non
-cur
rent
ass
ets
com
pris
ing
Purc
hase
of n
on-c
urre
nt a
sset
s•
prep
are
the
jour
nal e
ntri
es o
n pu
rcha
ses
of n
on-c
urre
nt a
sset
s
• pr
epar
e th
e no
n-cu
rren
t as
set
ledg
er
acco
unt
to s
how
the
purc
hase
and
sal
e of
no
n-cu
rren
t as
sets
• in
terp
ret
the
non-
curr
ent
asse
t le
dger
ac
coun
t
Dep
reci
ation
and
acc
umul
ated
dep
reci
ation
•
defin
e de
prec
iatio
n an
d ac
cum
ulat
ed
depr
ecia
tion
• st
ate
the
caus
es o
f dep
reci
ation
• st
ate
and
disti
ngui
sh th
e de
prec
iatio
n m
etho
ds o
f (i)
stra
ight
-line
and
(ii)
redu
cing
-bal
ance
met
hods
• ex
plai
n th
e su
itab
ility
of s
elec
ted
depr
ecia
tion
met
hods
for
diff
eren
t ty
pes
of n
on-c
urre
nt a
sset
s
• ca
lcul
ate
depr
ecia
tion
and
accu
mul
ated
de
prec
iatio
n ac
cord
ing
to th
e (i)
str
aigh
t-lin
e an
d (ii
) red
ucin
g-ba
lanc
e m
etho
ds
• ca
lcul
ate
the
rate
of d
epre
ciati
on, l
engt
h of
use
ful l
ife, a
nnua
l dep
reci
ation
,
51
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
purc
hase
pri
ces
and
the
cost
s of
brin
ging
the
non-
curr
ent
asse
ts to
op
erati
ng c
ondi
tion
• A
ccou
nting
for
depr
ecia
tion
and
accu
mul
ated
dep
reci
ation
(dep
reci
ation
to
dat
e) (2
5)
- ca
uses
of d
epre
ciati
on
- m
etho
ds o
f dep
reci
ation
o
stra
ight
line
o
redu
cing
bal
ance
-
suit
abili
ty o
f dep
reci
ation
met
hods
for
diff
eren
t cl
asse
s of
non
-cur
rent
ass
ets
- ne
t bo
ok v
alue
rep
rese
nts
the
estim
ated
futu
re e
cono
mic
val
ue o
f a
non-
curr
ent
asse
t -
accu
mul
ated
dep
reci
ation
is a
n ap
prox
imati
on o
f the
red
uctio
n in
ec
onom
ic v
alue
of a
non
-cur
rent
ass
et
• A
ccou
nting
for
the
sale
of n
on-c
urre
nt
asse
ts (2
6)
Valu
ation
• Va
luati
on o
f non
-cur
rent
ass
ets
- at
cos
t le
ss a
ccum
ulat
ed d
epre
ciati
on
accu
mul
ated
dep
reci
ation
and
net
boo
k va
lue
or c
ost
of n
on-c
urre
nt a
sset
s
• pr
epar
e th
e jo
urna
l ent
ries
on
depr
ecia
tion
and
accu
mul
ated
de
prec
iatio
n
• an
alys
e th
e eff
ects
of d
iffer
ent
depr
ecia
tion
met
hods
on
profi
t/lo
ss fo
r th
e pe
riod
and
net
boo
k va
lue
of n
on-
curr
ent
asse
ts
• in
terp
ret
the
(i) d
epre
ciati
on a
nd
(ii) a
ccum
ulat
ed d
epre
ciati
on le
dger
ac
coun
ts
Sale
of n
on-c
urre
nt a
sset
s•
calc
ulat
e th
e ga
in o
r lo
ss o
n th
e sa
le o
f no
n-cu
rren
t as
sets
• pr
epar
e th
e jo
urna
l ent
ries
on
the
sale
of
non-
curr
ent
asse
ts
• in
terp
ret
the
sale
of n
on-c
urre
nt a
sset
le
dger
acc
ount
Valu
ation
• st
ate
the
valu
ation
met
hod
for
non-
curr
ent
asse
ts in
the
Stat
emen
t of
Fi
nanc
ial P
ositi
on
52
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
Pres
enta
tion
•Pr
esen
tatio
n of
non
-cur
rent
ass
ets
atne
t bo
ok v
alue
(cos
t le
ss a
ccum
ulat
edde
prec
iatio
n) in
the
Stat
emen
t of
Fina
ncia
l Pos
ition
•Pr
esen
tatio
n of
dep
reci
ation
and
gai
n/lo
ss o
n th
e sa
le o
f non
-cur
rent
ass
ets
inth
e St
atem
ent
of F
inan
cial
Per
form
ance
Not
es(2
3)Th
e fe
atur
es o
f the
non
-cur
rent
ass
ets
to b
e co
nsid
ered
dur
ing
purc
hase
ref
ers
to p
ossi
ble
prod
uct
spec
ifica
tions
suc
has
effi
cien
cy o
f the
pro
duct
.(2
4)Sc
enar
io to
incl
ude
only
: pur
chas
esof
non
-cur
rent
ass
ets
by c
ash
and
oncr
edit,
and
con
trib
ution
of n
on-c
urre
ntas
sets
by
the
owne
r(2
5)Sc
enar
ios
to in
clud
e on
ly: p
artia
l(b
y w
hole
mon
th) o
r fu
ll ye
ar o
fde
prec
iatio
n in
the
year
of a
cqui
sitio
n.Th
e pr
epar
ation
of a
ccum
ulat
edde
prec
iatio
n an
d de
prec
iatio
n le
dger
acco
unts
are
not
req
uire
d.
Pres
enta
tion
•pr
epar
e an
ext
ract
of S
tate
men
t of
Fina
ncia
l Pos
ition
and
Sta
tem
ent
of F
inan
cial
Per
form
ance
sho
win
gth
e pr
esen
tatio
n of
net
boo
k va
lue,
accu
mul
ated
dep
reci
ation
and
depr
ecia
tion
•pr
epar
e an
ext
ract
of t
he S
tate
men
tof
Fin
anci
al P
erfo
rman
ce s
how
ing
the
pres
enta
tion
of g
ain
or lo
ss o
n th
e sa
le o
fno
n-cu
rren
t as
sets
53
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
(26)
The
pre
para
tion
of th
e sa
le o
f non
-cu
rren
t as
set
ledg
er a
ccou
nt is
not
re
quir
ed a
nd o
nly
the
follo
win
g sc
enar
ios
are
incl
uded
:(i)
st
artin
g fr
om p
urch
ase
of o
ne n
on-
curr
ent
asse
t th
at is
sub
sequ
ently
so
ld, w
ith o
r w
ithou
t re
plac
emen
t(ii
) st
artin
g fr
om p
urch
ase
of t
wo
or m
ore
non-
curr
ent
asse
ts a
nd
subs
eque
ntly
sol
d on
e of
them
, with
or
with
out
repl
acem
ent
(iii)
star
ting
with
bal
ance
s in
the
non-
curr
ent
asse
t an
d ac
cum
ulat
ed
depr
ecia
tion
ledg
er a
ccou
nts
and
one
of th
e no
n-cu
rren
t as
sets
is s
old
in th
e cu
rren
t fin
anci
al p
erio
d (iv
) pa
rtial
(by
who
le m
onth
) or
full
year
of d
epre
ciati
on in
the
year
of
purc
hase
but
no
depr
ecia
tion
in th
e ye
ar o
f sal
e(v
) ei
ther
the
stra
ight
-line
or
redu
cing
-ba
lanc
e de
prec
iatio
n m
etho
ds
54
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
2.8
Liab
iliti
esTh
is s
ectio
n lo
oks
into
the
liabi
lity
item
s in
a S
tate
men
t of
Fin
anci
al P
ositi
on a
nd th
e ad
just
men
ts to
be
mad
e to
thes
e ite
ms
at th
e en
d of
a
finan
cial
per
iod.
2.8.
1 Tr
ade
paya
bles
1) H
ow d
o bu
sine
sses
m
anag
e tr
ade
paya
bles
?
2) W
hat
are
the
tran
sacti
ons
invo
lvin
g tr
ade
paya
bles
?
3) H
ow a
re tr
ade
paya
bles
pre
sent
ed in
fin
anci
al s
tate
men
ts?
Cont
extu
alM
anag
ing
supp
liers
and
pu
rcha
sing
on
cred
it Co
ncep
tual
Liab
ilitie
s
Proc
edur
alRe
cord
tran
sacti
ons
rela
ted
to tr
ade
paya
bles
in th
e jo
urna
l, le
dger
acc
ount
s an
d fin
anci
al s
tate
men
ts
Supp
lier
man
agem
ent
• U
nder
stan
d w
hy b
usin
esse
s bu
y on
cre
dit
inst
ead
of p
ayin
g ca
sh
• U
nder
stan
d ho
w b
usin
esse
s m
anag
e su
pplie
rs a
nd d
ecid
e w
hich
sup
plie
r to
bu
y fr
om b
y co
nsid
erin
g bo
th a
ccou
nting
an
d no
n-ac
coun
ting
info
rmati
on.
- ac
coun
ting
info
rmati
on: c
ost
of
inve
ntor
y, c
redi
t te
rms
and
cash
di
scou
nt, c
ost
of s
uppl
ies,
cos
t of
no
n-cu
rren
t as
sets
, del
iver
y ch
arge
s,
trad
e di
scou
nt a
nd c
ost
of s
ervi
ces
(inst
alla
tion
and
mai
nten
ance
)-
non-
acco
untin
g in
form
ation
incl
udes
on
ly th
e fo
llow
ing:
(i)
loca
l or
over
seas
sup
plie
r(ii
) aft
er-s
ales
ser
vice
(iii)
retu
rn p
olic
y(iv
) on
line
vs b
rick
-and
-mor
tar
supp
lier
(v)
repu
tatio
n of
sup
plie
r (e
.g.,
soci
ally
res
pons
ible
, his
tory
of t
he
busi
ness
)
Supp
lier
man
agem
ent
• an
alys
e, e
valu
ate
and
mak
e de
cisi
ons
abou
t w
hich
sup
plie
r to
buy
from
by
cons
ider
ing
both
acc
ounti
ng a
nd n
on-
acco
untin
g in
form
ation
Acc
ounti
ng fo
r tr
ansa
ction
s•
defin
e tr
ade
disc
ount
• ex
plai
n w
hy a
trad
e di
scou
nt is
rec
eive
d
• de
fine
cash
dis
coun
t
• ex
plai
n w
hy a
cas
h di
scou
nt is
rec
eive
d
• di
sting
uish
bet
wee
n tr
ade
and
cash
di
scou
nts
• ca
lcul
ate
the
trad
e di
scou
nt a
t th
e pu
rcha
se a
nd r
etur
n of
goo
ds
• ca
lcul
ate
the
cash
dis
coun
t at
pay
men
t
• pr
epar
e th
e jo
urna
l ent
ries
to r
ecor
d tr
ansa
ction
s aff
ectin
g tr
ade
paya
bles
55
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
(vi)
war
rant
y
Acc
ounti
ng fo
r tr
ansa
ction
s•
Acc
ounti
ng fo
r tr
ansa
ction
s aff
ectin
g th
e cr
edit
pur
chas
e of
goo
ds a
nd s
ervi
ces
and
non-
curr
ent
asse
ts:
- cr
edit
pur
chas
es o
f goo
ds a
nd s
ervi
ces
- cr
edit
pur
chas
es o
f non
-cur
rent
ass
ets
- re
turn
s of
goo
ds
- ca
sh d
isco
unts
and
trad
e di
scou
nts,
in
clud
ing
thei
r pu
rpos
es a
nd
calc
ulati
ons
- fu
ll or
par
tial p
aym
ents
- fr
eigh
t ch
arge
s
Pre
sent
ation
• Pr
esen
tatio
n of
trad
e pa
yabl
es in
the
Stat
emen
t of
Fin
anci
al P
ositi
on
• pr
epar
e a
trad
e pa
yabl
e le
dger
acc
ount
• in
terp
ret
a tr
ade
paya
ble
ledg
er a
ccou
nt
• an
alys
e th
e eff
ects
of c
ash
disc
ount
on
pro
fit/l
oss
for
the
peri
od a
nd tr
ade
paya
bles
Pres
enta
tion
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
erfo
rman
ce s
how
ing
the
pres
enta
tion
of d
isco
unt
rece
ived
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on s
how
ing
the
pres
enta
tion
of tr
ade
paya
bles
2.8.
2 L
ong-
term
bor
row
ings
1) W
hat
are
the
tran
sacti
ons
for
long
-te
rm b
orro
win
gs?
Cont
extu
alO
btai
ning
loan
s fo
r bu
sine
ss u
se
Long
-ter
m b
orro
win
gs m
anag
emen
t•
Und
erst
and
why
bus
ines
ses
obta
in lo
ans
to fi
nanc
e it
s bu
sine
ss o
pera
tions
Acc
ounti
ng th
eori
es•
expl
ain
the
acco
untin
g of
long
-ter
m
borr
owin
gs in
tere
st e
xpen
se in
rel
ation
to
rele
vant
acc
ounti
ng th
eori
es
56
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
2) H
ow a
re lo
ng-
term
bor
row
ings
pr
esen
ted
in fi
nanc
ial
stat
emen
ts?
Conc
eptu
al•
Curr
ent
vs n
on-
curr
ent
liabi
lities
• M
atch
ing
theo
ry•
Acc
rual
bas
is o
f ac
coun
ting
Proc
edur
alRe
cord
tran
sacti
ons
rela
ted
to lo
ans
and
loan
inte
rest
s in
th
e jo
urna
l, le
dger
ac
coun
ts a
nd fi
nanc
ial
stat
emen
ts
Acc
ounti
ng th
eori
es•
Mat
chin
g th
eory
•
Acc
rual
bas
is o
f acc
ounti
ng
Acc
ounti
ng fo
r tr
ansa
ction
s•
Acc
ounti
ng fo
r ne
w lo
an a
nd lo
an
repa
ymen
t (2
7)•
Recl
assi
fy p
ortio
n of
liab
ility
pay
able
w
ithi
n th
e ne
xt fi
nanc
ial y
ear
as c
urre
nt
liabi
lity
• A
ccou
nting
for
inte
rest
exp
ense
and
in
tere
st e
xpen
se p
ayab
le (2
7)
Pres
enta
tion
• Pr
esen
tatio
n of
long
-ter
m b
orro
win
gs,
inte
rest
exp
ense
and
inte
rest
exp
ense
pa
yabl
e in
the
Stat
emen
t of
Fin
anci
al
Perf
orm
ance
and
Sta
tem
ent
of F
inan
cial
Po
sitio
n
Not
es(2
7) T
he fi
nanc
ial y
ear
end
for
scen
ario
s th
at in
clud
e th
e ta
king
up
of lo
ng-
term
bor
row
ing
will
alw
ays
end
on
31 D
ecem
ber.
The
obta
inin
g of
loan
s,
repa
ymen
t of
loan
s an
d in
tere
st p
aid
can
take
pla
ce a
t an
y tim
e du
ring
the
finan
cial
yea
r. Lo
ans
are
assu
med
to
Acc
ounti
ng fo
r tr
ansa
ction
s •
disti
ngui
sh b
etw
een
bank
loan
and
ban
k ov
erdr
aft
• ca
lcul
ate
inte
rest
exp
ense
and
inte
rest
ex
pens
e pa
yabl
e
• pr
epar
e th
e jo
urna
l ent
ries
on
new
loan
, lo
an r
epay
men
t, in
tere
st e
xpen
se a
nd
inte
rest
exp
ense
pay
able
• pr
epar
e an
d in
terp
ret
long
-ter
m
borr
owin
gs le
dger
acc
ount
• in
terp
ret
the
inte
rest
exp
ense
ledg
er
acco
unts
wit
h ad
just
men
ts fo
r in
tere
st
expe
nse
paya
ble
Pres
enta
tion
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on a
nd S
tate
men
t of
Fin
anci
al P
erfo
rman
ce s
how
ing
the
pres
enta
tion
of lo
an, i
nter
est
expe
nse
paya
ble
and
inte
rest
exp
ense
57
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
be r
epai
d in
equ
al in
stal
men
ts o
ver
the
loan
tenu
re. T
his
sylla
bus
does
not
in
clud
e lo
ans
borr
owed
on
a sh
ort-
term
bas
is.
2.9
Equi
ties
This
sec
tion
look
s in
to th
e eq
uity
item
s of
bot
h a
sole
pro
prie
tors
hip
and
a pr
ivat
e lim
ited
com
pany
in a
Sta
tem
ent
of F
inan
cial
Pos
ition
, and
th
e ad
just
men
ts to
be
mad
e to
thes
e ite
ms
at th
e en
d of
a fi
nanc
ial p
erio
d.
2.9.
1 Ca
pita
l and
sha
re c
apit
al
1) H
ow a
re th
e so
le
prop
riet
or’s
and
sh
areh
olde
rs’
inte
rest
s in
the
busi
ness
pre
sent
ed in
fin
anci
al s
tate
men
ts?
Cont
extu
al•
Sole
pro
prie
tors
hip
• Pr
ivat
e lim
ited
com
pany
Conc
eptu
al
• A
mou
nts
repo
rted
ar
e as
at
a po
int
in
time
• A
ccou
nting
enti
ty
theo
ry
Proc
edur
alRe
cord
tran
sacti
ons
rela
ted
to th
e so
le
prop
riet
or’s
and
sh
areh
olde
rs’ i
nter
ests
in
the
jour
nal,
ledg
er
acco
unts
and
fina
ncia
l st
atem
ents
Acc
ounti
ng th
eori
es•
Acc
ounti
ng e
ntity
theo
ry
Acc
ounti
ng fo
r tr
ansa
ction
s•
Acc
ounti
ng fo
r tr
ansa
ction
s aff
ectin
g th
e so
le p
ropr
ieto
r’s
inte
rest
(ow
ner’
s eq
uity
) (2
8)•
Acc
ounti
ng fo
r tr
ansa
ction
s aff
ectin
g th
e sh
areh
olde
rs’ i
nter
ests
(sha
reho
lder
s’
equi
ty) (
29):
-
Issu
ance
of c
apit
al o
nly
Pres
enta
tion
• Pr
esen
tatio
n of
cap
ital
and
sha
re c
apit
al
in th
e St
atem
ent
of F
inan
cial
Pos
ition
Acc
ounti
ng th
eori
es•
expl
ain
the
acco
untin
g of
cap
ital
and
sh
are
capi
tal i
n re
latio
n to
rel
evan
t ac
coun
ting
theo
ries
Acc
ounti
ng fo
r tr
ansa
ction
s•
calc
ulat
e sh
are
capi
tal
• pr
epar
e th
e jo
urna
l ent
ries
on
capi
tal
cont
ribu
ted
and
shar
e ca
pita
l
• pr
epar
e th
e ca
pita
l and
sha
re c
apit
al
ledg
er a
ccou
nts
• In
terp
ret
the
capi
tal a
nd s
hare
cap
ital
le
dger
acc
ount
s
• an
alys
e th
e ch
ange
s in
the
owne
r’s
and
shar
ehol
ders
’ equ
ity
to id
entif
y th
e re
ason
s fo
r th
e ch
ange
s
58
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
Not
es(2
8) S
cena
rios
to in
clud
e on
ly c
ontr
ibuti
on o
f ca
pita
l in
cash
or
in k
ind
(29)
Sha
reho
lder
s’ in
tere
sts
incl
ude
only
the
follo
win
g(i)
or
dina
ry s
hare
s as
the
unit
of
owne
rshi
p in
the
com
pany
(ii)
issu
ance
of o
rdin
ary
shar
es fu
lly
paid
up
(iii)
calc
ulati
on o
f sha
re c
apita
l bas
ed
on u
nit
issu
e pr
ice
and
quan
tity
issu
ed
Pres
enta
tion
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on s
how
ing
the
pres
enta
tion
of th
e so
le p
ropr
ieto
r’s
inte
rest
in th
e bu
sine
ss a
nd th
e sh
areh
olde
rs’ i
nter
ests
in th
e pr
ivat
e lim
ited
com
pany
2.9.
2 D
raw
ings
1) H
ow d
o bu
sine
sses
re
cord
wit
hdra
wal
s by
sol
e pr
opri
etor
s?
Cont
extu
alO
wne
r w
ithd
raw
s as
-se
ts fr
om b
usin
ess
for
own
use
Conc
eptu
al
• A
mou
nts
repo
rted
ar
e as
at
a po
int
in
time
• A
ccou
nting
enti
ty
theo
ry
Proc
edur
alRe
cord
tran
sacti
ons
rela
ted
to d
raw
ings
Acc
ounti
ng th
eori
es•
Acc
ounti
ng e
ntity
theo
ry
Acc
ounti
ng fo
r tr
ansa
ction
s•
Dra
win
gs in
cas
h or
in k
inds
wou
ld
redu
ce th
e so
le p
ropr
ieto
r’s
equi
ty in
the
Stat
emen
t of
Fin
anci
al P
ositi
on•
Clos
ing
of th
e dr
awin
gs le
dger
acc
ount
to
the
capi
tal l
edge
r ac
coun
t at
the
end
of
the
finan
cial
yea
r
Pres
enta
tion
• Pr
esen
tatio
n of
dra
win
gs in
the
capi
tal
acco
unt
Acc
ounti
ng th
eori
es•
expl
ain
the
acco
untin
g of
dra
win
gs in
re
latio
n to
rel
evan
t ac
coun
ting
theo
ries
Acc
ounti
ng fo
r tr
ansa
ction
s•
defin
e dr
awin
gs
• pr
epar
e th
e jo
urna
l ent
ries
rel
ated
to
draw
ings
and
the
tran
sfer
of d
raw
ings
to
the
capi
tal a
ccou
nt
• pr
epar
e th
e dr
awin
gs le
dger
acc
ount
• in
terp
ret
the
draw
ings
ledg
er a
ccou
nt
• an
alys
e th
e im
pact
of d
raw
ings
on
the
sole
pro
prie
tor’
s eq
uity
59
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
in th
e jo
urna
l, le
dger
ac
coun
ts a
nd fi
nanc
ial
stat
emen
ts
Pres
enta
tion
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on s
how
ing
the
pres
enta
tion
of c
apit
al le
ss d
raw
ings
as
a si
ngle
line
item
2.9.
3 Tr
ansf
er o
f pro
fit/l
oss
for
the
year
and
ret
aine
d ea
rnin
gs
1) H
ow d
o so
le
prop
riet
ors
reco
rd
the
tran
sfer
of p
rofit
fo
r th
e pe
riod
to
capi
tal a
ccou
nt?
2) H
ow d
o pr
ivat
e lim
ited
com
pani
es
reco
rd p
rofit
for
the
year
, div
iden
ds a
nd
tran
sfer
to r
etai
ned
earn
ings
?
Cont
extu
al•
Tran
sfer
of p
rofit
s•
Dec
lara
tion
of
divi
dend
s
Conc
eptu
al•
Am
ount
s re
port
ed a
s at
a p
oint
in ti
me
Proc
edur
alRe
cord
tran
sfer
of
profi
ts a
nd d
ivid
ends
in
the
jour
nal,
ledg
er
acco
unts
and
fina
ncia
l st
atem
ents
Acc
ounti
ng fo
r tr
ansa
ction
s•
Sole
pro
prie
tors
hip
- pr
ofit/
loss
for
the
peri
od is
add
ed/
dedu
cted
to/f
rom
the
capi
tal
- tr
ansf
er o
f pro
fit/l
oss
for
the
year
to
the
sole
pro
prie
tor’
s ca
pita
l led
ger
acco
unt
at th
e en
d of
the
finan
cial
yea
r•
Priv
ate
limite
d co
mpa
ny-
reta
ined
ear
ning
s/ac
cum
ulat
ed lo
sses
: ac
cum
ulati
on o
f pas
t pr
ofit/
loss
less
de
clar
ed d
ivid
ends
o
tran
sfer
of p
rofit
/los
s fo
r th
e fin
anci
al y
ear
to th
e re
tain
ed
earn
ings
ledg
er a
ccou
nt a
t th
e en
d of
th
e fin
anci
al y
ear
o m
ovem
ents
in r
etai
ned
earn
ings
to
incl
ude
only
pro
fit/l
oss
for
the
year
an
d di
vide
nds
decl
ared
dur
ing
the
finan
cial
yea
r
Acc
ounti
ng fo
r tr
ansa
ction
s•
defin
e di
vide
nds
and
reta
ined
ear
ning
s
• ca
lcul
ate
the
endi
ng r
etai
ned
earn
ings
aft
er a
djus
ting
for
profi
t/lo
ss fo
r th
e ye
ar
and
decl
ared
div
iden
d
• pr
epar
e th
e jo
urna
l ent
ries
on
the
tran
sfer
of p
rofit
/los
s fo
r th
e ye
ar to
the
sole
pro
prie
tor’
s ca
pita
l acc
ount
• pr
epar
e th
e jo
urna
l ent
ries
on
the
tran
sfer
of p
rofit
/los
s fo
r th
e ye
ar
to r
etai
ned
earn
ings
, dec
lara
tion
of
divi
dend
s, p
aym
ent
of d
ivid
ends
and
tr
ansf
er o
f div
iden
ds fo
r th
e ye
ar to
re
tain
ed e
arni
ngs
acco
unt
• pr
epar
e th
e ca
pita
l led
ger
acco
unt
show
ing
the
tran
sfer
of p
rofit
s/lo
ss
• pr
epar
e th
e re
tain
ed e
arni
ngs
ledg
er
acco
unt
60
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
- di
vide
nds:
the
retu
rn o
n sh
areh
olde
rs’
inte
rest
s in
the
busi
ness
(30)
o ca
lcul
ation
of d
ecla
red
divi
dend
s ba
sed
on d
ivid
end
per
shar
e an
d qu
antit
y of
issu
ed o
rdin
ary
shar
eso
acco
untin
g fo
r de
clar
ed d
ivid
ends
an
d pa
ymen
t of
div
iden
ds
Pres
enta
tion
• Pr
esen
tatio
n of
the
sole
pro
prie
tor’
s ca
pita
l acc
ount
(aft
er a
ddin
g or
ded
uctin
g pr
ofit
or lo
ss fo
r th
e ye
ar) i
n th
e St
atem
ent
of F
inan
cial
Pos
ition
• Pr
esen
tatio
n of
ret
aine
d ea
rnin
gs o
r ac
cum
ulat
ed lo
sses
in th
e St
atem
ent
of
Fina
ncia
l Pos
ition
Not
e(3
0) D
ivid
ends
incl
udes
onl
y on
e fin
al
divi
dend
pai
d, a
nd th
e de
clar
ed d
ivid
end
is p
aid
out
in fu
ll an
d ex
clud
es th
e de
cisi
on o
n ho
w th
e am
ount
of d
ivid
end
per
shar
e is
arr
ived
at
and
the
lega
l pr
oced
ures
for
decl
ared
div
iden
ds.
• In
terp
ret
the
reta
ined
ear
ning
s le
dger
ac
coun
t
• pr
epar
e th
e di
vide
nds
ledg
er a
ccou
nt
• In
terp
ret
the
divi
dend
s le
dger
acc
ount
• an
alys
e th
e im
pact
of p
rofit
/los
s on
the
owne
r’s
equi
ty
• an
alys
e th
e im
pact
of d
ecla
red
divi
dend
s an
d pr
ofit/
loss
for
the
year
on
reta
ined
ea
rnin
gs a
nd s
hare
hold
ers’
equ
ity
Pres
enta
tion
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on s
how
ing
the
pres
enta
tion
of c
apit
al a
fter
adj
ustin
g fo
r dr
awin
gs a
nd p
rofit
/los
s fo
r th
e ye
ar a
s a
sing
le li
ne it
em
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on s
how
ing
the
pres
enta
tion
of r
etai
ned
earn
ings
/ac
cum
ulat
ed lo
sses
61
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
2.10
Cor
recti
on o
f err
ors
1) H
ow d
o er
rors
occ
ur?
2) H
ow d
o er
rors
aff
ect
the
acco
unts
?
Conc
eptu
alD
oubl
e en
try
• Co
rrec
tion
of e
rror
s no
t re
veal
ed b
y th
e Tr
ial B
alan
ce•
Adj
uste
d Tr
ial B
alan
ce a
nd S
tate
men
t of
Fin
anci
al P
ositi
on a
fter
cor
recti
on o
f er
rors
(31)
•
Stat
emen
t to
sho
w a
djus
ted
profi
ts
Not
e(3
1) T
his
incl
udes
onl
y on
e fin
anci
al p
erio
d;
erro
rs r
evea
led
by a
Tri
al B
alan
ce a
re
not
requ
ired
• ex
plai
n ho
w e
rror
s no
t re
veal
ed b
y a
Tria
l Ba
lanc
e ha
ppen
• pr
epar
e th
e jo
urna
l ent
ries
to c
orre
ct
erro
rs
• an
alys
e th
e eff
ects
of e
rror
s on
pro
fit/
loss
for
the
peri
od a
nd o
n ite
ms
in th
e St
atem
ent
of F
inan
cial
Pos
ition
• an
alys
e th
e eff
ects
of c
orre
ction
of e
rror
s on
pro
fit/l
oss
for
the
peri
od a
nd o
n ite
ms
in th
e St
atem
ent
of F
inan
cial
Pos
ition
• pr
epar
e an
adj
uste
d Tr
ial B
alan
ce a
fter
co
rrec
tion
of e
rror
s
• pr
epar
e a
stat
emen
t of
adj
uste
d pr
ofits
aft
er c
orre
ction
of e
rror
s
• pr
epar
e an
adj
uste
d St
atem
ent
of
Fina
ncia
l Pos
ition
, or
an e
xtra
ct o
f one
, aft
er c
orre
ction
of e
rror
s
62
Key
Und
erst
andi
ng 3
: Acc
ounti
ng is
an
info
rmati
on s
yste
m t
o m
easu
re b
usin
ess
acti
viti
es
The
acco
untin
g in
form
ation
sys
tem
mea
sure
s bu
sine
ss a
ctivi
ties
by id
entif
ying
, rec
ordi
ng, a
naly
sing
and
rep
ortin
g ac
coun
ting
info
rmati
on.
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
3.1
Acc
ounti
ng t
heor
ies
1) W
hat
are
the
acco
untin
g th
eori
es?
2) H
ow d
o th
ey a
ffec
t th
e pr
epar
ation
an
d pr
esen
tatio
n of
acc
ounti
ng
info
rmati
on?
Conc
eptu
al
Acc
ounti
ng th
eori
es•
Acc
ounti
ng th
eori
es a
nd th
eir
impl
icati
ons
for
the
prep
arati
on a
nd
pres
enta
tion
of th
e St
atem
ent
of
Fina
ncia
l Pos
ition
and
Sta
tem
ent
of
Fina
ncia
l Per
form
ance
•
The
acco
untin
g th
eori
es a
re:
(i)
acco
untin
g en
tity
(ii)
goin
g co
ncer
n(ii
i) m
onet
ary
(iv)
acco
untin
g pe
riod
(v)
accr
ual b
asis
of a
ccou
nting
(vi)
obje
ctivi
ty(v
ii)
hist
oric
al c
ost
(viii
) co
nsis
tenc
y(ix
) m
ater
ialit
y (x
) pr
uden
ce(x
i) re
venu
e re
cogn
ition
(xii)
m
atch
ing
• Th
e ac
coun
ting
theo
ries
app
licab
le to
the
finan
cial
ele
men
ts a
re m
ainl
y la
id o
ut in
Ke
y U
nder
stan
ding
2
• de
fine
each
acc
ounti
ng th
eory
• id
entif
y th
e ac
coun
ting
theo
ry a
pplie
d in
a
give
n sc
enar
io
• ex
plai
n ho
w e
ach
acco
untin
g th
eory
aff
ects
the
prep
arati
on a
nd p
rese
ntati
on
of fi
nanc
ial s
tate
men
ts
63
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
3.2
Acc
ounti
ng in
form
ation
sys
tem
and
acc
ounti
ng c
ycle
1) W
hat
is th
e ac
coun
ting
cycl
e?
2) W
hat
is th
e ac
coun
ting
info
rmati
on s
yste
m?
3) H
ow a
re b
usin
ess
and
acco
untin
g tr
ansa
ction
s pr
oces
sed?
4) W
hy a
re s
ourc
e do
cum
ents
im
port
ant?
5) W
hat
are
the
sour
ce
docu
men
ts?
6) W
hat
are
jour
nal a
nd
ledg
ers?
7) W
hat
is r
ecor
ded
in th
e jo
urna
l and
le
dger
s?
8) W
hat
is a
Tri
al
Bala
nce?
Cont
extu
al
• Bu
sine
ss tr
ansa
ction
s•
Impa
ct o
f tec
hnol
ogy
on a
ccou
nting
Conc
eptu
al•
Acc
ounti
ng
info
rmati
on s
yste
m•
Rele
vant
acc
ounti
ng
theo
ries
• Th
e ac
coun
ting
cycl
e is
the
proc
essi
ng
of a
ccou
nting
tran
sacti
ons
thro
ugh
the
acco
untin
g in
form
ation
sys
tem
. The
st
ages
of a
ccou
nting
cyc
le a
re
(i)
iden
tifyi
ng a
nd r
ecor
ding
(ii)
adju
sting
(iii)
repo
rting
(iv)
clos
ing
• Th
e cl
osin
g of
acc
ount
s is
onl
y do
ne a
t th
e en
d of
a fi
nanc
ial y
ear
• A
com
pute
rise
d ac
coun
ting
info
rmati
on
syst
em g
ener
ally
com
pris
es th
e fo
llow
ing:
(i)
so
urce
doc
umen
ts(ii
) jo
urna
l(ii
i) le
dger
s (iv
) Tr
ial B
alan
ce
(v)
Stat
emen
t of
Fin
anci
al P
erfo
rman
ce(v
i) St
atem
ent
of F
inan
cial
Pos
ition
Sour
ce d
ocum
ents
• Pu
rpos
es o
f sou
rce
docu
men
ts
• Is
sue
and
rece
ipt
of d
ocum
ents
in
rela
tion
to s
elle
r/pr
ovid
er a
nd b
uyer
/co
nsum
er o
f goo
ds/s
ervi
ces
(32)
• st
ate
the
orde
r in
whi
ch e
ach
type
of
tran
sacti
on is
pro
cess
ed th
roug
h th
e ac
coun
ting
info
rmati
on s
yste
m
• ex
plai
n ho
w e
ach
type
of t
rans
actio
n is
pro
cess
ed th
roug
h th
e ac
coun
ting
info
rmati
on s
yste
m
• st
ate
the
purp
oses
of s
ourc
e do
cum
ents
• st
ate
the
purp
ose
of e
ach
type
of s
ourc
e do
cum
ent
• st
ate
the
sour
ce d
ocum
ents
use
d in
the
tran
sacti
on
• ex
plai
n th
e pu
rpos
e of
the
Tria
l Bal
ance
• ex
plai
n th
e lim
itati
on o
f the
Tri
al B
alan
ce
• pr
epar
e a
Tria
l Bal
ance
64
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
9) W
hy is
the
Tria
l Ba
lanc
e no
t an
ab
solu
te p
roof
of
accu
racy
?
• Ty
pes
of tr
ansa
ction
s an
d th
eir
sour
ce
docu
men
ts:
- ca
sh p
urch
ases
and
sal
es: r
ecei
pts
- cr
edit
pur
chas
es a
nd s
ales
: inv
oice
s -
rece
ipt
of m
oney
: rem
ittan
ce a
dvic
e (c
redi
t cu
stom
er),
rece
ipt,
ban
k st
atem
ent
- pa
ymen
t of
mon
ey: p
aym
ent
vouc
her,
rece
ipt,
ban
k st
atem
ent
- ov
erch
arge
s an
d re
turn
s of
inve
ntor
y:
cred
it n
otes
-
unde
rcha
rges
: deb
it n
otes
Jour
nal
• Re
pres
enta
tion
of tr
ansa
ction
s in
jour
nal
Ledg
er a
ccou
nt•
Repr
esen
tatio
n of
tran
sacti
ons
in le
dger
ac
coun
ts
Tria
l Bal
ance
• Fo
rmat
of a
Tri
al B
alan
ce•
Faci
litat
es th
e pr
epar
ation
of fi
nanc
ial
stat
emen
ts a
nd c
an a
lso
be u
sed
as a
ch
eck
on a
rith
meti
c ac
cura
cy•
Lim
itati
on a
s an
abs
olut
e pr
oof o
f ac
cura
cy
65
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
Not
e(3
2) E
xclu
des
deta
ils a
bout
the
cont
ent
on
sour
ce d
ocum
ents
3.3
Und
erst
andi
ng t
he d
oubl
e-en
try
reco
rdin
g sy
stem
1) H
ow a
re b
usin
ess
activ
ities
rec
orde
d in
the
acco
untin
g in
form
ation
sys
tem
?
Conc
eptu
al
Dou
ble-
entr
y re
cord
ing
syst
em
Proc
edur
alRe
cord
tran
sacti
ons
in
the
jour
nal a
nd le
dger
ac
coun
ts
Met
hod
of r
ecor
ding
• D
oubl
e-en
try
reco
rdin
g m
etho
d an
d ru
les
Jour
nal e
ntri
es•
Prep
arati
on o
f jou
rnal
ent
ries
Ledg
er a
ccou
nts
• Pr
epar
ation
of l
edge
r ac
coun
ts•
Posti
ng o
f jou
rnal
ent
ries
to le
dger
ac
coun
ts (3
3)•
Ana
lysi
ng th
e eff
ects
of t
rans
actio
ns o
n le
dger
bal
ance
s•
Und
erst
andi
ng th
at th
e be
ginn
ing
and
endi
ng le
dger
bal
ance
s re
pres
ent
the
cum
ulati
ve v
alue
s to
dat
e •
Clos
ing
of a
ll in
com
e an
d ex
pens
es
to a
n in
com
e su
mm
ary
acco
unt
(an
inte
rmed
iate
acc
ount
dur
ing
clos
ing
phas
e), w
hich
is th
en c
lose
d to
the
capi
tal
acco
unt
(for
sol
e pr
opri
etor
ship
s) o
r re
tain
ed e
arni
ngs
acco
unt
(for
pri
vate
lim
ited
com
pani
es) (
34)
• st
ate
the
ledg
er a
ccou
nts
to b
e de
bite
d an
d cr
edite
d
• pr
epar
e th
e jo
urna
l ent
ries
• pr
epar
e th
e le
dger
acc
ount
s
• in
terp
ret
the
tran
sacti
ons
reco
rded
and
th
e ba
lanc
es in
the
ledg
er a
ccou
nts
66
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
• Cl
osin
g of
the
draw
ings
acc
ount
to th
e ca
pita
l acc
ount
for
sole
pro
prie
tors
hips
(3
4)•
Clos
ing
of th
e di
vide
nds
acco
unt
amou
nt
to th
e re
tain
ed e
arni
ngs
acco
unt
for
priv
ate
limite
d co
mpa
nies
(34)
Not
es(3
3) E
xclu
des
the
posti
ng o
f acc
ounti
ng
adju
stm
ents
from
the
jour
nal t
o le
dger
s(3
4) C
losi
ng o
f inc
ome
and
expe
nses
ac
coun
ts, d
raw
ings
and
div
iden
ds
acco
unts
will
onl
y be
don
e at
the
end
of
the
finan
cial
yea
r
3.4
Inte
rnal
con
trol
s
1) W
hat
are
inte
rnal
co
ntro
ls?
2) W
hy a
re in
tern
al
cont
rols
impo
rtan
t?
3) W
hat
are
the
inte
rnal
co
ntro
ls o
ver
cash
?
Cont
extu
al•
How
bus
ines
ses
man
-ag
e ca
sh•
Safe
guar
ding
cas
h
Conc
eptu
alIn
tern
al c
ontr
ols
and
inte
rnal
con
trol
s ov
er
cash
• Pu
rpos
e of
inte
rnal
con
trol
s-
safe
guar
d as
sets
of t
he b
usin
ess
- en
sure
bus
ines
s tr
ansa
ction
s ar
e re
-co
rded
acc
urat
ely
- co
mpl
y w
ith
law
s an
d re
gula
tions
• In
tern
al c
ontr
ols
to s
afeg
uard
cas
h by
ha
ving
con
trol
s ov
er:
- ca
sh in
han
d-
cash
at
bank
- ca
sh in
tran
sit
- ca
sh r
ecei
pts
- ca
sh p
aym
ents
• ex
plai
n th
e pu
rpos
e of
inte
rnal
con
trol
s
• ex
plai
n th
e w
ays
of in
tern
al c
ontr
ols
over
ca
sh in
han
d, c
ash
at b
ank,
cas
h in
tran
sit,
ca
sh r
ecei
pts
and
cash
pay
men
ts
• ex
plai
n th
e pu
rpos
e of
pre
pari
ng b
ank
reco
ncili
ation
• id
entif
y th
e di
ffer
ence
s be
twee
n th
e bu
sine
ss c
ash
at b
ank
bala
nce
and
the
bala
nce
in th
e ba
nk s
tate
men
t
67
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
Proc
edur
alPr
epar
ation
of
bank
rec
onci
liatio
n st
atem
ent
•In
tern
al c
ontr
ols
over
cas
h-
segr
egati
on o
f duti
es-
cust
ody
of c
ash
-au
thor
isati
on-
bank
rec
onci
liatio
n•
Purp
ose
of p
repa
ring
ban
k re
conc
iliati
on:
chec
k th
e ca
sh a
t ba
nk b
alan
ce o
f the
busi
ness
aga
inst
the
bank
’s r
ecor
d as
show
n on
the
bank
sta
tem
ent
•Re
conc
iliati
on o
f diff
eren
ces
betw
een
the
busi
ness
cas
h at
ban
k ba
lanc
e an
d th
eba
lanc
e in
the
bank
sta
tem
ent
(35)
•D
iffer
ence
s ar
e du
e to
the
timin
g of
the
tran
sacti
ons
reco
rded
by
the
busi
ness
and
the
bank
, and
err
ors
in r
ecor
ding
•Ty
pes
of d
iffer
ence
s (3
6):
(i)di
rect
dep
osit
s(ii
)di
rect
pay
men
ts(ii
i)c h
eque
s no
t ye
t pr
esen
ted
(iv)
depo
sits
in tr
ansi
t(v
)di
shon
oure
d ch
eque
s(v
i)er
rors
mad
e by
the
busi
ness
or
the
bank
•A
djus
ting
the
cash
at
bank
ledg
er a
ccou
nt•
Form
at o
f a b
ank
reco
ncili
ation
sta
tem
ent
•ex
plai
n th
e ca
uses
of d
iffer
ence
s be
twee
nth
e bu
sine
ss c
ash
at b
ank
bala
nce
and
the
bala
nce
in th
e ba
nk s
tate
men
t
•pr
epar
e an
adj
uste
d ca
sh a
t ba
nk le
dger
acco
unt
•pr
epar
e th
e ba
nk r
econ
cilia
tion
stat
emen
t
•an
alys
e th
e eff
ects
of a
djus
ting
for
the
diff
eren
ces
betw
een
the
cash
at
bank
bala
nce
and
the
bala
nce
in th
e ba
nkst
atem
ent
on c
ash
at b
ank
and
profi
t fo
rth
e pe
riod
68
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Exp
ress
)Le
arni
ng O
utco
mes
Stud
ents
will
be
able
to:
Not
es(3
5) In
clud
es o
nly
the
follo
win
g sc
enar
ios:
(i)
sa
me
open
ing
bala
nce
betw
een
cash
at
bank
and
ban
k st
atem
ent
(ii)
diff
eren
t op
enin
g ba
lanc
e be
twee
n ca
sh a
t ba
nk a
nd b
ank
stat
emen
t,
and
the
diff
eren
ce is
lim
ited
to o
nly
one
tran
sacti
on(ii
i) op
enin
g ba
lanc
e in
cas
h at
ban
k an
d ba
nk s
tate
men
t ca
n be
eith
er
a po
sitiv
e ba
lanc
e or
a b
ank
over
draft
(iv
) en
ding
bal
ance
in c
ash
at b
ank
and
bank
sta
tem
ent
can
eith
er
be a
pos
itive
bal
ance
or
a ba
nk
over
draft
(v)
bank
rec
onci
liatio
n m
ust
be p
er-
form
ed b
y co
mpa
ring
cas
h at
ban
k le
dger
acc
ount
and
a b
ank
stat
e-m
ent
(36)
Und
erst
andi
ng h
ow e
lect
roni
c ba
nk
tran
sacti
ons
(e.g
., cr
edit
tran
sfer
, st
andi
ng o
rder
) are
rec
orde
d in
the
acco
unts
of t
he b
usin
ess
is r
equi
red
but
desc
ripti
ons
of th
eir
proc
essi
ng a
re n
ot
requ
ired
69
Key
Und
erst
andi
ng 1
: Acc
ounti
ng a
nd n
on-a
ccou
nting
info
rmati
on a
re u
sed
to s
uppo
rt a
nd fa
cilit
ate
deci
sion
-mak
ing
Stak
ehol
ders
req
uire
acc
ounti
ng a
nd n
on-a
ccou
nting
info
rmati
on o
n bu
sine
ss a
ctivi
ties
for
deci
sion
-mak
ing,
whi
ch in
turn
aff
ects
the
busi
ness
and
its
activ
ities
.
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:
1.1
Role
s of
acc
ounti
ng a
nd a
ccou
ntan
ts
1) W
hat
is a
ccou
nting
?
2) W
hat
are
the
role
s of
acc
ounti
ng a
nd
acco
unta
nts?
3) H
ow d
o ac
coun
tant
s fu
lfil t
heir
rol
es?
Cont
extu
al•
Bus
ines
s en
viro
nmen
t
Role
of a
ccou
nting
• A
ccou
nting
pro
vide
s ac
coun
ting
info
rmati
on fo
r de
cisi
on-m
akin
g by
bu
sine
ss o
wne
rs a
nd o
ther
sta
keho
lder
s
Role
of a
ccou
ntan
ts•
Thro
ugh
prov
idin
g ac
coun
ting
info
rmati
on fo
r st
akeh
olde
rs’ d
ecis
ion-
mak
ing,
acc
ount
ants
act
as
stew
ards
of
busi
ness
es•
They
set
up
the
acco
untin
g in
form
ation
sy
stem
to c
olla
te, r
ecor
d, o
rgan
ise
and
repo
rt a
ccou
nting
info
rmati
on s
o th
at
owne
rs a
nd o
ther
sta
keho
lder
s ca
n m
ake
deci
sion
s re
gard
ing
the
man
agem
ent
of r
esou
rces
and
the
perf
orm
ance
of
busi
ness
es.
• Th
ey th
ink
criti
cally
, sol
ve p
robl
ems,
ad
apt
and
mee
t th
e ne
ed fo
r so
phis
ticat
ed a
ccou
nting
and
bus
ines
s in
form
ation
• st
ate
the
role
of a
ccou
nting
• st
ate
the
role
of a
ccou
ntan
ts
• de
fine
inte
grit
y an
d ob
jecti
vity
• ex
plai
n th
e im
port
ance
of h
avin
g in
tegr
ity
and
obje
ctivi
ty in
pre
pari
ng a
nd
pres
entin
g ac
coun
ting
info
rmati
on
Tabl
e 6:
Con
tent
Am
plifi
catio
n an
d Le
arni
ng O
utco
mes
for
Nor
mal
(Aca
dem
ic) c
ours
e
70
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:•
In th
e fa
ce o
f an
evol
ving
bus
ines
sen
viro
nmen
t an
d ra
pid
tech
nolo
gica
lad
vanc
emen
t, a
ccou
ntan
ts h
ave
topr
ovid
e re
leva
nt in
form
ation
in a
timel
y m
anne
r fo
r de
cisi
on-m
akin
g an
din
sigh
ts th
at a
re e
asily
and
app
ropr
iate
lyun
ders
tood
by
owne
rs a
nd o
ther
stak
ehol
ders
bas
ed o
n ac
coun
ting
theo
ries
•St
akeh
olde
rs p
lace
trus
t in
the
info
rmati
on p
rovi
ded
by a
ccou
ntan
tsw
ho m
ust
adhe
re to
pro
fess
iona
l eth
ics,
upho
ld in
tegr
ity
and
be o
bjec
tive
(1)(
2)-
inte
grit
y is
bei
ng s
trai
ghtf
orw
ard
and
hone
st in
all
prof
essi
onal
and
bus
ines
sre
latio
nshi
ps-
obje
ctivi
ty is
not
letti
ng b
ias,
con
flict
of
inte
rest
or
undu
e in
fluen
ce o
f oth
ers
over
ride
pro
fess
iona
l jud
gem
ent
Not
es(1
)In
clud
es o
nly
the
effec
ts o
f une
thic
albe
havi
our
on d
ecis
ions
mad
e by
stak
ehol
ders
; the
lega
l con
sequ
ence
s of
unet
hica
l beh
avio
ur a
re n
ot r
equi
red
(2)
In th
e In
stitu
te o
f Sin
gapo
re C
hart
ered
Acc
ount
ants
’ Cod
e of
Pro
fess
iona
lCo
nduc
t an
d Et
hics
, the
firs
t tw
opr
inci
ples
are
inte
grit
y an
d ob
jecti
vity
71
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:
1.2
Stak
ehol
ders
and
the
ir d
ecis
ion-
mak
ing
need
s
1) W
ho is
inte
rest
ed
in a
ccou
nting
in
form
ation
?
2) W
hat
kind
s of
in
form
ation
do
stak
ehol
ders
nee
d fo
r de
cisi
on-m
akin
g?
3) W
hy d
o st
akeh
olde
rs
need
bot
h ac
coun
ting
and
non-
acco
untin
g in
form
ation
?
Cont
extu
al•
Busi
ness
env
iron
men
t
Conc
eptu
al•
Rele
vanc
e of
in
form
ation
• A
ccou
nting
and
no
n-ac
coun
ting
info
rmati
on
Stak
ehol
ders
• U
sers
of a
ccou
nting
and
non
-acc
ounti
ng
info
rmati
on o
f a b
usin
ess
for
deci
sion
-m
akin
g
Acc
ounti
ng a
nd n
on-a
ccou
nting
info
rmati
on•
Mak
ing
deci
sion
s w
ith
only
acc
ounti
ng
info
rmati
on m
ay c
ause
sta
keho
lder
s to
le
ave
out
impo
rtan
t bu
sine
ss-r
elat
ed
fact
ors
that
are
not
sho
wn
on fi
nanc
ial
stat
emen
ts b
ut m
ay a
ffec
t de
cisi
ons
- ac
coun
ting
info
rmati
on r
efer
s to
in
form
ation
usu
ally
gen
erat
ed b
y th
e ac
coun
ting
info
rmati
on s
yste
m a
nd is
la
rgel
y ex
trac
ted
from
jour
nals
, led
ger
acco
unts
and
fina
ncia
l sta
tem
ents
- no
n-ac
coun
ting
info
rmati
on (3
) re
fers
to th
e in
form
ation
abo
ut th
e op
erati
on o
f a b
usin
ess
not
foun
d in
jo
urna
ls, l
edge
r ac
coun
ts o
r fin
anci
al
stat
emen
ts.
Not
e(3
) Re
fer
to s
ectio
ns 2
.7.2
, 2.7
.3, a
nd
2.8.
1 fo
r th
e sp
ecifi
c no
n-ac
coun
ting
info
rmati
on fo
r th
is s
ylla
bus
• st
ate
the
stak
ehol
ders
who
are
inte
rest
ed
in th
e aff
airs
of t
he b
usin
ess
and
mak
e us
e of
the
acco
untin
g in
form
ation
for
deci
sion
-mak
ing
• st
ate
exam
ples
of a
ccou
nting
info
rmati
on
need
ed b
y st
akeh
olde
rs o
f a b
usin
ess
for
deci
sion
-mak
ing
• st
ate
exam
ples
of n
on-a
ccou
nting
in
form
ation
nee
ded
by o
wne
rs a
nd
man
ager
s of
a b
usin
ess
for
deci
sion
- m
akin
g
• ex
plai
n w
hy s
take
hold
ers
of a
bus
ines
s ar
e in
tere
sted
in a
ccou
nting
info
rmati
on
• e
xpla
in w
hy o
wne
rs a
nd m
anag
ers
of a
bu
sine
ss a
re in
tere
sted
in n
on-a
ccou
nting
in
form
ation
72
Key
Und
erst
andi
ng 2
: Acc
ounti
ng is
a la
ngua
ge u
sed
to r
epre
sent
bus
ines
s ac
tivi
ties
Acc
ounti
ng is
the
lang
uage
of b
usin
ess
as it
pro
vide
s th
e co
ncep
ts a
nd fr
amew
ork
to r
epre
sent
bus
ines
s ac
tiviti
es.
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:
2.1
Type
s of
Bus
ines
ses
1) W
hat
are
the
diff
eren
t ty
pes
of p
rofit
-mak
ing
busi
ness
es a
nd h
ow
do th
eir
finan
cial
st
atem
ents
diff
er?
Cont
extu
alTy
pes
of b
usin
esse
s
Conc
eptu
al•
Trad
ing
busi
ness
es
• Se
rvic
e bu
sine
sses
• M
ain
busi
ness
acti
vitie
s of
pro
fit-m
akin
g bu
sine
sses
: tra
ding
and
ser
vice
•
Diff
eren
ce b
etw
een
the
busi
ness
ac
tiviti
es o
f tra
ding
and
ser
vice
bu
sine
sses
as
seen
in th
e St
atem
ent
of F
inan
cial
Pos
ition
and
Sta
tem
ent
of
Fina
ncia
l Per
form
ance
• ex
plai
n th
e di
ffer
ence
s be
twee
n tr
adin
g an
d se
rvic
e bu
sine
sses
• di
sting
uish
bet
wee
n fin
anci
al s
tate
men
ts
of b
usin
esse
s in
trad
ing
and
serv
ices
2.3
Elem
ents
of fi
nanc
ial s
tate
men
ts
1) H
ow a
re b
usin
ess
activ
ities
mea
sure
d an
d pr
esen
ted
in
finan
cial
sta
tem
ents
?
Cont
extu
alBu
sine
ss a
ctivi
ties
Conc
eptu
al•
Ass
et•
Liab
ility
• Eq
uity
• In
com
e •
Expe
nse
• A
ll bu
sine
ss a
ctivi
ties
are
repr
esen
ted
by
thes
e el
emen
ts: a
sset
, lia
bilit
y, e
quit
y,
inco
me
and
expe
nse
• Ex
ampl
es o
f ass
ets,
liab
ilitie
s, e
quit
y,
inco
me
and
expe
nses
• U
nder
stan
d ho
w th
e tr
ade
of th
e bu
sine
ss a
nd th
e us
e of
the
item
s aff
ect
how
they
are
cla
ssifi
ed
• de
fine
asse
t, li
abili
ty, e
quit
y, in
com
e an
d ex
pens
es
• gi
ve e
xam
ples
of a
sset
s, li
abili
ties,
equ
ity,
in
com
e an
d ex
pens
es fo
r a
spec
ific
busi
ness
• cl
assi
fy it
ems
as a
sset
s, li
abili
ties,
equ
ity,
in
com
e an
d ex
pens
es fo
r a
spec
ific
busi
ness
73
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:
2.4
Acc
ounti
ng e
quati
on
1) W
hat
is th
e re
latio
nshi
p be
twee
n as
set,
liab
ility
and
eq
uity
?
Conc
eptu
alA
ccou
nting
equ
ation
Proc
edur
alA
naly
se th
e eff
ects
of
tran
sacti
ons
on th
e ac
coun
ting
equa
tion
• Ba
sic
acco
untin
g eq
uatio
n of
ass
ets
= eq
uity
+ li
abili
ties,
and
its
expa
nsio
n to
in
clud
e in
com
e an
d ex
pens
es•
The
basi
c ac
coun
ting
equa
tion
is th
e ba
sis
of th
e St
atem
ent
of F
inan
cial
Pos
ition
• st
ate
the
basi
c ac
coun
ting
equa
tion
and
its
expa
nsio
n
• ca
lcul
ate
the
valu
es o
f ass
ets,
liab
ilitie
s an
d eq
uity
usi
ng th
e ac
coun
ting
equa
tion
• ap
ply
the
acco
untin
g eq
uatio
ns to
the
Stat
emen
t of
Fin
anci
al P
ositi
on
• an
alys
e th
e eff
ects
of b
usin
ess
tran
sacti
ons
on th
e ac
coun
ting
equa
tion
2.5
Fina
ncia
l sta
tem
ents
This
sec
tion
look
s at
the
Stat
emen
t of
Fin
anci
al P
ositi
on a
nd S
tate
men
t of
Fin
anci
al P
erfo
rman
ce o
f sol
e pr
opri
etor
ship
s, a
nd th
e en
d-of
-pe-
riod
acc
ounti
ng a
djus
tmen
ts in
clud
ed in
this
syl
labu
s.
2.5.
1 St
atem
ent
of F
inan
cial
Pos
ition
1) W
hat
are
finan
cial
st
atem
ents
and
thei
r pu
rpos
es?
2) W
hat
is a
Sta
tem
ent
of F
inan
cial
Pos
ition
?
3) H
ow is
info
rmati
on
show
n in
the
Stat
emen
t of
Fi
nanc
ial P
ositi
on?
Cont
extu
alCo
mm
unic
ation
of t
he
list
of a
sset
s, li
abili
ties,
an
d eq
uity
of a
bus
ines
s
Conc
eptu
al•
Am
ount
s re
port
ed
are
at a
poi
nt in
tim
e•
Acc
ounti
ng e
quati
on•
Curr
ent
asse
ts•
Non
-cur
rent
ass
ets
Purp
ose
of th
e St
atem
ent
of F
inan
cial
Po
sitio
n•
Stat
emen
t of
Fin
anci
al P
ositi
on li
sts
the
asse
ts, l
iabi
lities
and
equ
ity
of a
bus
ines
s at
a p
oint
in ti
me
(4)(
5)
• Re
pres
ents
the
acco
untin
g eq
uatio
n
Item
s in
the
Stat
emen
t of
Fin
anci
al P
ositi
on•
Clas
sific
ation
of i
tem
s as
non
-cur
rent
as
sets
, cur
rent
ass
ets,
non
-cur
rent
lia
biliti
es, c
urre
nt li
abili
ties
and
equi
ty
• de
fine
and
disti
ngui
sh b
etw
een
non-
curr
ent
and
curr
ent
asse
ts
• de
fine
and
disti
ngui
sh b
etw
een
non-
curr
ent
and
curr
ent
liabi
lities
• de
fine
net
asse
ts a
nd e
quit
y
• ca
lcul
ate
net
asse
ts a
nd e
quit
y
• an
alys
e th
e eff
ects
of b
usin
ess
tran
sacti
ons
and
acco
untin
g ad
just
men
ts
on th
e ow
ner’
s eq
uity
, non
-cur
rent
74
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:•
Curr
ent
liabi
lities
• N
on-c
urre
nt li
abili
ties
• Eq
uity
• Va
luati
on o
f ass
ets
• Re
leva
nt a
ccou
nting
th
eori
es
Proc
edur
al•
Prep
are
the
Stat
emen
t of
Fi
nanc
ial P
ositi
on•
Ana
lyse
the
effec
ts o
f bu
sine
ss tr
ansa
ction
s an
d ac
coun
ting
adju
stm
ents
on
the
Stat
emen
t of
Fi
nanc
ial P
ositi
on
• Ex
ampl
es o
f non
-cur
rent
ass
ets,
cur
rent
as
sets
, non
-cur
rent
liab
ilitie
s, c
urre
nt
liabi
lities
and
equ
ity
• O
wne
r’s
equi
ty fo
r a
sole
pro
prie
tor
(6)
Valu
ation
met
hods
• A
ccou
nting
theo
ries
that
app
ly to
eac
h va
luati
on m
etho
d•
Valu
ation
met
hods
use
d fo
r as
sets
:-
non-
curr
ent
asse
ts a
t ne
t bo
ok v
alue
, i.e
., co
st le
ss a
ccum
ulat
ed d
epre
ciati
on-
inve
ntor
y va
lues
at
the
low
er o
f cos
t an
d ne
t re
alis
able
val
ue-
trad
e re
ceiv
able
s at
trad
e re
ceiv
able
s le
ss a
llow
ance
for
impa
irm
ent
of tr
ade
rece
ivab
les
Pres
enta
tion
of th
e St
atem
ent
of F
inan
cial
Po
sitio
n•
Nar
rativ
e fo
rmat
of S
tate
men
t of
Fi
nanc
ial P
ositi
on•
Pres
enta
tion
deta
ils to
sho
w:
- no
n-cu
rren
t an
d cu
rren
t as
sets
(cur
rent
as
sets
are
not
req
uire
d to
be
liste
d in
or
der
of li
quid
ity)
- no
n-cu
rren
t an
d cu
rren
t lia
biliti
es-
capi
tal o
f the
sol
e pr
opri
etor
asse
ts, c
urre
nt a
sset
s, n
on-c
urre
nt
liabi
lities
, cur
rent
liab
ilitie
s an
d ne
t as
sets
• pr
epar
e a
Stat
emen
t of
Fin
anci
al P
ositi
on
wit
h en
d-of
-fina
ncia
l-per
iod
acco
untin
g ad
just
men
ts fo
r a
sole
pro
prie
tors
hip
• pr
epar
e a
Stat
emen
t of
Fin
anci
al P
ositi
on
wit
h en
d-of
-fina
ncia
l-per
iod
acco
untin
g ad
just
men
ts fo
r a
trad
ing
or s
ervi
ce
busi
ness
75
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:•
Acc
ounti
ng a
djus
tmen
ts c
an b
e do
ne a
t th
e en
d of
a p
erio
d or
fina
ncia
l yea
r, an
d th
ey in
clud
e on
ly:
- de
prec
iatio
n of
non
-cur
rent
ass
ets,
w
ith
or w
itho
ut b
egin
ning
acc
umul
ated
de
prec
iatio
n-
impa
irm
ent
loss
on
inve
ntor
y-
impa
irm
ent
loss
on
trad
e re
ceiv
able
s ar
isin
g du
ring
the
finan
cial
per
iod,
wit
h or
wit
hout
beg
inni
ng a
llow
ance
for
impa
irm
ent
of tr
ade
rece
ivab
les
- pr
epai
d ex
pens
es, e
xpen
ses
paya
ble,
se
rvic
e fe
e re
ceiv
ed in
adv
ance
, in
com
e re
ceiv
able
and
inco
me
rece
ived
in
adv
ance
-
re-c
lass
ifica
tion
of c
urre
nt p
ortio
n of
no
n-cu
rren
t lia
bilit
y
• Ba
sic
inte
rpre
tatio
n an
d si
gnifi
canc
e of
re
latio
nshi
ps o
f fina
ncia
l figu
res
in th
e St
atem
ent
of F
inan
cial
Pos
ition
(7)
Not
es(4
) The
Sta
tem
ent
of F
inan
cial
Pos
ition
is
to b
e pr
epar
ed fr
om a
list
of a
ccou
nt
bala
nces
or
a tr
ial b
alan
ce
76
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:(5
) The
Sta
tem
ent
of F
inan
cial
Pos
ition
in
clud
es o
nly
that
for
(i)
trad
ing
and
serv
ice
busi
ness
es(ii
) so
le p
ropr
ieto
rshi
ps(6
) The
term
s ne
t w
orth
and
cap
ital
ow
ned
are
not
used
(7) I
nclu
des
only
the
follo
win
g:(i)
ho
w r
esou
rces
are
obt
aine
d an
d us
ed(ii
) eq
uity
and
net
ass
ets
(tot
al a
sset
s -
tota
l lia
biliti
es)
(iii)
chan
ges
in n
et a
sset
s be
twee
n tw
o po
ints
in ti
me
and
the
profi
t fo
r th
e pe
riod
2.5.
2 St
atem
ent
of F
inan
cial
Per
form
ance
1) W
hat
is a
Sta
tem
ent
of F
inan
cial
Pe
rfor
man
ce?
2) H
ow is
info
rmati
on
show
n in
the
Stat
emen
t of
Fin
anci
al
Perf
orm
ance
?
Cont
extu
alCo
mm
unic
ation
of a
bu
sine
ss p
erfo
rman
ce
Conc
eptu
al•
Am
ount
s re
port
ed
are
for
a pe
riod
of
time
• Ex
pand
ed a
ccou
nting
eq
uatio
n•
Inco
me
• Ex
pens
es
• Pr
ofits
Purp
ose
of th
e St
atem
ent
of F
inan
cial
Pe
rfor
man
ce•
The
Stat
emen
t of
Fin
anci
al P
erfo
rman
ce
show
s th
e in
com
e an
d ex
pens
es o
f a
busi
ness
for
a pe
riod
of ti
me
(8)
• Sh
ows
the
profi
t fo
r th
e pe
riod
, i.e
., th
e ex
cess
of i
ncom
e ov
er e
xpen
ses
for
a pe
riod
of ti
me
Item
s in
the
a St
atem
ent
of F
inan
cial
Pe
rfor
man
ce•
For
a tr
adin
g bu
sine
ss, t
he p
erpe
tual
in
vent
ory
reco
rdin
g m
etho
d is
ado
pted
• de
fine
and
disti
ngui
sh g
ross
pro
fit/l
oss
and
profi
t/lo
ss fo
r th
e fin
anci
al p
erio
d
• ex
plai
n th
e pu
rpos
es o
f the
trad
ing
porti
on a
nd p
rofit
and
loss
por
tion
of th
e St
atem
ent
of F
inan
cial
Per
form
ance
• ca
lcul
ate
net
sale
s re
venu
e, s
ervi
ce fe
e re
venu
e, g
ross
pro
fit/l
oss
and
profi
t/lo
ss
for
the
peri
od
• pr
epar
e a
Stat
emen
t of
Fin
anci
al
Perf
orm
ance
wit
h en
d-of
-fina
ncia
l-pe
riod
acc
ounti
ng a
djus
tmen
ts fo
r a
sole
pr
opri
etor
ship
77
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:•
Rele
vant
acc
ounti
ng
theo
ries
Proc
edur
al•
Prep
are
the
Stat
emen
t of
Fin
anci
al
Perf
orm
ance
• Th
e fo
llow
ing
deta
ils a
re s
how
n in
the
trad
ing
porti
on o
f the
Sta
tem
ent
of
Fina
ncia
l Per
form
ance
: -
net
sale
s re
venu
e (s
ales
rev
enue
- sa
les
retu
rns)
- co
st o
f sal
es-
gros
s pr
ofit/
loss
• Fo
r a
serv
ice
busi
ness
, ser
vice
fee
reve
nue
is s
how
n as
a li
ne it
em s
epar
ate
from
oth
er in
com
e
Pres
enta
tion
of th
e St
atem
ent
of F
inan
cial
Pe
rfor
man
ce•
Nar
rativ
e fo
rmat
of S
tate
men
t of
Fi
nanc
ial P
erfo
rman
ce•
Pres
enta
tion
of s
ales
rev
enue
, sal
es
retu
rns
and
cost
of s
ales
on
the
Stat
emen
t of
Fin
anci
al P
erfo
rman
ce fo
r a
trad
ing
busi
ness
• Pr
esen
tatio
n of
ser
vice
fee
reve
nue
on
the
Stat
emen
t of
Fin
anci
al P
erfo
rman
ce
for
a se
rvic
e bu
sine
ss•
Oth
er e
xpen
ses
in th
e pr
ofit
and
loss
po
rtion
of t
he S
tate
men
t of
Fin
anci
al
Perf
orm
ance
are
not
req
uire
d to
be
clas
sifie
d by
func
tion
• pr
epar
e a
Stat
emen
t of
Fin
anci
al
Perf
orm
ance
wit
h en
d-of
-fina
ncia
l-per
iod
acco
untin
g ad
just
men
ts fo
r tr
adin
g or
se
rvic
e bu
sine
ss
78
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:•
Acc
ounti
ng a
djus
tmen
ts c
an b
e do
ne a
t th
e en
d of
a p
erio
d or
fina
ncia
l yea
r, an
d th
ey in
clud
e on
ly:
- de
prec
iatio
n of
non
-cur
rent
ass
ets,
w
ith
or w
itho
ut b
egin
ning
acc
umul
ated
de
prec
iatio
n-
impa
irm
ent
loss
on
inve
ntor
y-
impa
irm
ent
loss
on
trad
e re
ceiv
able
s ar
isin
g du
ring
the
finan
cial
per
iod,
wit
h or
wit
hout
beg
inni
ng a
llow
ance
for
impa
irm
ent
of tr
ade
rece
ivab
les
- se
rvic
e fe
e re
venu
e re
ceiv
ed in
ad
vanc
e, p
repa
id e
xpen
ses,
exp
ense
s pa
yabl
e, o
ther
inco
me
rece
ivab
les
and
inco
me
rece
ived
in a
dvan
ce
• Ba
sic
inte
rpre
tatio
n an
d si
gnifi
canc
e of
re
latio
nshi
ps o
f fina
ncia
l figu
res
in th
e St
atem
ent
of F
inan
cial
Per
form
ance
(9)
Not
es(8
) Th
e St
atem
ent
of F
inan
cial
Per
form
ance
is
to b
e pr
epar
ed fr
om a
list
sof
acc
ount
ba
lanc
es o
r a
tria
l bal
ance
and
incl
udes
on
ly th
at fo
r(i)
tr
adin
g an
d se
rvic
e bu
sine
sses
(ii)
sole
pro
prie
tors
hips
79
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:(9
)Inc
lude
s on
ly th
e fo
llow
ing
rela
tions
hips
betw
een:
(i)sa
les
reve
nue,
cos
t of
sal
es a
nd g
ross
profi
t/lo
ss(ii
)gro
ss p
rofit
/los
s, o
ther
inco
me,
oth
erex
pens
es a
nd p
rofit
/los
s fo
r th
epe
riod
(iii)
sale
s re
venu
e, c
ost
of s
ales
, oth
erin
com
e, o
ther
exp
ense
s an
d pr
ofit/
loss
for
the
peri
od
2.6
Inco
me
and
expe
nses
This
sec
tion
look
s in
to th
e re
venu
e, o
ther
inco
me,
cos
t of
sal
es a
nd o
ther
exp
ense
item
s in
a S
tate
men
t of
Fin
anci
al P
erfo
rman
ce, a
nd th
e ad
just
men
ts to
be
mad
e to
thes
e ite
ms
at th
e en
d of
a fi
nanc
ial p
erio
d.
2.6.
1 Re
venu
e an
d ot
her
inco
me
1) W
hat
are
the
tran
sacti
ons
for
reve
nue
and
othe
rin
com
e?
2) H
ow a
re r
even
uean
d ot
her
inco
me
pres
ente
d in
fina
ncia
lst
atem
ents
?
3) H
ow a
re a
djus
tmen
tsfo
r re
venu
e an
dot
her
inco
me
mad
e?
Cont
extu
al•
Trad
ing
and
serv
ice
busi
ness
•H
ow th
e da
tes
for
rece
ipt
of in
com
e ca
ndi
ffer
wit
h th
e pe
riod
they
are
rep
orte
d as
inco
me
Conc
eptu
al•
Am
ount
s re
port
edar
e fo
r a
peri
od o
ftim
e•
Sale
s re
venu
e•
Serv
ice
fee
reve
nue
•Se
rvic
e fe
e re
venu
e
Acc
ounti
ng th
eori
es•
Reve
nue
reco
gniti
on th
eory
•A
ccru
al b
asis
of a
ccou
nting
theo
ry
Acc
ounti
ng fo
r tr
ansa
ction
s•
Acc
ounti
ng fo
r:(i)
sale
of g
oods
on
cash
and
cre
dit
basi
s(ii
)pr
ovis
ion
of s
ervi
ces
on c
ash
and
cred
it b
asis
(iii)
retu
rns
of g
oods
(iv)
serv
ice
fee
reve
nue
rece
ived
inad
vanc
e(v
)ot
her
inco
me
(10)
(vi)
inco
me
rece
ivab
le (1
0)(v
ii)in
com
e re
ceiv
ed in
adv
ance
(10)
Acc
ounti
ng th
eori
es•
expl
ain
the
acco
untin
g of
sal
es r
even
ue,
serv
ice
fee
reve
nue,
oth
er in
com
e,se
rvic
e fe
e re
ceiv
ed in
adv
ance
,in
com
e re
ceiv
able
and
inco
me
rece
ived
in a
dvan
ce in
rel
ation
to r
elev
ant
acco
untin
g th
eori
es
Acc
ounti
ng fo
r tr
ansa
ction
s•
calc
ulat
e th
e sa
les
reve
nue
adju
sted
for
sale
s re
turn
•ca
lcul
ate
the
serv
ice
fee
reve
nue
adju
sted
for
serv
ice
fee
reve
nue
rece
ived
in a
dvan
ce
80
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:re
ceiv
ed in
adv
ance
• O
ther
inco
me
• In
com
e re
ceiv
able
• In
com
e re
ceiv
ed in
ad
vanc
e•
Reve
nue
reco
gniti
on
theo
ry
• A
ccru
al b
asis
of
acco
untin
g
Proc
edur
al•
Rec
ord
sale
s re
venu
e,
serv
ice
fee
reve
nue
and
inco
me
in th
e jo
urna
l, le
dger
ac
coun
ts a
nd
finan
cial
sta
tem
ents
• R
ecor
d se
rvic
e fe
e re
venu
e re
ceiv
ed
in a
dvan
ce, i
ncom
e re
ceiv
able
and
in
com
e re
ceiv
ed
in a
dvan
ce in
the
jour
nal a
nd fi
nanc
ial
stat
emen
ts
• Ca
lcul
ation
of s
ervi
ce fe
e re
venu
e re
ceiv
ed in
adv
ance
, inc
ome
rece
ivab
les
and
inco
me
rece
ived
in a
dvan
ce•
Am
ount
s re
ceiv
ed a
re r
ecor
ded
as
inco
me
at th
e po
ints
of r
ecei
pt, a
nd
any
unea
rned
or
not
rece
ived
por
tions
ar
e ad
just
ed a
t th
e en
d of
the
finan
cial
pe
riod
• A
djus
tmen
ts a
t en
d of
per
iod
are
to
be m
ade
agai
nst
sepa
rate
ser
vice
fee
reve
nue
rece
ived
in a
dvan
ce, i
ncom
e re
ceiv
able
and
inco
me
rece
ived
in
adva
nce
ledg
er a
ccou
nts
• Cl
osin
g of
sal
es r
even
ue, s
ales
ret
urns
, se
rvic
e fe
e re
venu
e an
d ot
her
inco
me
are
perf
orm
ed o
nly
at th
e en
d of
the
finan
cial
ye
ar, a
nd th
e am
ount
s ar
e tr
ansf
erre
d to
the
inco
me
sum
mar
y (f
or p
erio
ds in
be
twee
n th
e fin
anci
al y
ear,
ther
e w
ill b
e ba
lanc
es in
thes
e ac
coun
ts)
Pres
enta
tion
• Pr
esen
tatio
n of
sal
es r
even
ue, s
ales
re
turn
s, s
ervi
ce fe
e re
venu
e an
d ot
her
inco
me
in th
e St
atem
ent
of F
inan
cial
Pe
rfor
man
ce•
Pres
enta
tion
of in
com
e re
ceiv
able
in th
e St
atem
ent
of F
inan
cial
Pos
ition
• ca
lcul
ate
othe
r in
com
e ad
just
ed fo
r in
com
e re
ceiv
able
and
inco
me
rece
ived
in
adv
ance
• pr
epar
e th
e jo
urna
l ent
ries
aff
ectin
g sa
les
reve
nue,
sal
es r
etur
ns, s
ervi
ce
fee
reve
nue,
oth
er in
com
e, s
ervi
ce fe
e re
venu
e re
ceiv
ed in
adv
ance
, inc
ome
rece
ivab
le a
nd in
com
e re
ceiv
ed in
ad
vanc
e
• pr
epar
e th
e sa
les
reve
nue,
sal
es r
etur
ns,
serv
ice
fee
reve
nue
and
othe
r in
com
e le
dger
acc
ount
s w
itho
ut a
djus
tmen
ts fo
r se
rvic
e fe
e re
venu
e re
ceiv
ed in
adv
ance
, in
com
e re
ceiv
able
and
inco
me
rece
ived
in
adv
ance
• in
terp
ret
the
sale
s re
venu
e, s
ales
ret
urns
, se
rvic
e fe
e re
venu
e, o
ther
inco
me
ledg
er
acco
unts
wit
h ad
just
men
ts fo
r se
rvic
e fe
e re
venu
e re
ceiv
ed in
adv
ance
, inc
ome
rece
ivab
le a
nd in
com
e re
ceiv
ed in
ad
vanc
e
• an
alys
e th
e eff
ects
of s
ervi
ce fe
e re
venu
e re
ceiv
ed in
adv
ance
, inc
ome
rece
ivab
les
and
inco
me
rece
ived
in a
dvan
ce o
n cu
rren
t lia
biliti
es, c
urre
nt a
sset
s an
d pr
ofit/
loss
for
the
peri
od
81
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:•
Pres
enta
tion
of s
ervi
ce fe
e re
venu
e re
ceiv
ed in
adv
ance
and
inco
me
rece
ived
in
adv
ance
in th
e St
atem
ent
of F
inan
cial
Po
sitio
n•
Inco
me
rece
ivab
le is
sho
wn
as c
urre
nt
asse
ts in
the
Stat
emen
t of
Fin
anci
al
Posi
tion
• S
ervi
ce fe
e re
venu
e re
ceiv
ed in
adv
ance
an
d in
com
e re
ceiv
ed in
adv
ance
are
sh
own
as c
urre
nt li
abili
ties
in th
e St
atem
ent
of F
inan
cial
Pos
ition
Not
e(1
0) E
xclu
des
the
follo
win
g(i)
di
vide
nd in
com
e(ii
) pr
epar
ation
of i
ncom
e re
ceiv
able
an
d in
com
e re
ceiv
ed in
adv
ance
le
dger
acc
ount
s
Pres
enta
tion
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
erfo
rman
ce s
how
ing
the
pres
enta
tion
of s
ales
rev
enue
, sal
es
retu
rns,
and
oth
er in
com
e fo
r a
trad
ing
busi
ness
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
erfo
rman
ce s
how
ing
the
pres
enta
tion
of s
ervi
ce fe
e re
venu
e an
d ot
her
inco
me
for
a se
rvic
e bu
sine
ss
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on s
how
ing
the
pres
enta
tion
of s
ervi
ce fe
e re
venu
e re
ceiv
ed in
adv
ance
for
a se
rvic
e bu
sine
ss
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on s
how
ing
the
pres
enta
tion
of in
com
e re
ceiv
able
and
in
com
e re
ceiv
ed in
adv
ance
for
both
a
trad
ing
and
a se
rvic
e bu
sine
ss
2.6.
2 Co
st o
f sal
es a
nd o
ther
exp
ense
s
1) W
hat
are
the
tran
sacti
ons
for
cost
of
sal
es a
nd o
ther
ex
pens
es?
2) H
ow a
re c
ost
of s
ales
an
d ot
her
expe
nses
pr
esen
ted
in fi
nanc
ial
stat
emen
ts?
Cont
extu
alH
ow th
e da
tes
of
paym
ents
of e
xpen
ses
can
diff
er w
ith
the
peri
od th
ey a
re
repo
rted
as
expe
nses
Conc
eptu
al•
Am
ount
s re
port
ed
Acc
ounti
ng th
eori
es•
Mat
chin
g th
eory
•
Acc
rual
bas
is o
f acc
ounti
ng
Acc
ounti
ng fo
r tr
ansa
ction
s•
Acc
ounti
ng fo
r:
(i)
cost
of s
ales
(ii)
othe
r ex
pens
es p
aid
by c
ash/
cheq
ue
Acc
ounti
ng th
eori
es•
expl
ain
the
acco
untin
g of
cos
t of
sal
es,
othe
r ex
pens
es, a
nd a
djus
tmen
ts fo
r pr
epai
d ex
pens
es a
nd e
xpen
ses
paya
ble
in r
elati
on to
rel
evan
t ac
coun
ting
theo
ries
Acc
ounti
ng fo
r tr
ansa
ction
s•
calc
ulat
e th
e co
st o
f sal
es
82
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:3)
How
are
adj
ustm
ents
for
othe
r ex
pens
esm
ade?
are
for
a pe
riod
of
time
•Pr
epay
men
ts•
Expe
nses
pay
able
•A
ccru
al b
asis
of
acco
untin
g•
Mat
chin
g th
eory
Proc
edur
al•
Reco
rd c
ost
of s
ales
,an
d ot
her
expe
nses
in th
e jo
urna
l,le
dger
acc
ount
s an
dfin
anci
al s
tate
men
ts
•Re
cord
pre
paid
expe
nses
and
expe
nses
pay
able
in th
e jo
urna
l and
finan
cial
sta
tem
ents
(iii)
expe
nses
incu
rred
but
not
pai
d(e
xpen
ses
paya
ble)
(11)
(iv)
expe
nses
not
incu
rred
but
pai
d(p
repa
id e
xpen
ses)
(11)
•Ca
lcul
ation
of c
ost
of s
ales
and
oth
erex
pens
es, p
repa
id e
xpen
ses
and
expe
nses
paya
ble
•A
mou
nts
paid
are
rec
orde
d as
oth
erex
pens
es a
t th
e po
ints
of p
aym
ents
,an
d an
y un
used
or
outs
tand
ing
porti
ons
are
adju
sted
at
the
end
of th
e fin
anci
alpe
riod
•A
djus
tmen
ts a
t en
d of
per
iod
are
to b
em
ade
agai
nst
sepa
rate
pre
paid
exp
ense
san
d ex
pens
es p
ayab
le le
dger
acc
ount
s•
Clos
ing
of a
ll co
st o
f sal
es a
nd e
xpen
ses
acco
unts
are
per
form
ed o
nly
at th
e en
dof
the
finan
cial
yea
r an
d am
ount
s ar
etr
ansf
erre
d to
the
inco
me
sum
mar
y (f
orpe
riod
s in
bet
wee
n th
e fin
anci
al y
ear,
ther
e w
ill b
e ba
lanc
es in
thes
e ac
coun
ts)
Pres
enta
tion
•Pr
esen
tatio
n of
cos
t of
sal
es a
nd o
ther
expe
nses
in th
e St
atem
ent
of F
inan
cial
Perf
orm
ance
•Pr
esen
tatio
n of
pre
paid
exp
ense
s an
dex
pens
es p
ayab
le in
the
Stat
emen
t of
Fina
ncia
l Pos
ition
•ca
lcul
ate
othe
r ex
pens
es a
djus
ted
for
prep
aid
expe
nses
and
exp
ense
s pa
yabl
e
•p r
epar
e th
e jo
urna
l ent
ries
aff
ectin
gco
st o
f sal
es, o
ther
exp
ense
s, p
repa
idex
pens
es a
nd e
xpen
ses
paya
ble
•pr
epar
e th
e co
st o
f sal
es a
nd o
ther
expe
nses
ledg
er a
ccou
nts
wit
hout
adju
stm
ents
for
prep
aid
expe
nses
and
expe
nses
pay
able
•i n
terp
ret
the
cost
of s
ales
and
oth
erex
pens
es le
dger
acc
ount
s w
ith
adju
stm
ents
for
prep
aid
expe
nses
and
expe
nses
pay
able
•an
alys
e th
e eff
ects
of p
repa
id e
xpen
ses
and
expe
nses
pay
able
on
curr
ent
liabi
lities
, cur
rent
ass
ets
and
profi
t/lo
ssfo
r th
e pe
riod
Pres
enta
tion
•pr
epar
e an
ext
ract
of t
he S
tate
men
tof
Fin
anci
al P
erfo
rman
ce s
how
ing
the
pres
enta
tion
of c
ost
of s
ales
and
oth
erex
pens
es fo
r a
trad
ing
busi
ness
•pr
epar
e an
ext
ract
of t
he S
tate
men
tof
Fin
anci
al P
erfo
rman
ce s
how
ing
the
pres
enta
tion
of o
ther
exp
ense
s fo
r a
83
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:•
Prep
aid
expe
nses
are
sho
wn
as c
urre
nt
asse
ts in
the
Stat
emen
t of
Fin
anci
al
Posi
tion
• Ex
pens
es p
ayab
les
are
show
n as
cur
rent
lia
biliti
es in
the
Stat
emen
t of
Fin
anci
al
Posi
tion
Not
e(1
1) E
xclu
des
the
prep
arati
on o
f pre
paid
ex
pens
es a
nd e
xpen
ses
paya
bles
ledg
er
acco
unts
serv
ice
busi
ness
•
prep
are
an e
xtra
ct o
f the
Sta
tem
ent
of F
inan
cial
Pos
ition
sho
win
g th
e pr
esen
tatio
n of
pre
paid
exp
ense
s an
d ex
pens
es p
ayab
le fo
r bo
th a
trad
ing
and
a se
rvic
e bu
sine
ss
2.7
Ass
ets
This
sec
tion
look
s in
to th
e as
set
item
s in
a S
tate
men
t of
Fin
anci
al P
ositi
on a
nd th
e ad
just
men
ts to
be
mad
e to
thes
e ite
ms
at th
e en
d of
a
finan
cial
per
iod.
2.7.
1 Ca
sh in
han
d an
d ca
sh a
t ba
nk
1) H
ow d
o bu
sine
sses
m
anag
e ca
sh?
2) W
hat
are
the
tran
sacti
ons
invo
lvin
g ca
sh?
3) H
ow is
cas
h
pres
ente
d in
fina
ncia
l st
atem
ents
?
Cont
extu
alRe
ceip
ts a
nd p
aym
ents
Conc
eptu
alA
sset
s ve
rsus
liab
ilitie
s
Cash
man
agem
ent
• U
nder
stan
d w
hy b
usin
esse
s ne
ed to
kee
p ca
sh fo
r op
erati
onal
nee
ds•
Und
erst
and
how
bus
ines
ses
man
age
cash
in
han
d, c
ash
at b
ank,
cas
h in
tran
sit,
cas
h re
ceip
ts a
nd c
ash
paym
ents
(12)
Acc
ounti
ng fo
r tr
ansa
ction
s•
Acc
ounti
ng fo
r re
ceip
ts a
nd p
aym
ents
-
cash
at
bank
acc
ount
refl
ects
the
amou
nt d
epos
ited
in th
e ba
nk fo
r sa
fe-
keep
ing
Acc
ounti
ng fo
r tr
ansa
ction
s•
prep
are
the
jour
nal e
ntri
es r
elat
ed to
re
ceip
ts a
nd p
aym
ents
• st
ate
the
caus
es o
f dis
hono
ured
che
que
• pr
epar
e th
e jo
urna
l ent
ries
for
dish
onou
red
cheq
ue
• pr
epar
e th
e ca
sh in
han
d an
d ca
sh a
t ba
nk le
dger
acc
ount
s
• in
terp
ret
the
cash
in h
and
and
cash
at
bank
ledg
er a
ccou
nts
84
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:Pr
oced
ural
Reco
rd c
ash
rece
ipts
, ca
sh p
aym
ents
an
d ba
nk-r
elat
ed
tran
sacti
ons
in
the
jour
nal,
ledg
er
acco
unts
and
fina
ncia
l st
atem
ents
- th
e us
e of
che
ques
and
how
di
shon
oure
d ch
eque
s ha
ppen
- ac
coun
ting
for
dish
onou
red
cheq
ues,
w
ith
and
wit
hout
cas
h di
scou
nt
prev
ious
ly p
rovi
ded/
rece
ived
Pres
enta
tion
• Pr
esen
tatio
n of
cas
h in
han
d, c
ash
at
bank
and
ban
k ov
erdr
aft in
the
Stat
emen
t of
Fin
anci
al P
ositi
on
Not
e(1
2) T
he in
tern
al c
ontr
ol o
f cas
h is
cov
ered
in
secti
on 3
.4
Pres
enta
tion
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on s
how
ing
the
pres
enta
tion
of c
ash
at b
ank,
ban
k ov
erdr
aft a
nd c
ash
in h
and
2.7.
2 In
vent
orie
s
1) W
hy d
o bu
sine
sses
ke
ep in
vent
orie
s?
2) H
ow d
o bu
sine
sses
m
anag
e in
vent
orie
s?
3) W
hat
are
the
tran
sacti
ons
invo
lvin
g th
e pu
rcha
se a
nd s
ale
of in
vent
ory?
Cont
extu
al
Inve
ntor
y m
anag
emen
t
Conc
eptu
al•
Acc
ounti
ng a
nd
non-
acco
untin
g in
for-
mati
on•
Rele
vanc
e of
in
form
ation
Inve
ntor
y m
anag
emen
t•
Und
erst
and
why
bus
ines
ses
keep
in
vent
orie
s to
avo
id o
ut-o
f-st
ock
situ
ation
s•
Und
erst
and
how
bus
ines
ses
man
age
inve
ntor
ies
by
- ke
epin
g pr
oper
rec
ords
to tr
ack
inve
ntor
y-
keep
ing
phys
ical
inve
ntor
y in
the
war
ehou
se-
buyi
ng in
sura
nce
to in
sure
the
inve
ntor
y
Inve
ntor
y m
anag
emen
t•
expl
ain
why
bus
ines
ses
keep
inve
ntor
ies
• de
scri
be h
ow b
usin
esse
s m
anag
e in
vent
orie
s
• an
alys
e, e
valu
ate
and
mak
e de
cisi
ons
abou
t th
e pu
rcha
se o
f inv
ento
ry b
y co
nsid
erin
g ac
coun
ting
and
non-
acco
untin
g in
form
ation
85
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:4)
How
is in
vent
ory
pres
ente
d in
fina
ncia
l st
atem
ents
?
5) H
ow is
inve
ntor
y va
lued
?
• Pr
uden
ce th
eory
• Va
luati
on o
f in
vent
ory
– at
the
low
er o
f cos
t an
d ne
t re
alis
able
val
ue•
Adj
ustm
ents
– to
re
cogn
ise
impa
irm
ent
loss
on
inve
ntor
y
Proc
edur
alRe
cord
pur
chas
e an
d sa
les
of in
vent
ory,
ot
her
rela
ted
inve
ntor
y tr
ansa
ction
s an
d an
y ad
just
men
ts fo
r in
vent
ory
in th
e jo
urna
l, le
dger
acc
ount
s an
d fin
anci
al s
tate
men
ts
• U
nder
stan
d ho
w b
usin
esse
s m
anag
e an
d m
ake
deci
sion
s ab
out
type
s of
inve
ntor
y to
buy
by
cons
ider
ing
both
acc
ounti
ng
and
non-
acco
untin
g in
form
ation
- ac
coun
ting
info
rmati
on: c
ost
of
inve
ntor
y an
d st
orag
e co
st
- no
n-ac
coun
ting
info
rmati
on in
clud
es
only
(i)
ty
pes
of s
tora
ge(ii
) na
ture
of p
rodu
ct(ii
i) cu
stom
er p
refe
renc
e
Acc
ounti
ng th
eori
es•
Prud
ence
theo
ry
Acc
ounti
ng fo
r tr
ansa
ction
s•
Acc
ounti
ng fo
r pu
rcha
ses
of in
vent
ory,
re
turn
of i
nven
tory
, sal
es o
f inv
ento
ry
and
sale
s re
turn
s fo
r a
trad
ing
busi
ness
- pe
rpet
ual i
nven
tory
rec
ordi
ng m
etho
d (1
3)-
good
s ar
e in
vent
orie
d at
the
poin
ts
of p
urch
ases
and
exp
ense
d as
cos
t of
sa
les
at th
e po
ints
of s
ales
Acc
ounti
ng th
eori
es•
expl
ain
the
valu
ation
of i
nven
tory
in
rela
tion
to r
elev
ant
acco
untin
g th
eori
es
Acc
ounti
ng fo
r tr
ansa
ction
s•
iden
tify
the
cost
s of
pur
chas
es
• ca
lcul
ate
the
cost
of s
ales
and
end
ing
inve
ntor
y
• ca
lcul
ate
the
impa
irm
ent
loss
on
inve
ntor
y ad
just
ed fo
r in
sura
nce
clai
ms
if an
y
• pr
epar
e th
e jo
urna
l ent
ries
on
inve
ntor
y at
poi
nts
of p
urch
ases
and
cos
t of
sal
es a
t po
ints
of s
ales
• pr
epar
e th
e jo
urna
l ent
ry to
rec
ord
impa
irm
ent
loss
on
inve
ntor
y
• pr
epar
e th
e in
vent
ory
ledg
er a
ccou
nt
wit
hout
adj
ustm
ents
for
impa
irm
ent
loss
on
inve
ntor
y
86
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:-
cost
s of
pur
chas
es in
vent
orie
d in
clud
eth
e pu
rcha
se p
rice
and
cos
ts to
bri
ng in
inve
ntor
y le
ss r
etur
ns (1
4)•
Acc
ounti
ng fo
r co
st o
f sal
es-
calc
ulati
on o
f cos
t of
sal
es a
nd e
ndin
gin
vent
ory
usin
g th
e FI
FO m
etho
d (1
5)
Valu
ation
•Va
luati
on o
f end
ing
inve
ntor
y (1
6)-
Sing
apor
e’s
Fina
ncia
l Rep
ortin
gSt
anda
rds
(FRS
) 2 s
tate
s th
at“i
nven
tori
es s
hall
be m
easu
red
at th
elo
wer
of c
ost
and
net
real
isab
le v
alue
”-
acco
untin
g fo
r im
pair
men
t lo
ss o
nin
vent
ory
whe
n th
e ne
t re
alis
able
val
ueof
inve
ntor
y is
low
er th
an b
ook
valu
eof
inve
ntor
y at
the
end
of th
e fin
anci
alpe
riod
(17)
Pres
enta
tion
•Pr
esen
tatio
n of
inve
ntor
y, c
ost
of s
ales
and
impa
irm
ent
loss
on
inve
ntor
y in
the
Stat
emen
t of
Fin
anci
al P
ositi
on a
ndSt
atem
ent
of F
inan
cial
Per
form
ance
•in
terp
ret
the
inve
ntor
y le
dger
acc
ount
wit
h ad
just
men
ts fo
r im
pair
men
t lo
ss o
nin
vent
ory
and/
or in
sura
nce
clai
ms
•a n
alys
e th
e eff
ects
of u
nder
stat
emen
tor
ove
rsta
tem
ent
of in
vent
ory
on g
ross
profi
t/lo
ss a
nd p
rofit
for
the
peri
od/l
oss
for
the
curr
ent
finan
cial
per
iod
Valu
ation
•st
ate
the
valu
ation
met
hod
for
inve
ntor
yin
the
Stat
emen
t of
Fin
anci
al P
ositi
on
Pres
enta
tion
•pr
epar
e an
ext
ract
of t
he S
tate
men
tof
Fin
anci
al P
ositi
on a
nd S
tate
men
t of
Fina
ncia
l Per
form
ance
sho
win
g th
e va
lues
and
pres
enta
tion
of e
ndin
g in
vent
ory,
cost
of s
ales
and
impa
irm
ent
loss
on
inve
ntor
y
87
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:N
otes
(13)
Adj
ustm
ent
for
diff
eren
ces
betw
een
endi
ng in
vent
ory
valu
es d
eriv
ed fr
om
perp
etua
l inv
ento
ry r
ecor
ding
met
hod
and
phys
ical
inve
ntor
y co
unt
is n
ot
requ
ired
.(1
4) T
he F
RS 2
sta
tes
that
“th
e co
st o
f in
vent
orie
s sh
all c
ompr
ise
all c
ost
of
purc
hase
s an
d ot
her
cost
s in
curr
ed
in b
ring
ing
the
inve
ntor
ies
to th
eir
pres
ent
loca
tion
and
cond
ition
”.
Prep
aid
expe
nses
or
expe
nses
pay
able
on
pur
chas
e ar
e ex
clud
ed. I
n ad
ditio
n,
adju
stm
ents
to c
osts
of p
urch
ases
that
w
ill a
ffec
t co
st o
f sal
es a
nd e
ndin
g in
vent
ory
are
excl
uded
. Adj
ustm
ent
to in
vent
ory
valu
e in
clud
es o
nly
impa
irm
ent
loss
on
inve
ntor
y.
(15)
Sce
nari
os to
exc
lude
: (i)
m
ore
than
one
fina
ncia
l per
iod,
(ii
) be
ginn
ing
inve
ntor
y co
mpr
isin
g m
ore
than
one
bat
ch o
f goo
ds,
(iii)
a ba
tch
of g
oods
with
onl
y va
lue
or
quan
tity
88
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:(iv
) co
st o
f sal
es m
easu
red
by o
ther
m
etho
ds b
esid
es F
IFO
to a
n en
tire
batc
h (o
r ba
tche
s) o
f goo
ds, w
ith
parti
al a
ppor
tionm
ent
of a
ny b
atch
(16)
Cal
cula
ting
unit
cos
t, d
eriv
ing
inve
ntor
y va
lue
from
uni
t co
st a
nd q
uanti
ty,
and
reco
rdin
g in
sto
ck c
ards
are
not
re
quir
ed, a
nd g
oods
ret
urne
d fr
om
cust
omer
s w
ill n
ot le
ad to
ret
urn
of th
e sa
me
good
s to
the
supp
lier
(17)
Pre
para
tion
of im
pair
men
t lo
ss in
th
e in
vent
ory
ledg
er a
ccou
nt is
not
re
quir
ed
2.7.
3 Tr
ade
rece
ivab
les
1) W
hy d
o bu
sine
sses
gr
ant
cred
it to
cu
stom
ers?
2) H
ow d
o bu
sine
sses
m
anag
e tr
ade
rece
ivab
les?
Cont
extu
al
Trad
e re
ceiv
able
s m
anag
emen
t
Conc
eptu
al•
Acc
ounti
ng a
nd
non-
acco
untin
g in
form
ation
• Re
leva
nce
of
info
rmati
on
Trad
e re
ceiv
able
s m
anag
emen
t•
Und
erst
and
why
bus
ines
ses
give
cre
dit
to
cust
omer
s to
incr
ease
rev
enue
• U
nder
stan
d ho
w b
usin
esse
s m
anag
e an
d m
ake
deci
sion
s ab
out
trad
e re
ceiv
able
s th
roug
h co
nsid
erin
g th
e cr
edit
wor
thin
ess
of e
xisti
ng a
nd n
ew c
usto
mer
s/
trad
e re
ceiv
able
s by
con
side
ring
bo
th a
ccou
nting
and
non
-acc
ounti
ng
info
rmati
on
Trad
e re
ceiv
able
s m
anag
emen
t•
anal
yse,
eva
luat
e an
d m
ake
deci
sion
s ab
out
the
cred
it w
orth
ines
s of
exi
sting
an
d ne
w c
usto
mer
s/tr
ade
rece
ivab
les
by
cons
ider
ing
both
acc
ounti
ng a
nd n
on-
acco
untin
g in
form
ation
89
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:3)
Wha
t ar
e th
etr
ansa
ction
s in
volv
ing
trad
e re
ceiv
able
s?
4) H
ow a
re tr
ade
rece
ivab
les
pres
ente
d in
fina
ncia
lst
atem
ents
?
•Es
timat
ed lo
ss v
sac
tual
loss
•M
atch
ing
theo
ry•
P rud
ence
theo
ry•
Valu
ation
of a
sset
s–
gene
ral p
rovi
sion
for
allo
wan
ce fo
rim
pair
men
t of
trad
ere
ceiv
able
s•
Impa
irm
ent
loss
on
trad
e re
ceiv
able
s
Proc
edur
alRe
cord
tran
sacti
ons
rela
ted
to tr
ade
rece
ivab
les
and
any
adju
stm
ents
on
trad
e re
ceiv
able
s in
th
e jo
urna
l led
ger
acco
unts
and
fina
ncia
l st
atem
ents
-ac
coun
ting
info
rmati
on: t
rade
rece
ivab
les
bala
nce,
cre
dit
term
s an
dca
sh d
isco
unt,
num
ber
of d
ays
trad
ere
ceiv
able
s ar
e ov
erdu
e, e
xisti
ngcu
stom
ers’
his
tory
of r
epay
men
t-
non-
acco
untin
g in
form
ation
incl
udes
only
(18)
the
follo
win
g(i)
econ
omic
out
look
(ii)
spec
ific
indu
stry
out
look
(iii)
repu
tatio
n of
cus
tom
er (e
.g.
soci
ally
res
pons
ible
, his
tory
of t
hebu
sine
ss)
(iv)
cust
omer
s’ h
isto
ry o
f rep
aym
ent
Acc
ounti
ng th
eori
es•
Mat
chin
g th
eory
•Pr
uden
ce th
eory
Acc
ounti
ng fo
r tr
ansa
ction
s•
Acc
ounti
ng fo
r tr
ansa
ction
s aff
ectin
gtr
ade
rece
ivab
les
of a
trad
ing
busi
ness
:-
cred
it s
ales
and
sal
es r
etur
ns-
cash
dis
coun
ts a
nd tr
ade
disc
ount
s,in
clud
ing
thei
r pu
rpos
es a
ndca
lcul
ation
s
Acc
ounti
ng th
eori
es•
expl
ain
the
acco
untin
g of
impa
irm
ent
loss
on
trad
e re
ceiv
able
s in
rel
ation
tore
leva
nt a
ccou
nting
theo
ries
Acc
ounti
ng fo
r tr
ansa
ction
s•
defin
e tr
ade
disc
ount
•ex
plai
n w
hy a
trad
e di
scou
nt is
giv
en
•de
fine
cash
dis
coun
t
•ex
plai
n w
hy a
cas
h di
scou
nt is
giv
en
•di
sting
uish
bet
wee
n tr
ade
and
cash
disc
ount
s
•ca
lcul
ate
the
trad
e di
scou
nt a
t th
e sa
le o
fan
d re
turn
of g
oods
•ca
lcul
ate
the
cash
dis
coun
t
•pr
epar
e th
e jo
urna
l ent
ries
to r
ecor
dtr
ansa
ction
s aff
ectin
g tr
ade
rece
ivab
les
•pr
epar
e th
e jo
urna
l ent
ries
on
allo
wan
cefo
r im
pair
men
t of
trad
e re
ceiv
able
s
•pr
epar
e a
trad
e re
ceiv
able
ledg
er a
ccou
nt
90
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:-
wri
te-o
ff o
f ful
l or
parti
al a
mou
nt o
fde
bt-
rece
ipts
in fu
ll or
par
tial a
mou
nt o
fde
bt o
wed
-di
shon
oure
d ch
eque
s•
Acc
ounti
ng fo
r tr
ansa
ction
s aff
ectin
gtr
ade
rece
ivab
les
of s
ervi
ce b
usin
ess:
-s e
rvic
es p
rovi
ded
on c
redi
t-
cash
dis
coun
ts a
nd tr
ade
disc
ount
s,in
clud
ing
thei
r pu
rpos
es a
ndca
lcul
ation
s-
wri
te-o
ff o
f ful
l or
parti
al a
mou
nt o
fde
bt-
rece
ipts
in fu
ll or
par
tial a
mou
nt o
fde
bt o
wed
-di
shon
oure
d ch
eque
s
Valu
ation
•Va
luati
on o
f tra
de r
ecei
vabl
es (1
9)-
trad
e re
ceiv
able
s re
pres
ent
the
colle
ction
s in
the
imm
edia
te fu
ture
.-
allo
wan
ce fo
r im
pair
men
t of
trad
ere
ceiv
able
s is
an
estim
ate
of th
e va
lue
of d
ebts
that
may
be
unco
llecti
ble
inth
e fu
ture
(20)
•in
terp
ret
the
(i) tr
ade
rece
ivab
les,
(ii)
allo
wan
ce fo
r im
pair
men
t of
trad
ere
ceiv
able
s, (i
ii) im
pair
men
t lo
ss o
n tr
ade
rece
ivab
les
ledg
er a
ccou
nts
•an
alys
e th
e eff
ects
of c
ash
disc
ount
on p
rofit
for
the
peri
od a
nd tr
ade
rece
ivab
les
•an
alys
e th
e eff
ects
of c
hang
es in
allo
wan
ce fo
r im
pair
men
t of
trad
ere
ceiv
able
s an
d im
pair
men
t lo
ss o
n tr
ade
rece
ivab
les
on th
e pr
ofit/
loss
for
the
peri
od a
nd tr
ade
rece
ivab
les
Valu
ation
•st
ate
the
valu
ation
met
hod
for
trad
ere
ceiv
able
s in
the
Stat
emen
t of
Fin
anci
alPo
sitio
n
Pres
enta
tion
•pr
epar
e an
ext
ract
of t
he S
tate
men
tof
Fin
anci
al P
ositi
on a
nd S
tate
men
tof
Fin
anci
al P
erfo
rman
ce s
how
ing
the
pres
enta
tion
of tr
ade
rece
ivab
les,
disc
ount
allo
wed
, allo
wan
ce fo
rim
pair
men
t of
trad
e re
ceiv
able
s an
dim
pair
men
t lo
ss o
n tr
ade
rece
ivab
les
91
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:-
calc
ulati
on a
nd a
ccou
nting
of
allo
wan
ce fo
r im
pair
men
t of
trad
ere
ceiv
able
s-
a d e
crea
se in
allo
wan
ce is
trea
ted
asa
redu
ction
aga
inst
exp
ense
s in
the
Stat
emen
t of
Fin
anci
al P
erfo
rman
ce
Pres
enta
tion
•Pr
esen
tatio
n of
trad
e re
ceiv
able
s,al
low
ance
for
impa
irm
ent
of tr
ade
rece
ivab
les,
and
impa
irm
ent
loss
on
trad
ere
ceiv
able
s in
the
Stat
emen
t of
Fin
anci
alPo
sitio
n an
d St
atem
ent
of F
inan
cial
Perf
orm
ance
Not
es(1
8)In
form
ation
abo
ut e
cono
mic
out
look
and
spec
ific
indu
stry
out
look
are
tobe
exp
licitl
y gi
ven
(stu
dent
s ar
e no
tex
pect
ed to
rea
d an
d in
terp
ret
rela
ted
grap
hs, c
hart
s or
any
form
s of
rep
orts
to e
xtra
ct th
is in
form
ation
)(1
9)Sc
enar
ios
to in
clud
e on
ly:
(i)pr
ovid
ing
allo
wan
ce fo
r th
e fir
sttim
e(ii
)in
crea
se in
allo
wan
ce o
ver
prio
rye
ar(ii
i)d e
crea
se in
allo
wan
ce o
ver
prio
rye
ar
92
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:(2
0) S
inga
pore
’s F
inan
cial
Rep
ortin
g St
anda
rd 1
09 o
n Fi
nanc
ial I
nstr
umen
ts
stat
es th
at “
whe
n m
akin
g th
e as
sess
men
t of
cre
dit
risk
, an
entit
y sh
all
use
the
chan
ge in
the
risk
of a
def
ault
occu
rrin
g ov
er th
e ex
pect
ed li
fe o
f th
e fin
anci
al in
stru
men
t in
stea
d of
th
e ch
ange
in th
e am
ount
of e
xpec
ted
cred
it lo
sses
”. T
hus,
the
gene
ral
prov
isio
n fo
r al
low
ance
for
impa
irm
ent
of tr
ade
rece
ivab
les
will
be
used
for
this
sy
llabu
s. T
he p
repa
ratio
n of
allo
wan
ce
for
impa
irm
ent
of tr
ade
rece
ivab
les
and
impa
irm
ent
loss
on
trad
e re
ceiv
able
s le
dger
acc
ount
s ar
e no
t re
quir
ed.
2.7.
4 N
on-c
urre
nt a
sset
s
1) W
hat
is th
e di
ffer
ence
bet
wee
n ca
pita
l and
rev
enue
ex
pend
itur
e?
2) W
hat
are
the
tran
sacti
ons
invo
lvin
g no
n-cu
rren
t as
sets
?
Cont
extu
alBu
ying
of n
on-c
urre
nt
asse
ts
Non
-cur
rent
ass
ets
man
agem
ent
• U
nder
stan
d th
e ty
pes
of e
xpen
ditu
re th
at
busi
ness
es c
an c
apit
alis
e
Acc
ounti
ng th
eori
es•
Mat
chin
g th
eory
•
Cons
iste
ncy
theo
ry
• M
ater
ialit
y th
eory
• Pr
uden
ce th
eory
Acc
ounti
ng th
eori
es•
expl
ain
the
appl
icati
on o
f the
mat
eria
lity
theo
ry o
n th
e tr
eatm
ent
of c
apit
al a
nd
reve
nue
expe
ndit
ure
• ex
plai
n th
e ne
ed to
cha
rge
depr
ecia
tion
in r
elati
on to
rel
evan
t ac
coun
ting
theo
ries
• ex
plai
n th
e pr
esen
tatio
n of
net
boo
k va
lue
in r
elati
on to
rel
evan
t ac
coun
ting
theo
ries
93
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:3)
How
are
non
-cur
rent
as
sets
pre
sent
ed in
fin
anci
al s
tate
men
ts?
Conc
eptu
al•
Capi
tal v
s re
venu
e ex
pend
itur
e•
Mat
eria
lity
theo
ry•
Mat
chin
g th
eory
• Co
nsis
tenc
y th
eory
• Pr
uden
ce th
eory
• Va
luati
on o
f non
-cu
rren
t as
sets
– a
t co
st le
ss a
ccum
ulat
ed
depr
ecia
tion
Proc
edur
al•
Reco
rd tr
ansa
ction
s re
late
d to
non
-cu
rren
t as
sets
and
an
y ad
just
men
ts
for
non-
curr
ent
asse
ts in
the
jour
nal,
ledg
er a
ccou
nts
and
finan
cial
sta
tem
ents
Acc
ounti
ng fo
r tr
ansa
ction
s•
Acc
ounti
ng fo
r re
venu
e ve
rsus
cap
ital
ex
pend
itur
e-
the
acco
untin
g tr
eatm
ent
of c
apit
al
and
reve
nue
expe
ndit
ure,
spe
cific
ally
w
heth
er e
xpen
ditu
re in
curr
ed in
re
latio
n to
a n
on-c
urre
nt a
sset
is to
be
cap
ital
ised
as
part
of t
he n
on-
curr
ent
asse
t’s
cost
or
reco
rded
in th
e St
atem
ent
of F
inan
cial
Per
form
ance
as
an e
xpen
se-
exam
ples
of c
apit
al a
nd r
even
ue
expe
ndit
ure
- ex
pend
itur
e on
non
-cur
rent
ass
ets
subs
eque
nt to
acq
uisi
tion
can
only
be
capi
talis
ed if
it in
crea
ses
the
capa
city
an
d us
eful
life
of t
he n
on-c
urre
nt
asse
ts a
nd im
prov
es th
eir
func
tion
- eff
ects
of e
rron
eous
cla
ssifi
catio
n an
d tr
eatm
ent
of e
xpen
ditu
re o
n fin
anci
al
stat
emen
ts•
Acc
ounti
ng fo
r pu
rcha
se o
f non
-cur
rent
as
sets
(21)
- co
st o
f non
-cur
rent
ass
ets
com
pris
ing
purc
hase
pri
ces
and
the
cost
s of
br
ingi
ng th
e no
n-cu
rren
t as
sets
to
oper
ating
con
ditio
n
Acc
ounti
ng fo
r tr
ansa
ction
sCa
pita
l and
rev
enue
exp
endi
ture
• de
fine
capi
tal a
nd r
even
ue e
xpen
ditu
re
• di
sting
uish
bet
wee
n ca
pita
l and
rev
enue
ex
pend
itur
e
• cl
assi
fy a
ccou
nting
tran
sacti
ons
as c
apit
al
and
reve
nue
expe
ndit
ure
• an
alys
e th
e eff
ects
of d
iffer
ence
s in
cl
assi
ficati
on a
nd tr
eatm
ent
of c
apit
al
and
reve
nue
expe
ndit
ure
on fi
nanc
ial
stat
emen
ts
Purc
hase
of n
on-c
urre
nt a
sset
s•
prep
are
the
jour
nal e
ntri
es o
n pu
rcha
ses
of n
on-c
urre
nt a
sset
s
• pr
epar
e th
e no
n-cu
rren
t as
set
ledg
er
acco
unt
to s
how
the
purc
hase
of n
on-
curr
ent
asse
ts
• in
terp
ret
the
non-
curr
ent
asse
t le
dger
ac
coun
t
Dep
reci
ation
and
acc
umul
ated
dep
reci
ation
•
defin
e de
prec
iatio
n an
d ac
cum
ulat
ed
depr
ecia
tion
94
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:•
Acc
ounti
ng fo
r de
prec
iatio
n an
d ac
cum
ulat
ed d
epre
ciati
on (d
epre
ciati
on
to d
ate)
(22)
-
caus
es o
f dep
reci
ation
-
met
hods
of d
epre
ciati
on
o st
raig
ht li
ne
o re
duci
ng b
alan
ce
- su
itab
ility
of d
epre
ciati
on m
etho
ds fo
r di
ffer
ent
clas
ses
of n
on-c
urre
nt a
sset
s -
net
book
val
ue r
epre
sent
s th
e es
timat
ed fu
ture
eco
nom
ic v
alue
of a
no
n-cu
rren
t as
set
- ac
cum
ulat
ed d
epre
ciati
on is
an
appr
oxim
ation
of t
he r
educ
tion
in
econ
omic
val
ue o
f a n
on-c
urre
nt a
sset
Valu
ation
• Va
luati
on o
f non
-cur
rent
ass
ets
- at
cos
t le
ss a
ccum
ulat
ed d
epre
ciati
on
Pres
enta
tion
• Pr
esen
tatio
n of
non
-cur
rent
ass
ets
at
net
book
val
ue (c
ost
less
acc
umul
ated
de
prec
iatio
n) in
the
Stat
emen
t of
Fi
nanc
ial P
ositi
on•
Pres
enta
tion
of d
epre
ciati
on o
f non
-cu
rren
t as
set
in th
e St
atem
ent
of
Fina
ncia
l Per
form
ance
• st
ate
the
caus
es o
f dep
reci
ation
• st
ate
and
disti
ngui
sh th
e de
prec
iatio
n m
etho
ds o
f (i)
stra
ight
-line
and
(ii)
redu
cing
-bal
ance
met
hods
• ex
plai
n th
e su
itab
ility
of s
elec
ted
depr
ecia
tion
met
hods
for
diff
eren
t ty
pes
of n
on-c
urre
nt a
sset
s
• ca
lcul
ate
depr
ecia
tion
and
accu
mul
ated
de
prec
iatio
n ac
cord
ing
to th
e (i)
str
aigh
t-lin
e an
d (ii
) red
ucin
g-ba
lanc
e m
etho
ds
• ca
lcul
ate
the
rate
of d
epre
ciati
on, l
engt
h of
use
ful l
ife, a
nnua
l dep
reci
ation
, ac
cum
ulat
ed d
epre
ciati
on a
nd n
et b
ook
valu
e or
cos
t of
non
-cur
rent
ass
ets
• pr
epar
e th
e jo
urna
l ent
ries
on
depr
ecia
tion
and
accu
mul
ated
de
prec
iatio
n
• an
alys
e th
e eff
ects
of d
iffer
ent
depr
ecia
tion
met
hods
on
profi
t/lo
ss fo
r th
e pe
riod
and
net
boo
k va
lue
of n
on-
curr
ent
asse
ts
• in
terp
ret
the
(i) d
epre
ciati
on a
nd
(ii) a
ccum
ulat
ed d
epre
ciati
on le
dger
ac
coun
ts
95
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:•
Acc
ounti
ng fo
r de
prec
iatio
n an
d ac
cum
ulat
ed d
epre
ciati
on (d
epre
ciati
on
to d
ate)
(22)
-
caus
es o
f dep
reci
ation
-
met
hods
of d
epre
ciati
on
o st
raig
ht li
ne
o re
duci
ng b
alan
ce
- su
itab
ility
of d
epre
ciati
on m
etho
ds fo
r di
ffer
ent
clas
ses
of n
on-c
urre
nt a
sset
s -
net
book
val
ue r
epre
sent
s th
e es
timat
ed fu
ture
eco
nom
ic v
alue
of a
no
n-cu
rren
t as
set
- ac
cum
ulat
ed d
epre
ciati
on is
an
appr
oxim
ation
of t
he r
educ
tion
in
econ
omic
val
ue o
f a n
on-c
urre
nt a
sset
Valu
ation
• Va
luati
on o
f non
-cur
rent
ass
ets
- at
cos
t le
ss a
ccum
ulat
ed d
epre
ciati
on
Pres
enta
tion
• Pr
esen
tatio
n of
non
-cur
rent
ass
ets
at
net
book
val
ue (c
ost
less
acc
umul
ated
de
prec
iatio
n) in
the
Stat
emen
t of
Fi
nanc
ial P
ositi
on•
Pres
enta
tion
of d
epre
ciati
on o
f non
-cu
rren
t as
set
in th
e St
atem
ent
of
Fina
ncia
l Per
form
ance
• st
ate
the
caus
es o
f dep
reci
ation
• st
ate
and
disti
ngui
sh th
e de
prec
iatio
n m
etho
ds o
f (i)
stra
ight
-line
and
(ii)
redu
cing
-bal
ance
met
hods
• ex
plai
n th
e su
itab
ility
of s
elec
ted
depr
ecia
tion
met
hods
for
diff
eren
t ty
pes
of n
on-c
urre
nt a
sset
s
• ca
lcul
ate
depr
ecia
tion
and
accu
mul
ated
de
prec
iatio
n ac
cord
ing
to th
e (i)
str
aigh
t-lin
e an
d (ii
) red
ucin
g-ba
lanc
e m
etho
ds
• ca
lcul
ate
the
rate
of d
epre
ciati
on, l
engt
h of
use
ful l
ife, a
nnua
l dep
reci
ation
, ac
cum
ulat
ed d
epre
ciati
on a
nd n
et b
ook
valu
e or
cos
t of
non
-cur
rent
ass
ets
• pr
epar
e th
e jo
urna
l ent
ries
on
depr
ecia
tion
and
accu
mul
ated
de
prec
iatio
n
• an
alys
e th
e eff
ects
of d
iffer
ent
depr
ecia
tion
met
hods
on
profi
t/lo
ss fo
r th
e pe
riod
and
net
boo
k va
lue
of n
on-
curr
ent
asse
ts
• in
terp
ret
the
(i) d
epre
ciati
on a
nd
(ii) a
ccum
ulat
ed d
epre
ciati
on le
dger
ac
coun
ts
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:N
otes
(21)
Sce
nari
o to
incl
ude
only
pur
chas
es
of n
on-c
urre
nt a
sset
s by
cas
h an
d on
cr
edit,
and
con
trib
ution
of n
on-c
urre
nt
asse
ts b
y th
e ow
ner
(22)
Sce
nari
os to
incl
ude
only
par
tial
(by
who
le m
onth
) or
full
year
of
depr
ecia
tion
in th
e ye
ar o
f acq
uisi
tion.
Th
e pr
epar
ation
of a
ccum
ulat
ed
depr
ecia
tion
and
depr
ecia
tion
ledg
er
acco
unts
are
not
req
uire
d.
Valu
ation
• st
ate
the
valu
ation
met
hod
for
non-
curr
ent
asse
ts in
the
Stat
emen
t of
Fi
nanc
ial P
ositi
on
Pres
enta
tion
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on a
nd S
tate
men
t of
Fin
anci
al P
erfo
rman
ce s
how
ing
the
pres
enta
tion
of n
et b
ook
valu
e,
accu
mul
ated
dep
reci
ation
and
de
prec
iatio
n
2.8
Liab
iliti
esTh
is s
ectio
n lo
oks
into
the
liabi
lity
item
s in
a S
tate
men
t of
Fin
anci
al P
ositi
on a
nd th
e ad
just
men
ts to
be
mad
e to
thes
e ite
ms
at th
e en
d of
a
finan
cial
per
iod.
2.8.
1 Tr
ade
paya
bles
1) H
ow d
o bu
sine
sses
m
anag
e tr
ade
paya
bles
?
2) W
hat
are
the
tran
sacti
ons
invo
lvin
g tr
ade
paya
bles
?
Cont
extu
alM
anag
ing
supp
liers
and
pu
rcha
sing
on
cred
it
Conc
eptu
alLi
abili
ties
Supp
lier
man
agem
ent
• U
nder
stan
d w
hy b
usin
esse
s bu
y on
cre
dit
inst
ead
of p
ayin
g ca
sh
• U
nder
stan
d ho
w b
usin
esse
s m
anag
e su
pplie
rs a
nd d
ecid
e w
hich
sup
plie
r to
bu
y fr
om b
y co
nsid
erin
g bo
th a
ccou
nting
an
d no
n-ac
coun
ting
info
rmati
on.
Supp
lier
man
agem
ent
• an
alys
e, e
valu
ate
and
mak
e de
cisi
ons
abou
t w
hich
sup
plie
r to
buy
from
by
cons
ider
ing
both
acc
ounti
ng a
nd n
on-
acco
untin
g in
form
ation
Acc
ounti
ng fo
r tr
ansa
ction
s•
defin
e tr
ade
disc
ount
96
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:3)
How
are
trad
e pa
yabl
es p
rese
nted
in
finan
cial
sta
tem
ents
?
Proc
edur
alRe
cord
tran
sacti
ons
rela
ted
to tr
ade
paya
bles
in th
e jo
urna
l, le
dger
acc
ount
s an
d fin
anci
al s
tate
men
ts
- A
ccou
nting
info
rmati
on: c
ost
of
inve
ntor
y, c
redi
t te
rms
and
cash
di
scou
nt, c
ost
of s
uppl
ies,
cos
t of
no
n-cu
rren
t as
sets
, del
iver
y ch
arge
s,
trad
e di
scou
nt a
nd c
ost
of s
ervi
ces
(inst
alla
tion
and
mai
nten
ance
)-
Non
-acc
ounti
ng in
form
ation
incl
udes
on
ly th
e fo
llow
ing:
(i) l
ocal
or
over
seas
sup
plie
r(ii
) aft
er-s
ales
ser
vice
(iii)
retu
rn p
olic
y(iv
) onl
ine
vs b
rick
-and
-mor
tar
supp
lier
(v) r
eput
ation
of s
uppl
ier
(e.g
., so
cial
ly
resp
onsi
ble,
his
tory
of t
he b
usin
ess)
(v
i) w
arra
nty
Acc
ounti
ng fo
r tr
ansa
ction
s•
Acc
ounti
ng fo
r tr
ansa
ction
s aff
ectin
g th
e cr
edit
pur
chas
e of
goo
ds a
nd s
ervi
ces
and
non-
curr
ent
asse
ts:
- cr
edit
pur
chas
es o
f goo
ds a
nd s
ervi
ces
- cr
edit
pur
chas
es o
f non
-cur
rent
ass
ets
- re
turn
s of
goo
ds
- ca
sh d
isco
unts
and
trad
e di
scou
nts,
in
clud
ing
thei
r pu
rpos
es a
nd
calc
ulati
ons
• ex
plai
n w
hy a
trad
e di
scou
nt is
rec
eive
d
• de
fine
cash
dis
coun
t
• ex
plai
n w
hy a
cas
h di
scou
nt is
rec
eive
d
• di
sting
uish
bet
wee
n tr
ade
and
cash
di
scou
nts
• ca
lcul
ate
the
trad
e di
scou
nt a
t th
e pu
rcha
se a
nd r
etur
n of
goo
ds
• ca
lcul
ate
the
cash
dis
coun
t at
pay
men
t
• pr
epar
e th
e jo
urna
l ent
ries
to r
ecor
d tr
ansa
ction
s aff
ectin
g tr
ade
paya
bles
• pr
epar
e a
trad
e pa
yabl
e le
dger
acc
ount
• in
terp
ret
a tr
ade
paya
ble
ledg
er a
ccou
nt
• an
alys
e th
e eff
ects
of c
ash
disc
ount
on
pro
fit/l
oss
for
the
peri
od a
nd tr
ade
paya
bles
Pres
enta
tion
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
erfo
rman
ce s
how
ing
the
pres
enta
tion
of d
isco
unt
rece
ived
97
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:-
full
or p
artia
l pay
men
ts-
frei
ght
char
ges
Pre
sent
ation
• Pr
esen
tatio
n of
trad
e pa
yabl
es in
the
Stat
emen
t of
Fin
anci
al P
ositi
on
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on s
how
ing
the
pres
enta
tion
of tr
ade
paya
bles
2.8.
2 Lo
ng-t
erm
bor
row
ings
1) W
hat
are
the
tran
sacti
ons
for
long
-te
rm b
orro
win
gs?
2) H
ow a
re lo
ng-
term
bor
row
ings
pr
esen
ted
in fi
nanc
ial
stat
emen
ts?
Cont
extu
alO
btai
ning
loan
for
busi
ness
use
Conc
eptu
al•
Curr
ent
vs n
on-
curr
ent
liabi
lities
• M
atch
ing
theo
ry•
Acc
rual
bas
is o
f ac
coun
ting
Proc
edur
alRe
cord
tran
sacti
ons
rela
ted
to lo
ans
and
loan
inte
rest
s in
th
e jo
urna
l, le
dger
ac
coun
ts a
nd fi
nanc
ial
stat
emen
ts
Long
-ter
m b
orro
win
gs m
anag
emen
t•
Und
erst
and
why
bus
ines
ses
obta
in lo
ans
to fi
nanc
e it
s bu
sine
ss o
pera
tions
Acc
ounti
ng th
eori
es•
Mat
chin
g th
eory
• A
ccru
al b
asis
of a
ccou
nting
Acc
ounti
ng fo
r tr
ansa
ction
s•
Acc
ounti
ng fo
r ne
w lo
an a
nd lo
an
repa
ymen
t (2
3)•
Recl
assi
fy p
ortio
n of
liab
ility
pay
able
w
ithi
n th
e ne
xt fi
nanc
ial y
ear
as c
urre
nt
liabi
lity
• A
ccou
nting
for
inte
rest
exp
ense
and
in
tere
st e
xpen
se p
ayab
le (2
4)
Pres
enta
tion
• Pr
esen
tatio
n of
long
-ter
m b
orro
win
gs,
inte
rest
exp
ense
and
inte
rest
pay
able
in
the
Stat
emen
t of
Fin
anci
al P
erfo
rman
ce
and
Stat
emen
t of
Fin
anci
al P
ositi
on
Acc
ounti
ng th
eori
es•
expl
ain
the
acco
untin
g of
long
-ter
m
borr
owin
gs in
tere
st e
xpen
se in
rel
ation
to
rele
vant
acc
ounti
ng th
eori
es
Acc
ounti
ng fo
r tr
ansa
ction
s •
disti
ngui
sh b
etw
een
bank
loan
and
ban
k ov
erdr
aft
• pr
epar
e th
e jo
urna
l ent
ries
on
new
loan
, lo
an r
epay
men
t, in
tere
st e
xpen
se a
nd
inte
rest
pay
able
• pr
epar
e an
d in
terp
ret
the
long
-ter
m
borr
owin
gs le
dger
acc
ount
• in
terp
ret
the
inte
rest
exp
ense
ledg
er
acco
unts
wit
h ad
just
men
t fo
r in
tere
st
expe
nse
paya
ble
98
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:N
otes
(23)
The
finan
cial
yea
r en
d fo
r sc
enar
ios
that
incl
ude
the
taki
ng u
p of
long
-te
rm b
orro
win
g w
ill a
lway
s en
d on
31 D
ecem
ber.
The
obta
inin
g of
loan
s,re
paym
ent
of lo
ans
and
inte
rest
pai
dca
n ta
ke p
lace
at
any
time
duri
ng th
efin
anci
al y
ear.
Loan
s ar
e as
sum
ed to
be r
epai
d in
equ
al in
stal
men
ts o
ver
the
loan
tenu
re. T
his
sylla
bus
does
not
incl
ude
loan
s bo
rrow
ed o
n a
shor
t-te
rmba
sis.
(24)
Excl
udes
the
calc
ulati
on o
f int
eres
tex
pens
e.
Pres
enta
tion
•pr
epar
e an
ext
ract
of t
he S
tate
men
tof
Fin
anci
al P
ositi
on a
nd S
tate
men
tof
Fin
anci
al P
erfo
rman
ce s
how
ing
the
pres
enta
tion
of lo
an, i
nter
est
paya
ble
and
inte
rest
exp
ense
2.9
Equi
ties
This
sec
tion
look
s in
to th
e eq
uity
item
s of
a s
ole
prop
riet
orsh
ip in
a S
tate
men
t of
Fin
anci
al P
ositi
on, a
nd th
e ad
just
men
ts to
be
mad
e to
th
ese
item
s at
the
end
of a
fina
ncia
l per
iod.
2.9.
1 Ca
pita
l
1) H
ow is
the
sole
prop
riet
or’s
inte
rest
in th
e bu
sine
sspr
esen
ted
in fi
nanc
ial
stat
emen
ts?
Cont
extu
alSo
le p
ropr
ieto
rshi
pA
ccou
nting
theo
ries
•A
ccou
nting
enti
ty th
eory
Acc
ounti
ng fo
r tr
ansa
ction
s•
Acc
ounti
ng fo
r tr
ansa
ction
s aff
ectin
g th
eso
le p
ropr
ieto
r’s
inte
rest
(ow
ner’
s eq
uity
)(2
5)
Acc
ounti
ng th
eori
es•
expl
ain
the
acco
untin
g of
cap
ital
inre
latio
n to
rel
evan
t ac
coun
ting
theo
ries
99
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:Co
ncep
tual
•
Am
ount
s re
port
ed
are
as a
t a
poin
t in
tim
e •
Acc
ounti
ng e
ntity
th
eory
Proc
edur
alRe
cord
tran
sacti
ons
rela
ted
to th
e so
le
prop
riet
or’s
inte
rest
in
the
jour
nal,
ledg
er
acco
unts
and
fina
ncia
l st
atem
ents
Pres
enta
tion
• Pr
esen
tatio
n of
cap
ital
in th
e St
atem
ent
of F
inan
cial
Pos
ition
Not
e(2
5) S
cena
rios
to in
clud
e on
ly c
ontr
ibuti
on
of c
apita
l in
cash
or
in k
ind
Acc
ounti
ng fo
r tr
ansa
ction
s•
prep
are
the
jour
nal e
ntri
es o
n ca
pita
l co
ntri
bute
d
• pr
epar
e th
e ca
pita
l led
ger
acco
unt
• in
terp
ret
the
capi
tal l
edge
r ac
coun
t
• an
alys
e th
e ch
ange
s in
the
owne
r’s
equi
ty
to id
entif
y th
e re
ason
s fo
r th
e ch
ange
s
Pres
enta
tion
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on s
how
ing
the
pres
enta
tion
of th
e so
le p
ropr
ieto
rshi
p’s
inte
rest
in th
e bu
sine
ss
2.9.
2 D
raw
ings
1) H
ow d
o bu
sine
sses
re
cord
wit
hdra
wal
s by
sol
e pr
opri
etor
s?
Cont
extu
alO
wne
r w
ithd
raw
s as
sets
from
bus
ines
s fo
r ow
n us
e
Conc
eptu
al
• A
mou
nts
repo
rted
ar
e as
at
a po
int
in
time
• A
ccou
nting
enti
ty
theo
ry
Acc
ounti
ng th
eori
es•
Acc
ounti
ng e
ntity
theo
ry
Acc
ounti
ng fo
r tr
ansa
ction
s•
Dra
win
gs in
cas
h or
in k
inds
wou
ld r
e-du
ce th
e so
le p
ropr
ieto
rshi
p eq
uity
in th
e St
atem
ent
of F
inan
cial
Pos
ition
• Cl
osin
g of
the
draw
ings
ledg
er a
ccou
nt to
th
e ca
pita
l led
ger
acco
unt
at th
e en
d of
th
e fin
anci
al y
ear
Acc
ounti
ng th
eori
es•
expl
ain
the
acco
untin
g of
dra
win
gs in
re
latio
n to
rel
evan
t ac
coun
ting
theo
ries
Acc
ounti
ng fo
r tr
ansa
ction
s•
defin
e dr
awin
gs
• pr
epar
e th
e jo
urna
l ent
ries
rel
ated
to
draw
ings
and
the
tran
sfer
of d
raw
ings
to
the
capi
tal a
ccou
nt
100
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:Pr
oced
ural
Reco
rd tr
ansa
ction
s re
late
d to
dra
win
gs
in th
e jo
urna
l, le
dger
ac
coun
ts a
nd fi
nanc
ial
stat
emen
ts
Pres
enta
tion
• Pr
esen
tatio
n of
dra
win
gs in
the
capi
tal
acco
unt
• pr
epar
e th
e dr
awin
gs le
dger
acc
ount
• in
terp
ret
the
draw
ings
ledg
er a
ccou
nt
• an
alys
e th
e im
pact
of d
raw
ings
on
the
sole
pro
prie
tor’
s eq
uity
Pres
enta
tion
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on s
how
ing
the
pres
enta
tion
of c
apit
al le
ss d
raw
ings
as
a si
ngle
line
item
2.9.
3 Tr
ansf
er o
f pro
fit/l
oss
for
the
year
How
do
sole
pro
prie
tors
re
cord
the
tran
sfer
of
profi
t fo
r th
e pe
riod
to
the
capi
tal a
ccou
nt?
Cont
extu
al•
Tran
sfer
of p
rofit
s
Conc
eptu
al•
Am
ount
s re
port
ed a
s at
a p
oint
in ti
me
Proc
edur
alRe
cord
tran
sfer
of p
rof-
it in
the
jour
nal,
ledg
er
acco
unts
and
fina
ncia
l st
atem
ents
Acc
ounti
ng fo
r tr
ansa
ction
s•
Sole
pro
prie
tors
hip
- pr
ofit/
loss
for
the
peri
od is
add
ed/
dedu
cted
to/f
rom
the
capi
tal
- tr
ansf
er o
f pro
fit/l
oss
for
the
year
to
the
sole
pro
prie
tor’
s ca
pita
l led
ger
acco
unt
at th
e en
d of
the
finan
cial
yea
r Pr
esen
tatio
n•
Pres
enta
tion
of th
e so
le p
ropr
ieto
r’s
capi
tal a
ccou
nt (a
fter
add
ing
or d
educ
ting
profi
t or
loss
for
the
peri
od) i
n th
e st
atem
ent
of F
inan
cial
Pos
ition
Acc
ounti
ng fo
r tr
ansa
ction
s•
prep
are
the
jour
nal e
ntri
es o
n th
e tr
ansf
er o
f pro
fit/l
oss
for
the
year
to th
e so
le p
ropr
ieto
r’s
capi
tal a
ccou
nt
• pr
epar
e th
e ca
pita
l led
ger
acco
unt
show
ing
the
tran
sfer
of p
rofit
/los
s
• an
alys
e th
e im
pact
of p
rofit
/los
s on
the
owne
r’s
equi
ty
Pres
enta
tion
• pr
epar
e an
ext
ract
of t
he S
tate
men
t of
Fin
anci
al P
ositi
on s
how
ing
the
pres
enta
tion
of c
apit
al a
fter
adj
ustin
g fo
r dr
awin
gs a
nd p
rofit
/los
s fo
r th
e ye
ar a
s a
sing
le li
ne it
em
101
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:
2.10
Cor
recti
on o
f err
ors
1) H
ow d
o er
rors
occ
ur?
2) H
ow d
o er
rors
aff
ect
the
acco
unts
?
Conc
eptu
al
Dou
ble
entr
y•
Corr
ectio
n of
err
ors
not
reve
aled
by
the
Tria
l Bal
ance
• A
djus
ted
Tria
l Bal
ance
aft
er c
orre
ction
of
erro
rs (2
6)
Not
e(2
6) T
his
incl
udes
onl
y on
e fin
anci
al p
erio
d;
erro
rs r
evea
led
by a
Tri
al B
alan
ce a
re
not
requ
ired
• ex
plai
n ho
w e
rror
s no
t re
veal
ed b
y a
Tria
l Ba
lanc
e ha
ppen
• pr
epar
e th
e jo
urna
l ent
ries
to c
orre
ct
erro
rs
• an
alys
e th
e eff
ects
of e
rror
s on
pro
fit/
loss
for
the
peri
od a
nd o
n ite
ms
in th
e St
atem
ent
of F
inan
cial
Pos
ition
• an
alys
e th
e eff
ects
of c
orre
ction
of e
rror
s on
pro
fit/l
oss
for
the
peri
od a
nd in
item
s on
the
Stat
emen
t of
Fin
anci
al P
ositi
on
• pr
epar
e an
adj
uste
d Tr
ial B
alan
ce a
fter
co
rrec
tion
of e
rror
s
102
Key
Und
erst
andi
ng 3
: Acc
ounti
ng is
an
info
rmati
on s
yste
m t
o m
easu
re b
usin
ess
acti
viti
es
The
acco
untin
g in
form
ation
sys
tem
mea
sure
s bu
sine
ss a
ctivi
ties
by id
entif
ying
, rec
ordi
ng, a
naly
sing
and
rep
ortin
g ac
coun
ting
info
rmati
on.
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:
3.1
Acc
ounti
ng t
heor
ies
1) W
hat
are
the
acco
untin
g th
eori
es?
2) H
ow d
o th
ey a
ffec
t th
e pr
epar
ation
an
d pr
esen
tatio
n of
acc
ounti
ng
info
rmati
on?
Conc
eptu
al
Acc
ounti
ng th
eori
es•
Acc
ounti
ng th
eori
es a
nd th
eir
impl
icati
ons
for
the
prep
arati
on a
nd
pres
enta
tion
of S
tate
men
t of
Fin
anci
al
Posi
tion
and
Stat
emen
t of
Fin
anci
al
Perf
orm
ance
•
The
acco
untin
g th
eori
es a
re:
(i)
acco
untin
g en
tity
(ii)
goin
g co
ncer
n(ii
i) m
onet
ary
(iv)
acco
untin
g pe
riod
(v)
accr
ual b
asis
of a
ccou
nting
(vi)
obje
ctivi
ty(v
ii)
hist
oric
al c
ost
(viii
) co
nsis
tenc
y(ix
) m
ater
ialit
y (x
) pr
uden
ce(x
i) re
venu
e re
cogn
ition
(xii)
m
atch
ing
• Th
e ac
coun
ting
theo
ries
app
licab
le to
the
finan
cial
ele
men
ts a
re m
ainl
y la
id o
ut in
Ke
y U
nder
stan
ding
2
• de
fine
each
acc
ounti
ng th
eory
• id
entif
y th
e ac
coun
ting
theo
ry a
pplie
d in
a
give
n sc
enar
io
• ex
plai
n ho
w e
ach
acco
untin
g th
eory
aff
ects
the
prep
arati
on a
nd p
rese
ntati
on
of fi
nanc
ial s
tate
men
ts
103
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:
3.2
Acc
ounti
ng in
form
ation
sys
tem
and
acc
ounti
ng c
ycle
1) W
hat
is th
e ac
coun
ting
cycl
e?
2) W
hat
is th
e ac
coun
ting
info
rmati
on s
yste
m?
3) H
ow a
re b
usin
esse
s an
d ac
coun
ting
tran
sacti
ons
proc
esse
d?
4) W
hy a
re s
ourc
e do
cum
ents
im
port
ant?
5) W
hat
are
the
sour
ce
docu
men
ts?
6) W
hat
are
jour
nal a
nd
ledg
ers?
7) W
hat
is r
ecor
ded
in th
e jo
urna
l and
le
dger
s?
8) W
hat
is a
Tri
al
Bala
nce?
Cont
extu
al
• Bu
sine
ss tr
ansa
ction
s•
Impa
ct o
f tec
hnol
ogy
on a
ccou
nting
Conc
eptu
al•
Acc
ounti
ng
info
rmati
on s
yste
m•
Rele
vant
acc
ounti
ng
theo
ries
• Th
e ac
coun
ting
cycl
e is
the
proc
essi
ng
of a
ccou
nting
tran
sacti
ons
thro
ugh
the
acco
untin
g in
form
ation
sys
tem
. The
st
ages
of a
ccou
nting
cyc
le a
re
(i)
ide
ntify
ing
and
reco
rdin
g(ii
) ad
justi
ng(ii
i) re
porti
ng(iv
) cl
osin
g•
The
clos
ing
of a
ccou
nts
is o
nly
done
at
the
end
of a
fina
ncia
l yea
r•
A c
ompu
teri
sed
acco
untin
g in
form
ation
sy
stem
gen
eral
ly c
ompr
ises
the
follo
win
g:
(i)
sour
ce d
ocum
ents
(ii)
jour
nal
(iii)
ledg
ers
(iv)
Tria
l Bal
ance
(v
) St
atem
ent
of F
inan
cial
Per
form
ance
(v
i) St
atem
ent
of F
inan
cial
Pos
ition
Sour
ce d
ocum
ents
• Pu
rpos
es o
f sou
rce
docu
men
ts
• Is
sue
and
rece
ipt
of d
ocum
ents
in
rela
tion
to s
elle
r/pr
ovid
er a
nd b
uyer
/co
nsum
er o
f goo
ds/s
ervi
ces
(27)
• Ty
pes
of tr
ansa
ction
s an
d th
eir
sour
ce
docu
men
ts:
• st
ate
the
orde
r in
whi
ch e
ach
type
of
tran
sacti
on is
pro
cess
ed th
roug
h th
e ac
coun
ting
info
rmati
on s
yste
m
• ex
plai
n ho
w e
ach
type
of t
rans
actio
n is
pro
cess
ed th
roug
h th
e ac
coun
ting
info
rmati
on s
yste
m.
• st
ate
the
purp
oses
of s
ourc
e do
cum
ents
• st
ate
the
purp
ose
of e
ach
type
of s
ourc
e do
cum
ent
• st
ate
the
sour
ce d
ocum
ents
use
d in
the
tran
sacti
on
• ex
plai
n th
e pu
rpos
e of
the
Tria
l Bal
ance
• ex
plai
n th
e lim
itati
on o
f the
Tri
al B
alan
ce
• pr
epar
e a
Tria
l Bal
ance
104
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:9)
Why
is th
e Tr
ial
Bala
nce
not
an
abso
lute
pro
of o
f ac
cura
cy?
- ca
sh p
urch
ases
and
sal
es: r
ecei
pts
- cr
edit
pur
chas
es a
nd s
ales
: inv
oice
s -
rece
ipt
of m
oney
: re
mitt
ance
adv
ice
(cre
dit
cust
omer
), re
ceip
t, b
ank
stat
emen
t-
paym
ent
of m
oney
: pay
men
t vo
uche
r, re
ceip
t, b
ank
stat
emen
t-
over
char
ges
and
retu
rns
of in
vent
ory:
cr
edit
not
es
- un
derc
harg
es: d
ebit
not
es
Jour
nal
• Re
pres
enta
tion
of tr
ansa
ction
s in
the
jour
nal
Ledg
er a
ccou
nt•
Repr
esen
tatio
n of
tran
sacti
ons
in le
dger
ac
coun
ts
Tria
l Bal
ance
• Fo
rmat
of a
Tri
al B
alan
ce•
Faci
litat
es th
e pr
epar
ation
of fi
nanc
ial
stat
emen
ts a
nd c
an a
lso
be u
sed
as a
ch
eck
on a
rith
meti
c ac
cura
cy•
Lim
itati
on a
s an
abs
olut
e pr
oof o
f ac
cura
cyN
ote
(27)
Exc
lude
s de
tails
abo
ut th
e co
nten
t of
so
urce
doc
umen
ts
105
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:
3.3
Und
erst
andi
ng t
he d
oubl
e-en
try
reco
rdin
g sy
stem
1) H
ow a
re b
usin
ess
activ
ities
rec
orde
d in
th
e ac
coun
ting
info
r -m
ation
sys
tem
?
Conc
eptu
al
Dou
ble-
entr
y re
cord
ing
syst
em
Proc
edur
alRe
cord
tran
sacti
ons
in
the
jour
nal a
nd le
dger
ac
coun
ts
Met
hod
of r
ecor
ding
• D
oubl
e-en
try
reco
rdin
g m
etho
d an
d ru
les
Jour
nal e
ntri
es•
Prep
arati
on o
f jou
rnal
ent
ries
Ledg
er a
ccou
nts
• Pr
epar
ation
of l
edge
r ac
coun
ts•
Posti
ng o
f jou
rnal
ent
ries
to le
dger
ac
coun
ts (2
8)•
Ana
lysi
ng th
e eff
ects
of t
rans
actio
ns o
n le
dger
bal
ance
s•
Und
erst
andi
ng th
at th
e be
ginn
ing
and
endi
ng le
dger
bal
ance
s re
pres
ent
the
cum
ulati
ve v
alue
s to
dat
e •
Clos
ing
of a
ll in
com
e an
d ex
pens
es
to a
n in
com
e su
mm
ary
acco
unt
(an
inte
rmed
iate
acc
ount
dur
ing
clos
ing
phas
e), w
hich
is th
en c
lose
d to
the
capi
tal
acco
unt
(for
sol
e pr
opri
etor
ship
s) (2
8)•
Clos
ing
of th
e dr
awin
gs a
ccou
nt to
the
capi
tal a
ccou
nt fo
r so
le p
ropr
ieto
rshi
ps
(29)
Not
es(2
8) E
xclu
des
the
posti
ng o
f acc
ounti
ng
adju
stm
ents
from
the
jour
nal t
o le
dger
s
(29)
Clo
sing
of i
ncom
e an
d ex
pens
es
acco
unts
and
dra
win
gs w
ill o
nly
be
done
at
the
end
of th
e fin
anci
al y
ear.
• st
ate
the
ledg
er a
ccou
nts
to b
e de
bite
d an
d cr
edite
d
• pr
epar
e th
e jo
urna
l ent
ries
• pr
epar
e th
e le
dger
acc
ount
s
• in
terp
ret
the
tran
sacti
ons
reco
rded
and
th
e ba
lanc
es in
the
ledg
er a
ccou
nts
106
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:
3.4
Inte
rnal
con
trol
s
1) W
hat
are
inte
rnal
co
ntro
ls?
2) W
hy a
re in
tern
al c
on-
trol
s im
port
ant?
3) W
hat
are
the
inte
rnal
co
ntro
ls o
ver
cash
?
Cont
extu
al•
How
bus
ines
ses
man
-ag
e ca
sh•
Safe
guar
ding
cas
h
Conc
eptu
alIn
tern
al c
ontr
ols
and
inte
rnal
con
trol
s ov
er
cash
Proc
edur
alPr
epar
ation
of b
ank
reco
ncili
ation
sta
te-
men
t
• Pu
rpos
e of
inte
rnal
con
trol
s-
safe
guar
d as
sets
of t
he b
usin
ess
- en
sure
bus
ines
s tr
ansa
ction
s ar
e re
-co
rded
acc
urat
ely
- co
mpl
y w
ith
law
s an
d re
gula
tions
• In
tern
al c
ontr
ols
to s
afeg
uard
cas
h by
ha
ving
con
trol
s ov
er:
- ca
sh in
han
d-
cash
at
bank
- ca
sh in
tran
sit
- ca
sh r
ecei
pts
- ca
sh p
aym
ents
• In
tern
al c
ontr
ols
over
cas
h -
segr
egati
on o
f duti
es-
cust
ody
of c
ash
- au
thor
isati
on-
bank
rec
onci
liatio
n •
Purp
ose
of p
repa
ring
ban
k re
conc
iliati
on:
chec
k th
e ca
sh a
t ba
nk b
alan
ce o
f the
bu
sine
ss a
gain
st th
e ba
nk’s
rec
ord
as
show
n on
the
bank
sta
tem
ent
• Re
conc
iliati
on o
f diff
eren
ces
betw
een
the
busi
ness
cas
h at
ban
k ba
lanc
e an
d th
e ba
lanc
e in
the
bank
sta
tem
ent
(30)
• ex
plai
n th
e pu
rpos
e of
inte
rnal
con
trol
s
• ex
plai
n th
e w
ays
of in
tern
al c
ontr
ols
over
ca
sh in
han
d, c
ash
at b
ank,
cas
h in
tran
sit,
ca
sh r
ecei
pts
and
cash
pay
men
ts
• ex
plai
n th
e pu
rpos
e of
pre
pari
ng b
ank
reco
ncili
ation
• id
entif
y th
e di
ffer
ence
s be
twee
n th
e bu
sine
ss c
ash
at b
ank
bala
nce
and
the
bala
nce
in th
e ba
nk s
tate
men
t
• ex
plai
n th
e ca
uses
of d
iffer
ence
s be
twee
n th
e bu
sine
ss c
ash
at b
ank
bala
nce
and
the
bala
nce
in th
e ba
nk s
tate
men
t
• pr
epar
e an
adj
uste
d ca
sh a
t ba
nk le
dger
ac
coun
t
• pr
epar
e th
e ba
nk r
econ
cilia
tion
stat
emen
t
• an
alys
e th
e eff
ects
of a
djus
ting
for
the
diff
eren
ces
betw
een
the
cash
at
bank
ba
lanc
e an
d th
e ba
lanc
e in
the
bank
st
atem
ent
on c
ash
at b
ank
and
profi
t fo
r th
e pe
riod
107
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:•
Diff
eren
ces
are
due
to th
e tim
ing
of th
e tr
ansa
ction
s re
cord
ed b
y th
e bu
sine
ss
and
the
bank
, and
err
ors
in r
ecor
ding
• Ty
pes
of d
iffer
ence
s (3
1):
(i)
dire
ct d
epos
its
(ii)
dire
ct p
aym
ents
(ii
i) ch
eque
s no
t ye
t pr
esen
ted
(iv)
depo
sits
in tr
ansi
t
(v)
dish
onou
red
cheq
ues
(vi)
erro
rs m
ade
by th
e bu
sine
ss o
r th
e ba
nk•
Adj
ustin
g th
e ca
sh a
t ba
nk le
dger
acc
ount
•
Form
at o
f a b
ank
reco
ncili
ation
sta
tem
ent
Not
es(3
0) In
clud
es o
nly
the
follo
win
g sc
enar
ios:
(i)
sa
me
open
ing
bala
nce
betw
een
cash
at
bank
and
ban
k st
atem
ent
(ii)
diff
eren
t op
enin
g ba
lanc
e be
twee
n ca
sh a
t ba
nk a
nd b
ank
stat
emen
t,
and
the
diff
eren
ce is
lim
ited
to o
nly
one
tran
sacti
on(ii
i) op
enin
g ba
lanc
e in
cas
h at
ban
k an
d ba
nk s
tate
men
t ca
n be
eith
er a
po
sitiv
e ba
lanc
e or
a b
ank
over
draft
108
Gui
ding
Que
stion
sKn
owle
dge
Cont
ent
(Nor
mal
(Aca
dem
ic))
Lear
ning
Out
com
esSt
uden
ts w
ill b
e ab
le t
o:(iv
) end
ing
bala
nce
in c
ash
at b
ank
and
bank
sta
tem
ent
can
eith
er b
e a
posi
tive
bala
nce
or a
ban
k ov
erdr
aft(v
) ba
nk r
econ
cilia
tion
mus
t be
pe
rfor
med
by
com
pari
ng c
ash
at
bank
ledg
er a
ccou
nt a
nd a
ban
k st
atem
ent
(31)
Und
erst
andi
ng h
ow e
lect
roni
c ba
nk
tran
sacti
ons
(e.g
., cr
edit
tran
sfer
, st
andi
ng o
rder
) are
rec
orde
d in
the
acco
unts
of t
he b
usin
ess
is r
equi
red
but
desc
ripti
ons
of th
eir
proc
essi
ng a
re n
ot
requ
ired
SECTION 3:PEDAGOGY
• Pedagogical Practices
• Nature of Accounting Knowledge
• Strategies for Principles of Accounts
110
3. PEDAGOGY
Pedagogical Practices
The aim of the Principles of Accounts syllabuses is to develop in students the knowledge and skills to prepare, communicate and use both accounting information and non-accounting information to make decisions.
To nurture in students the desired qualities and dispositions of a Principles of Accounts learner, it is crucial to recognise that how they learn is as important as what they learn. The Singapore Curriculum Philosophy (SCP) espouses our beliefs about teaching, learning and assessment to effectively facilitate student learning. Teachers should actively draw reference from the SCP and the subjects’ Knowledge Bases (KB) related to teaching and learning of accounting, and translate them into a meaningful application of the Pedagogical Practices (PP) as spelt out in the Singapore Teaching Practice (STP).
The STP explicates a set of PP that connected to four fundamental teaching processes and the twenty-four Teaching Areas (TA) presented in Figure 3 below:
Pedagogical PracticesFigure 3: Pedagogical Practices
111
Nature of Accounting Knowledge
A common misconception is that accounting is all about mastering the procedures in preparing accounts. In fact, accounting knowledge comprises three layers: contextual, conceptual and procedural. Accounting represents business activities in numerical form. By themselves, accounting numbers have no meaning; the numbers are only meaningful when interpreted in the context of the business. As business activities are immense and multifarious, they need a systematic procedure of organising and recording accounting numbers. The accounting constructs used to represent and measure business activities form the bedrock of how accounting numbers are to be understood, conceptualised and interpreted.
Table 7 explains the three layers of accounting knowledge and suggests associated instructional approaches. Owing to the nature of accounting knowledge, a repertoire of strategies is deployed in the accounting classroom.
Table 7: Summary of accounting knowledge and suggested instructional approaches
Types of Accounting Knowledge Suggested Instructional Approaches
Contextual Knowledge
• the environment that accounting functions in
• business objectives and activities
• the larger business environment
Broad Objective
• Connecting what students learn in class with the real business world
Approaches
• Relating to students’ prior experiences by framing and evoking their encounters with businesses
• Developing relevant business knowledge by using authentic materials and through direct or indirect exposure to real businesses
112
Types of Accounting Knowledge Suggested Instructional Approaches
Conceptual Knowledge
• how theories and concepts are organised to represent and think about business economic activities
• how business economic activities are perceived
Broad Objectives
• Appreciating the way of representing and organising accounting knowledge
• Making meanings and connections
• Organising and modelling thinking
Approaches
• Using teaching models of expository, inquiry, self-discovery, etc.
• Explicating how experts think through and solve problems
• Monitoring how students form understanding
Procedural Knowledge
• accounting conventions and terminologies
• double-entry rule
Broad objectives:
• Attaining an acceptable level of proficiency in thinking and executing the double-entry method of recording,
• Attaining an acceptable level of thinking through how information flows through the accounting information system
Approach
To have a sound grasp of the procedures until they can read and interpret ledger accounts and financial statements:
• Mastery learning through modelling, stepped demonstrations of the procedures, and adequate guided and independent practices. Learning is to be carefully designed from simple to complex, and integrating previously taught procedures and principles.
113
Strategies for Principles of Accounts
Learning takes place individually and collaboratively, as students construct and co-construct meaning from knowledge and experiences. To provide students with a richer scope for acquiring decision-making skills, scenarios (mini-case studies) can be used in teaching and learning Principles of Accounts. The use of scenarios will complement and enrich the strategies of questioning, processing, connecting and reflecting for teaching decision-making in class.
Questioning, Processing, Connecting and Reflecting
According to Smith and Ragan (2005), teachers and students have specific roles to play, and work together to promote teaching and learning. Every instruction and activity that the teacher provides and initiates should be intentional and purposeful. Students are not only receiving instruction passively; they are also actively working on the learning materials, and linking them to prior learning. They are actively creating their knowledge and owning it. The teacher’s role is to facilitate and support students’ learning.
Adapted from Francis, Mulder and Stark (1995), the strategies of questioning, processing, connecting and reflecting are needed to bring about purposeful and engaged learning in class. Table 8 outlines these strategies.
Table 8: Summary of strategies in class
Strategy Purpose Student’s Role Teacher’s Role
Questioning • arouse interest• provide focus for
learning• prepare for learning• probe and develop
deep understanding
• initiate active questioning
• encourage questioning
• guide the discussion
Processing • process and practise• apply and
demonstrate learning
• accomplish learning outcomes
• demonstrate and guide
• create opportunities for students to deepen and demonstrate learning
• provide feedbackConnecting • gain deeper
understanding• see relevance of
learning in authentic contexts
• extract meaningful patterns
• discern purposes• detect key
conceptual threads• relate learning to
real world
• evoke, uncover and guide students to draw connections
Reflecting • initiate self-directed learning
• be conscious of thinking processes
• review and reflect on learning
• encourage, lead and guide
114
Questioning Questioning is a universal teaching strategy. It is used to arouse students’ interest, focus their learning, prepare them to acquire new concepts, and help them probe and develop a deeper understanding. Questioning assumes that teachers are interested in what students know and how they think, and that students are interested in what others know and how they think. Good questions help develop students’ thinking and correct their misconceptions.
ProcessingStudents need to process, practise and apply their learning to different contexts so as to gain a deeper understanding and develop competency. Processing is not about rote learning or memorising procedures. Through demonstration and modelling, the emphasis is on making clear the thinking behind the procedures – the whys and why nots – not completing the procedures themselves. During the process, feedback is provided.
ConnectingConnecting entails relating to students’ prior life experiences, or providing the necessary life experiences, so as to help students create personal meaning in what they are learning. In addition to achieving cognitive clarity and developing a schema of learning, connecting also involves relating learning to the real world so that learning is seen as part and parcel of living, or preparing for life and work.
ReflectingStudents who are reflective become conscious of their thinking and are better able to direct their efforts towards purposeful learning. Reflection promotes integration of learning. Students should be offered opportunities to discuss and defend what they have learned so that they can reflect on their mental models, discover their misconceptions and correct them. Engaging in such mental activities will increase cognitive flexibility and improve retention of information.
Using Scenarios in Teaching
Students gain a deeper understanding through working on a case study than reading a book or listening to lectures passively. Case studies were first introduced at business schools and their use has an established history.
A case is a story with a hidden message centred on making a decision or solving a problem. It is a story about a situation that an individual or a group has to resolve. It usually involves one of the following types of situations: a problem, a decision to be made, an evaluation to be made, or rules to be analysed and applied.
Cases could range from short and simple ones, such as news clips or news articles, to long and complex ones, such as those centred on a single business. They could be based on real-world events or fictitious but realistic situations. There is no limit to how case studies are to be used; they can be creatively adapted for teaching and learning in a variety of ways.
For the purposes of Principles of Accounts at the O and N(A) levels, scenarios (mini-case studies) can be used to provide context and scope for students to acquire decision-making skills. These scenarios could be real or fictitious, and involve situations where students are expected to evaluate choices and justify their decisions. Using such scenarios in teaching would help develop students’ decision-making skills.
115
Recommended Strategies for Each Key Understanding
Pedagogical knowledge is closely related to content knowledge for creating an effective and en-gaging learning environment. Figure 4 summarises how the suggested strategies could be used to deliver content knowledge in Principles of Accounts.
Key Understanding 1 (KU1):Accounting and non-accounting information are used to support and facilitate decision-
making.
Students learn to be users of accounting information.
Strategies• Using scenarios to activate learning and provide opportunities to acquire decision-making
skills• Using questioning, processing, connecting and reflecting to help understand the roles
of accounting and accountants, and how they need to be ethical in preparing and usingaccounting information for decision-making
Key Understanding 2 (KU2):Accounting is a language used to
represent business activities.
Key Understanding 3 (KU3): Accounting is an information system to
measure business activities.
Students learn to be preparers and communicators of accounting information.
Strategies• KU2: using questioning, processing, connecting and reflecting to help students understand
accounting concepts; using scenarios to help them see how both accounting and non-accounting information are used to make decisions
• KU3: using other strategies as using scenarios is not efficient or effective for understandingthe accounting information system
Figure 4: Suggested strategies to deliver content knowledge in Principles of Accounts
116
References
Francis, M. C., Mulder, T. C., & Stark, J. S. (1995). Intentional learning: A process for learning to learn in the accounting curriculum. Accounting Education Change Commission and American Accounting Association.
Smith, G. (1987). The use and effectiveness of the case study method in management education – A critical review. Management Learning, 18, 51-61.
Smith, P. L., & Ragan, T. J. (2005). Instructional design (3rd ed.). Hoboken, NJ: John Wiley & Sons.
Weil, S., Oyelere, P., Yeoh, J., & Firer, C. (2001). A study of students’ perceptions of the usefulness of case studies for the development of finance and accounting-related skills and knowledge. Ac-counting Education, 10(2), 123-146
SECTION 4:ASSESSMENT
• Purpose
• Assessment Objectives
• Assessment Specification Grid
• Scheme of Assessment
118
4. ASSESSMENT
Purpose
Assessment is the process of gathering and analysing evidence about students’ learning and development for making appropriate instructional decisions and enhancing learning. Assessment plays an integral role in teaching and learning Principles of Accounts. This belief coheres with the SCP which envisions that learning flourishes when assessment is used to address students’ learning gaps and helps students become self-directed learners. It is thus essential for assessment to begin with a clear purpose: to facilitate meaningful learning and support students in developing 21st century competencies.
Formative assessment, or assessment for learning, takes place during teaching and aims to help students improve their learning. It provides teachers with information on their students’ progress and valuable feedback on the effectiveness of their lessons. Using this information, teachers scaffold lessons to ensure progression in their students’ learning. Assessment for learning can also help students develop positive habits of, and skills related to, reflection and self-directed learning through peer and self-assessment.
Summative assessment, or assessment of learning, takes place at the end of a unit or term for the purpose of giving information on students’ mastery of knowledge and skills, assigning grades or certifying student proficiency. It plays a critical role in assessing students’ knowledge and understanding of the subject. It yields information on mastery and attainment, and provides a means to determine the ability of students to progress to the next level.
119
Assessment Objectives
AO1: Knowledge and Comprehension
Identify and comprehend accounting knowledge appropriate to the syllabus.
AO2: Application
Select and apply accounting knowledge to various accounting situation.
AO3: Analysis and Synthesis
Analyse, interpret, organise and synthesise accounting information.
AO4: Evaluation
Interpret and evaluate accounting information to make judgements and recommendations.
Assessment Specification Grid
The following weighting of the assessment objectives gives an indication of their relative importance. They are not intended to provide a precise allocation of marks to each assessment objective.
Table 9: Assessment Specification Grid
Ordinary-Level
AO 1Knowledge and Comprehension
AO2Application
AO3Analysis and
SynthesisAO4
Evaluation Total
Paper 1 15% 10% 10% 5% 40%
Paper 2 10% 15% 20% 15% 60%
Total 25% 25% 30% 20% 100%
Normal (Academic)-
level
AO 1Knowledge and Comprehension
AO2Application
AO3Analysis and
SynthesisAO4
Evaluation Total
Paper 1 20% 15% 5% 0% 40%
Paper 2 10% 25% 20% 5% 60%
Total 30% 40% 25% 5% 100%
120
Scheme of Assessment
There are two compulsory papers.
Table 10: Scheme of Assessment for Ordinary-level
O-level Details Weighting Duration
Paper 1 Answer three to four compulsory structured questions (40 marks) 40% 1 hour
Paper 2
Answer four compulsory structured questions. (60 marks)
• One question requires the preparationof financial statements for a business forone financial year (20 marks)
• A scenario-based question (7 marks) willbe part of one of the three remainingquestions
60% 2 hours
Table 11: Scheme of Assessment for Normal (Academic)-level
N(A)-level Details Weighting Duration
Paper 1 Answer three to four compulsory structured questions (40 marks) 40% 1 hour
Paper 2
Answer four compulsory structured questions (60 marks)
• One question requires the preparationof financial statements for a business forone financial year (20 marks)
• A scenario-based question (5 marks) willbe part of one of the three remainingquestions
60% 2 hours
Scenario-based Question
The scenario-based question requires students to make a decision between two possible choices in the context of a fictitious business. Each scenario will include both accounting and non-accounting information that students are expected to use to support their decision.
121
LIST OF FORMULAE APPENDIX A
Profitability Ratios
(i) Gross profit margin (%) = Gross profit × 100Net sales revenue
(ii) Mark-up on cost (%) = Gross profit × 100Cost of sales
(iii) Profit margin (%) = Profit for the period × 100Net sales revenue
(iv) Return on equity (%) = Profit for the period × 100Average equity
Average equity = (Total equity at the beginning of the financial period + Total equity at the end of the financial period) / 2
For a sole proprietor, total equity is the owner’s equity, which comprises the capital amount after profit/loss and drawings.
For a private limited company, total equity is the shareholders’ equity, which comprises share capital and retained earnings.
Liquidity Ratios(i) Working capital = Total current assets − Total current liabilities
(ii) Current ratio = Total current assetsTotal current liabilities
(iii) Quick ratio = Total current assets − inventory − prepaymentsTotal current liabilities
122
Efficiency Ratios
(i) Rate of inventory turnover (times)
= Cost of sales
Average inventoryAverage inventory = (Inventory at the beginning of the financial period + Inventory at the end of the financial period) / 2
(ii) Days sales in inventory (days) =Average inventory
Cost of sales× 365 days
(iii) Trade receivables collection period (days)
=Average net trade receivablesNet credit sales / service fee
revenue× 365 days
Average net trade receivables = (Net trade receivables at the beginning of the financial period + Net trade receivables at the end of the financial period) / 2
(iv) Rate of trade receivables turn-over (times)
=Net credit sales / service fee revenue
Average net trade receivables
Others
(i) Rate of depreciation for straight-line method (%)
=Yearly depreciation
Original cost − Scrap value× 100
(ii) Owner’s Equity = Total assets − Total liabilities
(iii) Net sales revenue (for trading business)
= Sales revenue − Sales returns
(iv) Cost of purchases =Purchase price − Returns + Expenses on purchases
123
FORMATS OF FINANCIAL STATEMENTS APPENDIX B
1 Statement of Financial Performance
(A) Trading business
Name of BusinessStatement of Financial Performance for the year ended…
$ $Sales revenue xxxxless: Sales returns xxxxNet sales revenue xxxxless: Cost of sales xxxxGross profit xxxxOther incomeCommission income xxxxDiscount received xxxxGain on sale of non-current assets1 xxxxRent income xxxx xxxx
less: Other expenses 3
Impairment loss on trade receivables xxxxDepreciation of fixtures and fittings2 xxxxDepreciation of office equipment2 xxxxDepreciation of motor vehicles2 xxxxInterest xxxxInsurance xxxxLoss on sale of non-current assets1 xxxxMotor vehicle expenses xxxxOffice expenses xxxxRent and rates xxxxWages and salaries xxxx xxxxProfit for the year xxxx
1 Either one of these items will appear if only one asset was sold during the year.2 The depreciation amounts may be aggregated and presented as one figure.3 It is not required to classify expenses by function.* The above statement does not show all the income and expense items covered in this syllabus.
124
(B) Service Business
Name of BusinessStatement of Financial Performance for the year ended…
$ $Service fee revenue xxxx
Other incomeCommission income xxxxDiscount received xxxxGain on sale of non-current assets1 xxxxRent income xxxx xxxx
less: Other expenses3
Impairment loss on trade receivables xxxxDepreciation of fixtures and fittings2 xxxxDepreciation of office equipment2 xxxxDepreciation of motor vehicles2 xxxxInterest xxxxInsurance xxxxLoss on sale of non-current assets1 xxxxMotor vehicle expenses xxxxOffice expenses xxxxRent and rates xxxxWages and salaries xxxx xxxxProfit for the year xxxx
1 Either one of these items will appear if only one asset was sold during the year.
2 The depreciation amounts may be aggregated and presented as one figure.
3 It is not required to classify expenses by function.
* The above statement does not show all the income and expense items covered in this syllabus.
125
2 Statement of Financial Position
(B) Sole Proprietorship
Name of BusinessStatement of Financial Position as at …
$ $ $AssetsNon-current assets Cost Accumulated
depreciationNet book
valueProperty xxxx xxxx xxxxFixtures and fittings xxxx xxxx xxxxOffice equipment xxxx xxxx xxxxMotor vehicles xxxx xxxx xxxx
xxxx
Current assetsInventory xxxxTrade receivables xxxxless: Allowance for impairment of trade receivables xxxx xxxxOther receivables/ prepaid expenses/ income receiv-ables
xxxx
Cash at bank xxxxCash in hand xxxx xxxxTotal assets xxxx
Equity and Liabilities
Owner’s equityCapital xxxx
Non-current liabilitiesLong-term borrowings xxxx
Current liabilitiesTrade payables xxxxExpenses payable/income received in advance xxxxCurrent portion of long-term borrowings xxxx xxxxTotal equity and liabilities xxxx
* It is not required to classify assets and liabilities by order of liquidity.
* The above statement does not show all the asset and liability items covered in this syllabus.
* Each line item represents a consolidation of assets or liabilities of a similar nature, e.g., computers, fax machines and printers have to be
consolidated and represented as office equipment.
126
(B) Private Limited Company
Name of BusinessStatement of Financial Position as at …
$ $ $AssetsNon-current assets Cost Accumulated
depreciationNet book
valueProperty xxxx xxxx xxxxFixtures and fittings xxxx xxxx xxxxOffice equipment xxxx xxxx xxxxMotor vehicles xxxx xxxx xxxx
xxxx
Current assetsInventory xxxxTrade receivables xxxxless: Allowance for impairment of trade receivables xxxx xxxxOther receivables/ prepaid expenses/ income receivables
xxxx
Cash at bank xxxxCash in hand xxxx xxxxTotal assets xxxx
Equity and Liabilities
Shareholders’ equityShare capital, xxx ordinary shares xxxxRetained earnings xxxx xxxx
Non-current liabilitiesLong-term borrowings xxxx
Current liabilitiesTrade payables xxxxExpenses payable/income received in advance xxxxCurrent portion of long-term borrowings xxxx xxxxTotal equity and liabilities xxxx
• The Singapore Companies Act has abolished par value shares and authorised share capital.
* It is not required to classify assets and liabilities by order of liquidity.
* The above statement does not show all the asset and liability items covered in this syllabus.
* Each line item represents a consolidation of assets or liabilities of a similar nature, e.g., computers, fax machines and printers have to be
consolidated and represented as office equipment.
127
Ledger Account
Cash at bank accountDr $ Cr $ Bal $
Mar 1 Balance b/d 5,100 Dr5 Tung 2,340 7,440 Dr8 Gordon 1,630 5,810 Dr
16 Sales revenue 7,300 13,110 Dr19 Inventory 4,110 9,000 Dr22 Rental 700 9,700 Dr26 Insurance 200 9,500 Dr
Apr 1 Balance b/d 9,500 Dr
128
NOTES
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NOTES
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NOTES