NZQA Approved

Internal assessment resource Accounting 1.2B v3 for Achievement Standard 90977

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Internal assessment resource Accounting 1.2B v3 for Achievement Standard 90977

PAGE FOR TEACHER USE

Internal assessment resource – Accounting 1.2B

PAGE FOR TEACHER USE 

Internal assessment resource Accounting 1.2B v3 for Achievement Standard 90977

PAGE FOR STUDENT USE

Internal assessment resource Accounting 1.2B v3 for Achievement Standard 90977

PAGE FOR STUDENT USE

Internal assessment resource Accounting 1.2B v3 for Achievement Standard 90977

PAGE FOR TEACHER USE

 

 
 

Internal Assessment Resource

Accounting Level 1 

This resource supports assessment against: Achievement Standard 90977 version 3 Process financial transactions for a small entity

Resource title: Process Transactions for an Entity That Uses Cash Based Accounting

5 credits

This resource: Clarifies the requirements of the standard Supports good assessment practice Should be subjected to the school’s usual assessment quality assurance process Should be modified to make the context relevant to students in their school environment and ensure that submitted evidence is authentic

 
 

Date version published by Ministry of Education	February 2015 Version 3 To support internal assessment from 2015
Quality assurance status	These materials have been quality assured by NZQA. NZQA Approved number A-A-02-2015-90977-02-4347
Authenticity of evidence	Teachers must manage authenticity for any assessment from a public source, because students may have access to the assessment schedule or student exemplar material. Using this assessment resource without modification may mean that students’ work is not authentic. The teacher may need to change figures, measurements or data sources or set a different context or topic to be investigated or a different text to read or perform.

 

Internal Assessment Resource

Achievement Standard Accounting 90977: Process financial transactions for a small entity

Resource reference: Accounting 1.2B v3

Resource title: Process Transactions for an Entity That Uses Cash Based Accounting

Credits: 5

Teacher guidelines

The following guidelines are supplied to enable teachers to carry out valid and consistent assessment using this internal assessment resource.

Teachers need to be very familiar with the outcome being assessed by Achievement Standard Accounting 90977. The achievement criteria and the explanatory notes contain information, definitions, and requirements that are crucial when interpreting the standard and assessing students against it.

Context/setting

This activity provides a clearly structured framework for assessing whether a student’s skills and understanding meet the specified standard, suggestions for contexts, and an assessment schedule. Select a context that will engage your students and adapt the task as necessary.

The example used is a small business called Cassie’s Crafts. It can be easily adapted for any small business or farm, or a community or iwi organisation provided that the entity is registered for GST on the payments basis. If the entity chosen is a trading business, a periodic inventory system should be used.

In this activity students prepare cash journals, complete a bank reconciliation statement, and complete a set of general ledger accounts classified according to a chart of accounts, a trial balance, and source documents.

Transactions need to include:

• a variety of GST and non-GST transactions that require rounding when calculating GST, GST exclusive, or GST inclusive amounts
• two different income items
• electronic and cash transactions for different receipts on the same day
• a variety of payment methods (note that a cheque is not required)
• a variety of expenses, including purchases/supplies (GST and non-GST incurred)
• a purchase and a sale of an item of plant and equipment/asset
• raising or repaying long-term debt principal
• drawings and/or capital contribution, unless the entity is a community organisation.

All parts of the assessment must be undertaken without the use of extracts. Ensure that the accounting records include source documents (a tax invoice plus two others), cash receipts and cash payments journals (23 transactions across the two journals that include GST and non-GST transactions), a complete set of ledger accounts (minimum 18), a trial balance (minimum 18), and a bank reconciliation. If the bank reconciliation requires updating of journals, these entries may form part of the 23 entries.

Conditions

Students complete the task individually.

Formatting of spreadsheet cells to 2 decimal places must be done by the student.

Resource requirements

Students should have access to appropriate technology, for example, computer spreadsheets or calculators. Note that the use of accounting software is not permitted.

Additional information

None.

 

Internal Assessment Resource

Achievement Standard Accounting 90977: Process financial transactions for a small entity

Resource reference: Accounting 1.2B v3

Resource title: Process Transactions for an Entity That Uses Cash Based Accounting

Credits: 5

Achievement	Achievement with Merit	Achievement with Excellence
Process financial transactions for a small entity.	Process financial transactions in depth for a small entity.	Comprehensively process financial transactions for a small entity.

 

Student instructions

Introduction

This activity requires you to process financial transactions for a small cash-based business called Cassie’s Crafts. This shop sells craft supplies and provides night classes in scrapbooking. It is registered for GST on the payments basis and uses a periodic inventory system.

The thoroughness with which you process the financial transactions and the extent to which you adhere to good accounting practice will determine the overall grade.

You have <teacher to insert time frame here> in which to independently complete this assessment.

Note that the use of accounting software is not permitted.

Task

Process the following financial transactions for Cassie’s Crafts.

Teacher note: You will need to create and provide resources for the students to use. This includes creating a list of suitable transactions for the entity chosen.

• Use the information provided by your teacher to prepare cash journals for Cassie’s Crafts. All transactions include GST where appropriate. If using a spreadsheet, enter appropriate formulae and format the spreadsheet cells to 2 decimal places. Do not total your cash journals before doing the bank reconciliation.
• Use the information in Resource A to complete a bank reconciliation statement. This involves:
• updating and totalling the cash journals
• preparing a bank account in the general ledger using the opening balance provided and the bank column totals from your updated cash journals
• incorporating the additional information provided.

Submit these documents to your teacher.

• Use the information in Resource B to complete documents related to Cassie’s Crafts.
• Enter the opening balances from the trial balance dated <teacher to insert date here> into the relevant general ledger accounts.
• Use the cash journals to create a complete set of general ledger accounts classified according to a chart of accounts.
• Create a trial balance dated <teacher to insert date here>.

 

Resource A

Cassie looks at her online bank statement on <teacher to insert date>.  
She discovers:

• her online bank statement shows a balance of <teacher to insert closing bank statement balance>
• the following items are included in her online bank statement: <teacher to insert the following items; minimum is three

– bank fees $XX

– at least one electronic payment

– at least one electronic receipt.>

• the following items are not included in her online bank statement: <teacher to insert at least three items in total with at least one receipt and at least one payment item

– at least one receipt

– at least one payment item

– another item.>

 

Resource B

Teacher note: The source documents provided (tax invoice, credit note, and receipt) are samples. Update the student instructions as required and provide the transaction information necessary to enable students to complete these.

 

TAX INVOICE
<teacher to insert entity name and address/contact details>
GST Reg. Number 68 - 643 - 376				TAX INVOICE
Date				8191
To
Description		QTY	RATE	AMOUNT
Terms: Payment due on 20th of month following invoice date		SUBTOTAL
Bank details for direct credit:		PLUS GST
Kiwibank 38-8712-0876251.00		TOTAL

Teacher note: The tax invoice should show a credit transaction for at least two different items, with one being a multiple (such as 3 of X, 2.5 hours of X) purchased with GST-exclusive unit costs provided.

 

 
 

CREDIT NOTE

<teacher to insert contact details of entity>

 

Credit Note No. <teacher to insert>   GST No. <teacher to insert>

Date: __________________ 

 

Name:  _______________________________________

 

Address: _____________________________________

 

_____________________________________

 

Reason for Return:

____________________________________________________________________________

 

____________________________________________________________________________

 

Original Invoice No. ____________

 

Subtotal

 

GST

 

Total Credit     $

 
 

Teacher note: The credit note could show the return of one of the multiple items from the invoice.

RECEIPT

<teacher to insert contact details of entity>

 

GST No. <teacher to insert>     Receipt No. <teacher to insert> 

Date: _________________

 

Received from: ___________________________________________________

 

the sum of: ____________________________________________________

 
 

      $ :

      $ :

 

      $ :

for:

 
 

   

 

       

 
 

Signed by:

 

Teacher note: This could be a receipt for cash or a direct credit or a cheque for an appropriate transaction.

 

Assessment schedule: Accounting 90977 Process Transactions for an Entity That Uses Cash Based Accounting

Evidence/Judgements for Achievement	Evidence/Judgements for Achievement with Merit	Evidence/Judgements for Achievement with Excellence
The student has processed financial information. This means that the student has: entered transactions on the source document. The student has included key information needed to record the transaction in the accounting records of the business that issued them. The amount/total is shown (allowing for calculation errors) on the tax invoice and one other document. Minor errors are acceptable correctly entered the majority of transactions as line items in the cash journals, including the bank statement items from the bank reconciliation process correctly entered the majority of the opening balances in the general ledger accounts correctly posted the majority of entries in the correct columns of the general ledger accounts with the correct treatment in the balance column attempted the bank reconciliation process, with at least two items recorded in either the cash journals or on the bank reconciliations (without being incorrectly recorded in both) and attempted the bank account. The student may not have adhered to good accounting practice in any or all of these components and is not required to do so. For the award of Achievement, students do not need to complete the trial balance.	The student has processed financial information in depth. This means that the student has: entered transactions in detail on the source document. The student has included information needed to record the transaction in the accounting records of the business that issued them. The amount/total is shown (allowing for calculation errors) on the tax invoice and one other document. Minor errors are acceptable correctly entered the majority of transactions in the cash journals, including bank statement items from the bank reconciliation process and including the correct treatment of GST and non-GST. In addition: most of the opening balances are correctly entered in the general ledger accounts with consistent particulars most of the posting entries in the general ledger accounts are correct with appropriate particulars most of the general ledger accounts have correct account codes and balances transferred to the trial balance. In the bank reconciliation process most items have been entered correctly in the cash journals, bank account, and bank reconciliation statement. Items recorded on the bank reconciliation statement have been correctly treated. The student has generally followed good accounting practice. For example, the cash journals have been totalled, dates are consistent, and either the bank column of the cash receipts journal reflects line items on the bank statement OR the account names in the particulars or folio references for items extend to the sundry columns.	The student has processed comprehensive financial information. This means that the student has: accurately recorded on the source documents, capturing the information needed to process the transactions in the accounting records (for example, date, address, figures, account name, customer/supplier name). Note: Evidence must include a tax invoice (with the following areas to focus upon) and two other source documents. The tax invoice amount is correct or has an error in the calculation – where the amount is NOT greater than the correct amount. If the figure on the tax invoice is incorrectly calculated to an amount greater than the percentage of the deposit, this is an example of an error that would negatively impact on the returns for the firm. The firm would incur a financial loss as a consequence of the error as a lesser amount would be required for full payment. The invoice should not be greater than the required amount for the reasons given above in the tax invoice. In addition, the transactions, including the bank statement items from the bank reconciliation process, have been correctly entered as line items in the cash journals with GST treatment as consistent. In the bank reconciliation process all items have been entered correctly in the cash journals, bank account, and bank reconciliation statement (allowing for follow-through errors). The bank reconciliation statement bank account balance agrees with the general ledger bank account balance. The student has followed good accounting practice throughout. For example: the cash journals have been totalled dates are consistent the bank column of the cash receipts journal reflects line items on the bank statement relevant account names in the particulars for items extended to the sundry columns the opening balances are entered in the general ledger accounts with consistent particulars the general ledger accounts have valid account codes and balances transferred to the trial balance. Occasional minor errors or inconsistencies are acceptable throughout.

Final grades will be decided using professional judgement based on a holistic examination of the evidence provided against the criteria in the Achievement Standard.