PEARSON EDEXCEL INTERNATIONAL GCSE (9 –1) ACCOUNTING

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ACCOUNTINGStudent BookJames HaighSheila Robinson with Frank WoodPEARSON EDEXCEL INTERNATIONAL GCSE (9–1)eBookincludedPearson Edexcel International GCSE (9–1) Accounting provides comprehensivecoverage of the specification and is designed to supply students with the bestpreparation possible for the examination: Written by highly experienced Accounting teachers and authorsContent is mapped to the specification to provide comprehensive coverageLearning is embedded with activities, revision and exam practice throughoutSignposted transferable skillsReviewed by a language specialist to ensure the book is written in a clearand accessible styleGlossary of key Accounting terminologyeBook includedAn Online Teacher Resource Pack (ISBN: 9780435191207) provides furtherplanning, teaching and assessment support.For Pearson Edexcel International GCSE (9–1) Accounting specification (4AC1)for first teaching 2017.Student BookISBN: 9780435188634PEARSON EDEXCEL INTERNATIONAL GCSE (9–1)eBookincludedECONOMICSStudent BookISBN: 9780435188641ACCOUNTING Student Book BUSINESSPEARSON EDEXCEL INTERNATIONAL GCSE (9 –1)PEARSON EDEXCEL INTERNATIONAL GCSE (9–1)PEARSON EDEXCEL INTERNATIONAL GCSE (9–1)ACCOUNTINGStudent Bookwww.pearsonglobalschools.comJames HaighSheila Robinson with Frank WoodTEACHER RESOURCE PACKAccountingCover NEW.indd 1-325/04/2018 09:57

Lesson guide 6: Ledger accounting and double entry bookkeeping Alignment with Student Book: Chapter 6 (pages 60–85) Resources: Student Book, mini-whiteboards or true or false cards, prepared questionsLearning objectivesBy the end of the lesson, students should be able to: explain the purpose of the nominal ledger, the receivables ledger and the payables ledger record transactions in the ledgers using the double entry principle.Possible misconceptions and barriers Students may record purchase and revenue of inventory as purchases and revenue, notinventory.Students may record the incorrect details in the t-account – not using the other entryaccount, i.e. not cash in the cash account.Students may have little prior knowledge of credit transactions.Specification alignment 2.3Starter activityAt the start of the lesson, hand out questions relating to Sections 6.1/6.2/6.3 in the StudentBook (pages 60–62); include a blank t-account for students to fill in headings and the lettersfor DEADCLIC for students to complete.Students to answer questions in a given time.DifferentiationOpportunity for support: Questions given could be very basic knowledge-based and couldclosely follow the text in the Student Book.Opportunity for challenge: Questions could consist of both closed and open questions to testknowledge and understanding.Main teaching activitiesActivity 11 Explain the rules of double entry and the accounting equation – students to make notes.2 Demonstrate the effect on the accounting equation of some simple transactions,students making notes.3 As a class, work through the worked examples in Section 6.7 (pages 64–68). Studentsshould complete the t-accounts, making notes on the rules as appropriate. The value ofthe transactions could be changed to ensure students do not simply copy work.Activity 21 Explain the concept of cash transactions.2 Whole class Q&A. Using Example 8 (pages 66–67), students could be asked in turn tostate one of the double entries for each transaction; enter the transaction on the boardfor students to copy. Pearson Education Ltd 2019. Copying permitted for purchasing institution only. This material is not copyright free.This material may have been altered from the original.

DifferentiationOpportunity for support: Students could be given prepared t-accounts.Activity 31 Explain the concept of credit transactions, purchases on credit and revenue on credit.2 Present, apply, review. Work through the worked example for purchases on credit(pages 68–69) on the board with the students, completing each transaction.3 Students to attempt, individually, the transactions for revenue on credit (pages 69–70) toapply their knowledge. Values could be changed to avoid copying of the textbooksolution.Activity 51 Explain the concept of purchases returns and revenue returns.2 Present, apply, review. Work through the example of purchase returns (pages 70–71) onthe board with the students, completing each transaction.DifferentiationOpportunity for support: Students could be given the Student Book to refer to whilecompleting the tasks.Opportunity for challenge: Students could be given additional, more complex examples, withsolutions for self-assessment.Activity 61 Explain the concept of expenses on credit.2 Students to complete an example like that on pages 71–72 of Student Book.Activity 71 In pairs, students are given a copy of Figure 6.17, pages 73–74, and asked to write downthe transactions that took place.2 Students to compare their answers with the correct solution.Activity 81 Explain the purpose and process of balancing off accounts in the ledger (pages 75–79).2 Students are given several t-accounts to balance off.DifferentiationOpportunity for support: Students could be given the solutions to self-check progress.Opportunity for challenge: Students could be given additional, more complex examples, withone or two transactions to enter before balancing off the accounts. Pearson Education Ltd 2019. Copying permitted for purchasing institution only. This material is not copyright free.This material may have been altered from the original.

Plenary1 Quick-fire true or false questions on content covered, using mini-whiteboards.2 Students to make notes from the checklist (page 82).HomeworkEnd of chapter questions 1, 2 and 4. Pearson Education Ltd 2019. Copying permitted for purchasing institution only. This material is not copyright free.This material may have been altered from the original.

Income Statement and Statement of Financial PositionLearning TipsIn an exam you might be asked to calculate the final accounts for a business. You willprobably be given a list of balances or a trial balance to use. You need to know thelayouts of these final accounts if you want to maximise your marks.Below we will use a trial balance. Always remember you will only use each figure once;the only exception is closing inventories. This appears in both financial statements.Remember the key headings for the different accounts.Trial Balance: Worked Example 1Dr Sales RevenueSales ReturnsInventories at1.1.16PurchasesPurchase age InwardsInsuranceBuildingsMotor VehiclesTrade ReceivablesBankCashTrade PayablesBank LoanCapitalDrawings12 36523 333355 467736533 00089 00025 00013 3308000500015 0002 50 000100 00043 00015 000500018 00025 00090 00025 8701 018 365Notes:Inventories 31.12.16Cr 878 0001 018 36515 000 Pearson Education Ltd 2019. Copying permitted for purchasing institution only. This material is not copyright free.This document may have been altered from the original.

Income Statement: Worked Example 1 minusequalsSales RevenueSales ReturnsNet RevenueAddAddminusequalsminusequalsCost of SalesOpening InventoriesPurchasesCarriage InPurchase ReturnsNet PurchasesClosing InventoriesCost of Goods Sold23 333355 46750007365376 43515 000361 435Gross ProfitLess ranceProfit for the Year 878 00012 365865 635504 20033 00089 00025 00013 330800015 000183 330320 870 Pearson Education Ltd 2019. Copying permitted for purchasing institution only. This material is not copyright free.This document may have been altered from the original.

Statement of Financial Position: Worked Example 1 Non-Current AssetsAddBuildings250 000AddMotor Vehicles100 000Equals350 000Current AssetsInventories15 000AddTrade Receivables43 000AddBank15 000AddCash5000Equals78 000Net Assets428 000AddLessEqualsEquity and LiabilitiesOpening EquityProfit for the YearDrawingsClosing Equity90 000320 87025 870385 000Non-Current LiabilitiesBank LoanCurrent LiabilitiesTrade Payables25 00018 000Total Equity and Liabilities18 000428 000 Pearson Education Ltd 2019. Copying permitted for purchasing institution only. This material is not copyright free.This document may have been altered from the original.

Trial Balance: Worked Example 2DrCr Sales RevenueAdministration344 50012 457Bank22 000Bank Loan15 000Buildings120 000CapitalCarriage Inwards105 000200Cash12 446Drawings17 500Electricity9500Fuel3000Insurance4300Inventories at 1.1.1617 345Motor Vehicles40 000Purchase ReturnsPurchasesRentSales Returns5527162 55947 8208999Trade PayablesTrade ReceivablesWages23 599750052 000515 626515 626Notes:Inventories 31.12.168000 Pearson Education Ltd 2019. Copying permitted for purchasing institution only. This material is not copyright free.This document may have been altered from the original.

Income Statement: Worked Example 2 Sales RevenueSales ReturnsNet RevenueCost of SalesOpening InventoriesPurchasesCarriage InPurchase ReturnsNet PurchasesClosing InventoriesCost of Goods Sold17 345162 559200(5527)174 577(8000)166 577Gross ProfitLess ranceProfit for the Year 344 5008999335 501168 92447 82052 000950012 45730004300129 07739 847 Pearson Education Ltd 2019. Copying permitted for purchasing institution only. This material is not copyright free.This document may have been altered from the original.

Statement of Financial Position: Worked Example 2 Non-Current AssetsBuildingsMotor VehiclesCurrent AssetsInventoriesTrade ReceivablesCash120 00040 000160 0008000750012 446Net AssetsEquity and LiabilitiesOpening EquityAdd Profit for the YearLess DrawingsClosing EquityTotal Equity and Liabilities27 946187 946105 00039 847(17 500)127 347Non-Current LiabilitiesBank LoanCurrent LiabilitiesTrade PayablesBank 15 00023 59922 00045 599187 946 Pearson Education Ltd 2019. Copying permitted for purchasing institution only. This material is not copyright free.This document may have been altered from the original.

Exam PracticePaper 2‘Recommend’Edexcel International GCSE 9-1Accounting Pearson Education Ltd 2019. Copying permitted for purchasing institution only. This material is not copyright free.This document may have been altered from the original.

Seeta is a retailer who buys and sells goods on credit. She hasbeen operating successfully for a number of years. She wishes toexpand her business. She has decided on two options – purchaseanother business or obtain additional external finance.Evaluate the use of accounting concepts in the preparation ofthe financial statements. (8) Pearson Education Ltd 2019. Copying permitted for purchasing institution only. This material is not copyright free.This document may have been altered from the original.

Mock student response (a) Using concepts makes the accounts more accurate andstakeholders can rely on the information. They can trust thefinancial statements and make decisions based on them. However, it is time-consuming and it will require professionalinput to correctly apply the concepts when preparing financialstatements. Seeta may not have the knowledge of accountingconcepts and so will have to employ somebody. This will costher money. The business entity concept ensures the affairs of thebusiness are treated separately from the personal affairs ofSeeta. Pearson Education Ltd 2019. Copying permitted for purchasing institution only. This material is not copyright free.This document may have been altered from the original.

Mock student response (a)What are the strengths and weaknesses of this answer? There is a good opening sentence which demonstratesknowledge of the benefits. Some attempt has been made todevelop understanding but it is limited. The limitations show both knowledge and understanding andprovide a much better development of the relevantaccounting principles. It would have been better to state thatshe ‘may’ have to employ somebody, as this is evaluativerather than assertive. The final point is not creditworthy as it does not answer thequestion set; a justified decision on the use of concepts isrequired. It is common to see answers that describe concepts. Pearson Education Ltd 2019. Copying permitted for purchasing institution only. This material is not copyright free.This document may have been altered from the original.

Mock student response (b) Accounting concepts provide a framework for preparingfinancial statements. They provide a systematic way ofpreparing financial statements which makes them free frombias and therefore they show a true and fair view of abusiness. Using concepts means that accounting processes arestandardised, as all businesses follow the same rules. Thismeans that different businesses’ financial statements can beaccurately compared and valid decisions made withconfidence. This will be beneficial to Seeta if she has tochoose the best business to purchase./CONTINUED Pearson Education Ltd 2019. Copying permitted for purchasing institution only. This material is not copyright free.This document may have been altered from the original.

Mock student response (b)/CONTINUED However, accounting concepts are open to differentinterpretations. For example, the concept of materiality maybe viewed differently and it may well depend on the size ofthe business revenue. What is materially significant for a smallbusiness might not be so for a business with a large turnover.Since different businesses may interpret concepts differently,it will make comparisons less reliable. In conclusion, I think the use of concepts is beneficial as itfollows standard and realistic methods when preparingfinancial statements and allows fairly accurate comparisonsbetween businesses to be made, despite difference in theirinterpretation. Pearson Education Ltd 2019. Copying permitted for purchasing institution only. This material is not copyright free.This document may have been altered from the original.

Mock student response (b)What are the strengths and weaknesses of this answer? The student demonstrates excellent knowledge andunderstanding. Explanations are well developed and in the context of thequestion – Seeta possibly purchasing another business andneeding to see the financial statements. Both benefits and limitations are considered. A well-supported judgement has been given, which again is inthe context of the question set, with the student clearlyjustifying in their conclusion that the use of concepts isbeneficial. Pearson Education Ltd 2019. Copying permitted for purchasing institution only. This material is not copyright free.This document may have been altered from the original.

Pearson Edexcel International GCSE (9–1) Accounting provides comprehensive coverage of the specifi cation and is designed to supply students with the best preparation possible for the examination: Written by highly experienced Accounting teachers and authors Content is mapped to the specifi cation to provide comprehensive coverage Learning is embedded with activities, revision .