Republic of Zambia THE SENIOR SECONDARY BUSINESS SUBJECTS SYLLABUS Published by the Curriculum Development Centre P.O. Box 50092 LUSAKA © Curriculum Development Centre, Lusaka 1998 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of the Curriculum Development Centre. TABLE OF CONTENTS PAGE Preface ........................................................................................................................................................................................................... Acknowledgement ........................................................................................................................................................................................ Introduction .................................................................................................................................................................................................. General Aims ............................................................................................................................................................................................... General Objectives ....................................................................................................................................................................................... Features of the Syllabus ............................................................................................................................................................................... i ii iii iv v vi COMMERCE GRADE 10 TOPICS 1. Production ............................................................................................................................................................................................... 2. Industry ................................................................................................................................................................................................... 3. Direct Services ........................................................................................................................................................................................ 4. Commerce .............................................................................................................................................................................................. 5. Home trade – Retail ............................................................................................................................................................................... 6. Home trade – Wholesale ........................................................................................................................................................................ 7. Buying on Credit .................................................................................................................................................................................... 8. Documents used in Home Trade ........................................................................................................................................................... 1 2 2 2 3 3 4 5 GRADE 11 TOPICS 9. Foreign trade .......................................................................................................................................................................................... 10. Organisation of Business Units – Private Sector ................................................................................................................................... 11. Organisation Business Units – Public Sector ........................................................................................................................................ 6 7 8 12. Stock Exchange .................................................................................................................................................................................. 13. Lusaka Stock Exchange ..................................................................................................................................................................... 14. Regulation of the Securities and Exchange Commission .................................................................................................................. 15. Banking .............................................................................................................................................................................................. 9 9 10 11 GRADE 12 TOPICS 16. Insurance .............................................................................................................................................................................................. 17. Communication .................................................................................................................................................................................... 18. Transport .............................................................................................................................................................................................. 19. Warehousing ........................................................................................................................................................................................ 20. Advertising ........................................................................................................................................................................................... 21. Finance of Business Units .................................................................................................................................................................... 13 14 16 17 17 18 PRINCIPLES OF ACCOUNTS GRADE 10 TOPICS 1. Introduction to Principles of Accounts ................................................................................................................................................ 2. Concepts and Principles ....................................................................................................................................................................... 3. Balance Sheet ....................................................................................................................................................................................... 4. Business Transactions .......................................................................................................................................................................... 5. Double Entry ......................................................................................................................................................................................... 6. Ledger ................................................................................................................................................................................................... 7. Trial Balance ........................................................................................................................................................................................ 8. Books of Prime or Original Entry or Subsidiary Books ...................................................................................................................... 9. Final Accounts ..................................................................................................................................................................................... 20 20 21 21 22 22 23 23 24 GRADE 11 TOPICS 10. Adjustment to Final Accounts – Depreciation................................................................................................................................ 11. Adjustment to Final Accounts – Accruals and Prepayments .......................................................................................................... 12. Adjustment to Final Accounts – Bad debts, provision for bad and doubtful debts and discount allowed ..................................... 13. Limitations of the Trial Balance ..................................................................................................................................................... 14. Bank Reconciliations ...................................................................................................................................................................... 15. Control Accounts ............................................................................................................................................................................ 16. Accounts of Non-profit Making Organisations ............................................................................................................................... 17. Capital and Revenue Expenditure and Income ................................................................................................................................ 25 25 26 26 27 28 28 29 GRADE 12 TOPICS 18. Incomplete or Single Entry .............................................................................................................................................................. 19. Partnership Accounts ........................................................................................................................................................................ 20. Manufacturing Accounts .................................................................................................................................................................. 21. Accounts of Limited Liability or Joint Stock Companies ............................................................................................................... 22. Departmental Accounts ................................................................................................................................................................... 23. Inter-pretation of Final Accounts and Balance Sheet ...................................................................................................................... 30 31 32 32 33 33 PREFACE The subjects involved are Commerce and Principles of Accounts. The syllabus took into consideration the need to include Topics on the Lusaka Stock Exchange and Exchange Commission to enable pupils learn about their own stock exchange. The syllabus emphasizes the importance of Business Subjects in National Development in relation to every day life. The focus however, is on what the pupil will be able to do after acquiring the knowledge and skills offered in this course of study. The knowledge acquired is vital to the development and betterment of not only the pupil but the community as well. The course will also assist the pupil acquire the necessary productive skills in readiness for self employment as well as wage employment. It should also provide a base for further studies in the field of business studies. It is hoped that the knowledge acquired from these subjects will go a long way in helping the pupils later in life and also assist them to face the world with confidence. It is my sincere hope that this revised syllabus will improve learning and teaching in our schools. James Mulungushi (Dr.) PERMANENT SECRETARY MINISTRY OF EDUCATION LUSAKA i ACKNOWLEDGEMENTS The review workshop would not have been accomplished without the involvement, participation and commitment of many people. We want to thank all of them. Most importantly we want to thank the Securities and Exchange Commission and Lusaka Stock Exchange for funding the workshop. We are greatly indebted to the people who carried the actual revisions at the workshop and these are: Mr. D. Choonga Mrs. E.B. Chisha Mr. W. Chishi - Mrs. M.G. Nyambe Mrs. M.M.M. Matebele Mr. O.V. Hamwaala - Senior Examination Specialist, Examinations Council of Zambia, Head of Grade 9 Examinations. Acting Senior Curriculum Specialist, Curriculum Development Centre. Head of Department, Business and Secretarial Teacher Education, Technical and Vocational Training College. Curriculum Development Officer, Curriculum Development Centre. Head of Department, Business Subjects, Monze Secondary School. Teacher, Kabulonga Boys Secondary School. We would like to thank the typesetter Mary Mupeta for typesetting this syllabus. We wish to acknowledge the support and encouragement given to us by the Permanent Secretary, Ministry of Education Dr. James Mulungushi. Finally, acknowledge is made to the Business Studies Curriculum Committee for approving the syllabus. F.M. Mfula (Mrs.) Director - Standards and Curriculum MINISTRY OF EDUCATION ii INTRODUCTION This syllabus has been produced against the background of the National Policy on Education Document (1996) Educating Our Future’. In the National Policy on Education Document, Business Subjects are stressed as essential for starting and running a business, for work and entrepreneurship. They incorporate the acquisition of both academic and entrepreneurship skills. The subjects involved are Commerce and principles of Accounts. The syllabus took into consideration the need to include Topics on the Lusaka Stock Exchange and Securities and Exchange Commission to enable pupils learn about their own stock exchange. In the study of commerce, the syllabus’ emphasis is on home trade but also includes some knowledge on international activities. The syllabus also covers topics on the Stock Exchange and Securities and Exchange Commission in Zambia. In addition, it outlines the procedures and documents in the day to day conduct of the business especially in commercial institutions. In the study of principles of Accounts, the syllabus outlines subsidiary books, the ledger and final accounts. It also includes accounts of nontrading concerns, manufacturing, incomplete records and partnerships. Information is also outlined on Public Limited companies. The syllabus aims at presenting Business Subjects as usable skills by emphasizing those aspects of commercial knowledge which are relevant to the acquisition of business skills. This will assist in developing the pupil’s interest in learning through critical evaluation rather than by just accepting information as facts. It will also assist in appreciating the importance of Business Subjects in National Development. The implementers of this syllabus must help the pupils in developing a positive attitude towards Commerce and Principles of Accounts, so that they know that these subjects can enable them to go out into the world of business. iii GENERAL AIMS The Business Subjects Syllabus aims at developing knowledge and understanding of: 1. 2. 3. 4. 5. 6. 7. 8. the environment within which commercial activity takes place. aims and activities of business and non-trading concerns. the purposes and functions of important commercial activities. the principles and purposes of accounting. the language concepts and procedures in commercial activities. accounting concepts, convention, procedures and terminologies. skills of numeracy, literacy, communication, enquiry, presentation and interpretation. the significance of innovation and change within the context of commercial activities. The Business Subjects Syllabus aims at preparing the pupil for out of school employment. It provides the pupils with skills that will make it possible for joining the world of business with some basic knowledge of what is expected. In these days of economic liberalisation, the pupil who is equipped with some basic skills of Commerce and Principles of Accounts is marketable both as a wage earner and self employed person. These subjects also provided the pupil with the background knowledge and skills required for further studies. iv GENERAL OBJECTIVES COMMERCE Pupils should be able to (PSBAT) 1. acquire commercial knowledge, skills and attitudes. 2. use the acquired knowledge or skills to pursue a career in business studies. 3. interpret business documents. 4. display an understanding of commercial activities in everyday life taking into account gender issues. 5. distinguish between evidence and opinion so as to make a reasonable judgement. PRINCIPLES OF ACCOUNTS Pupils should be able to (PSBAT) 1. acquire knowledge, skills and attitudes in principles of accounts. 2. use the acquired knowledge and skills to pursue a career in business studies. 3. perform accounting duties regardless of gender. 4. apply the knowledge acquired to various accounting situations and problems. 5. analyse economic and social problems and provide solutions. v FEATURES OF THE SYLLABUS The syllabus is divided into two parts, namely Commerce and principles of Accounts. Each of the two subjects is a three year course for Grades 10, 11 and 12. Each subject syllabus consists of aims and objectives. Each subject is again divided into grades. The grades are then divided into topics. A topic consists of specific objectives and sub-topics. A topic is a broad theme that describes the main areas within each discipline. Specific objectives state what is expected of the pupils at the end of each topic and are derived from sub-topics. The sub-topics state what is to be taught. The syllabus states the specific objectives but not the method of achieving them. The teacher is free to use appropriate methods in the school that suit the local environment. Education visit or tours should be encouraged. This means that pupils can be taken to places of interest. For example if they are being taught about functions of the Central Bank (Bank of Zambia), Communication (Zam Tel), Lusaka Stock Exchange (LuSE), Insurance (Insurance Companies) etc., visits or tours can be arranged. This will give pupils the opportunity to ask questions on the spot. Teaching and learning aids should be used where necessary because they are essential. Pupils grasp very quickly what is being taught when a teaching and learning aid is used.. TIME TABLE The subjects in the syllabus specify three year courses for Grade 10, 11 and 12. 8 periods of 40 minutes each per week are allocated to Business Subjects. This is usually divided between the subjects as follows: Commerce – 4 periods and Principles of Accounts – 4 periods. It is possible for pupils to take both Commerce and Principles of Accounts. EXAMINATIONS The final examination will be conducted at the end of Grade Twelve. vi GRADE 10 COMMERCE TOPIC 1. PRODUCTION SUB-TOPIC 1.1 Production - needs - wants - goods - services SPECIFIC OBJECTIVES - PSBAT 1.1.1 define the term production. 1.2 Factors of Production - land - capital - labour - enterprise organisation 1.2.1 research or find out the factors of production. 1.3 Methods of Production Direct and indirect production 1.3.1 discuss the methods of production. 1.4 Types of Production - Primary - Secondary - Tertiary 1.4.1 differentiate the types of production. 1.5 Branches of Production - Industry - Direct Services - Commerce 1.5.1 investigate the branches of production. 1 1.5.2 draw the diagram of production. TOPIC 2. INDUSTRY 3. DIRECT SERVICES 4. COMMERCE SUB-TOPIC 2.1 Industry SPECIFIC OBJECTIVES - PSBAT 2.1.1 explain the term industry. 2.2 Classes of industry Extractive Manufacturing Constructive 3.1 Direct services - Medical - Education - Legal - Entertainment - Accounting and others. 2.2.1 identify classes of industry. 3.2 Division of labour (Specialisation). 3.2.1 explain division of labour. 3.2.2 discuss the advantages and disadvantages of division of labour. 4.1.1 define the term commerce. 4.1 Commerce 3.1.1 list the direct services. 3.1.2 find out more about the direct services. 4.2 Trade - Home: Retail and Wholesale - Foreign: Import and Export 4.2.1 define trade. 4.3 Aids to trade - Banking - Insurance 4.3.1 4.3.2 2 list the aids to trade. explain the roles of aids to trade. TOPIC 5. HOME TRADE - RETAIL SUB-TOPIC Communication Transport Warehousing Advertising SPECIFIC OBJECTIVES - PSBAT 5.1 Home trade 4.3.3 draw the diagram of commerce. 5.1.1 define home trade. 5.2 Retail trade 5.2.1 discuss retail trade. 5.2.1 Functions of the retailer Factors Type of retail outlets Characteristics of small and Large scale retailers. Advantages and disadvantages of small and large scale retailers. 5.2.2 5.2.3 state the functions of the retailer. identify factors necessary for setting up a retail business. explain the types of retail outlets. discuss the characteristics or features of small and large scale retailers. 5.2.4 5.2.5 5.2.6 6. HOME TRADE - WHOLESALE 6.1 Wholesale trade Functions importance 6.1.1 6.1.2 6.1.3 3 discuss the advantages and disadvantages of small and large scale retailers. discuss wholesale trade. state the functions of the wholesaler. explain the importance of the wholesaler. TOPIC SUB-TOPIC 6.2 Types of wholesalers. - regional - cash and carry - independent - specialist - general etc. SPECIFIC OBJECTIVES - PSBAT 6.2.1 Identify the different types of wholesalers. 6.3 Elimination of the wholesalers. 6.3.1 discuss reasons for the elimination of the wholesaler. 6.4.1 discuss reasons for the survival of the independent wholesaler. 6.5.1 describe the different types of middlemen in the wholesale trade. 6.4 Survival of the independent wholesaler. 6.5 Types of middlemen. - factors - brokers - distributors - merchants 7. BUYING ON CREDIT 7.1 Buying on credit. 7.1.1 explain buying on credit. 7.2 Methods of buying on credit - Hire purchase - Credit sale agreement - Deferred payments 7.2.1 describe the methods of buying on credit. 7.2.2 discuss the advantages and disadvantages of buying on credit. 4 TOPIC SUB-TOPIC 7.3 Hire Purchase Finance Company. 7.4 Measures taken to protect the consumer. 8. DOCUMENTS USED IN HOME TRADE 8.1 Documents used in buying and selling: - inquiry quotation and estimate catalogue order invoice debit note credit note dispatch note advice note delivery note cash sale slip statement of account proforma invoice cheque receipt 8.2 Cash and trade discounts. 5 SPECIFIC OBJECTIVES - PSBAT 7.3.1 explain the work of Hire Purchase Finance Company. 7.4.1 discuss the measures taken to protect the consumer. 8.1.1 describe the documents used in buying and selling in home trade. 8.1.2 8.1.3 8.1.4 8.2.1 recognise the documents used in the process of buying and selling of goods. use the documents in the buying and selling of goods. maintain the documents used in buying and selling. calculate cash and trade discounts. GRADE 11 COMMERCE TOPIC 9. FOREIGN TRADE (INTERNATIONAL TRADE) SUB-TOPIC 9.1 Foreign trade. SPECIFIC OBJECTIVES - PSBAT 9.1.1 define foreign trade. 9.2 Reasons for foreign trade. 9.2.1 state the reasons for foreign trade. 9.3 Problems experienced in foreign trade. 9.3.1 explain the problems experienced in foreign trade. 9.4.1 discuss the advantages and disadvantages of foreign trade. 9.4 Documents used in foreign trade - documentary credits - letter of credit - bill of lading - charter party - consumer invoice - certificate of origin - letter of hypothecation - Zambia Revenue Authority 9.5 Customs authority. Port authority 9.6 Difference between excise and customs duties. 9.7 Bonded warehouses. 9.8 Middlemen - functions of middlemen - forwarding agents - import brokers 6 9.4.2 explain the documents used in foreign trade. 9.4.3 use the documents. 9.5.1 explain the functions of the Zambia Revenue Authority, Customs Authority and Port Authority. 9.6.1 distinguish between excise and customs duties. 9.6.2 discuss the requirements of a harbour or port. 9.7.1 describe bonded warehouses. 9.8.1 identify types of middlemen. 9.8.2 explain the functions of middlemen. TOPIC 10. ORGANISATION OF BUSINESS UNITS SUB-TOPIC 9.9 Means of payment - banker’s draft - letter of credit - documentary credits - cable transfer - letter of hypothecation - bank transfer - etc 9.10 Balance of trade and Balance of payment. SPECIFIC OBJECTIVES - PSBAT 9.9.1 explain the means of payment. 9.9.2 name different means of payments. 10.1 Private sector 10.1.1 explain the term private sector. 10.2 Business units - Sole trader - Partnership - Private limited company - Public limited company 10.2.1 identify the different types of business units. 10.2.2 discuss the advantages of private sector. 10.3 Characteristics of business units. 10.3.1 explain the characteristics of business units. 10.4 Formation 10.4.1 discuss the documents for the formation of different types of business. - Partnership deed or Articles of partnership. 7 9.10.1 discuss the balances of trade and payments. TOPIC - 11. ORGANISATION OF BUSINESS UNITS SUB-TOPIC Articles of association. Memorandum of association. CONTENT 10.4.2 discuss the advantages and disadvantages of different types of business units. 10.5 Similarities and differences between private and public limited companies. 10.5.1 discuss the similarities and differences between public and private limited companies. 11.1 Public Sector. 11.1.1 explain the term public sector. 11.2 Different types of state enterprises - Public Utility Corporations. - Parastatals or Nationalised Industries. 11.2.1 identify the different types of state enterprises. 11.2.2 discuss the reasons for the existence of state enterprises. 11.2.3 outline the advantages and disadvantages of state enterprises. 11.3 Differences between public utility corporations and public limited companies. 11.3.1 distinguish between public utility corporations and public limited companies. 8 TOPIC 12. STOCK EXCHANGE. 13. LUSAKA STOCK EXCHANGE (LuSE). SUB-TOPIC 12.1 Stock Exchange. - Securities - Shares - Stocks - Bonds - Debentures 12.2 Purpose and functions of the Stock Exchange. SPECIFIC OBJECTIVES - PSBAT 12.1.1 define the Stock Exchange. 12.3 Trading on the Stock Exchange. 12.3.1 discuss the trading on the Stock Exchange. 13.1.1 outline the reasons for the establishment of LuSE. 13.1 Establishment of LuSE. 12.2.1 explain the purpose and functions of the Stock Exchange. 13.2 Purpose, objectives and functions. 13.2.1 state the purpose, objectives and functions of LuSE. 13.3 Main players on the Lusaka Stock Exchange. 13.3.1 discuss the main players on LuSE. - Brokers Dealers Listed companies on LuSE Quote companies Institutional Investors Private Investors Underwriters Merchant Banks 9 TOPIC - 14. REGULATION OF THE MARKET (SEC) SUB-TOPIC Government Foreign Investors SPECIFIC OBJECTIVES - PSBAT 13.4 Buying and selling of shares - Floatation of shares - Becoming a shareholder 13.4.1 explain the process of buying and selling of shares. 13.4.2 participate in the buying and selling of shares. 13.5 Benefits and risks. 13.5.1 discuss the benefits of being a shareholder and the risks involved. 14.1.1 explain powers and roles of Securities and Exchange Commission. 14.1 Securities and Exchange Commission 14.2 Self regulation 14.2.1 discuss self regulation by Lusaka Stock Exchange. 10 TOPIC 15. BANKING SUB-TOPIC 15.1 Banking SPECIFIC OBJECTIVES - PSBAT 15.1.1 define banking. 15.2 Financial Institutions - Building Societies - Commercial Banks - Credit Unions and Savings - Accounts - Central Bank - Insurance Companies 15.2.1 explain financial institution concerned with banking. 15.3 Functions and Services of Commercial Banks. 15.3.1 discuss the functions and services of commercial banks. 15.4 Operations of different types of accounts. - Savings - Deposit - Fixed deposit 15.4.1 explain the operations of different types of accounts. 15.5 Documents for different accounts. 15.5.1 identify the documents for different accounts. 15.5.2 use the documents. 15.6 Means of Payment - Cheque - Standing order 15.6.1 discuss means of payment through the bank. 11 15.4.2 discuss the advantages and disadvantages of different types of accounts. TOPIC - SUB-TOPIC Credit transfer Direct debiting Bankers draft Cash dispersers SPECIFIC OBJECTIVES - PSBAT 15.7 Functions of the Central Bank. 15.7.1 discuss the functions of the Central Bank. 15.8 Cheque clearing system. 15.8.1 describe the cheque clearing system. 15.9 Rights of a customer. - Relationship - Rules of the bank - Discrimination in services of banks. 15.9.1 discuss the rights of the customer in banking. 12 GRADE 12 COMMERCE TOPIC 16. INSURANCE SUB-TOPIC 16.1 Insurance CONTENT 16.1.1 define insurance. 16.2 Purpose of insurance. 16.2.1 explain the purpose of insurance. 16.3 Principles of insurance. - Insurable interest - Utmost good faith - Indemnity 16.3.1 explain the principles of insurance. 16.4 Insurable and non insurable risks. 16.4.1 distinguish between insurable and non insurable risks. 16.5 Types: - Life Assurance - Fire Insurance - Marine and Aviation - Accident - Injury - Burglary or theft 16.5.1 explain the different types of insurance. 16.6 Insurable Policies - Comprehensive - Third party 16.6.1 describe the different types of insurance policies. 13 TOPIC 17. COMMUNICATION SUB-TOPIC 16.7 Procedures 16.8 Insurance Brokers 17.1 Communication 17.2 Postal Services - SPECIFIC OBJECTIVES - PSBAT 16.7.1 explain the procedures for effecting an insurance cover. 16.8.1 explain the work of insurance brokers. 17.1.1 define communication. 17.2.1 explain the postal services. 17.2.2 use the postal services. Mail Circulars Printed matters Registered mail, articles and parcels Reply coupon Business reply service Poste restante Special delivery Express mail/express post Data post Post cards Cash on delivery (COD) Post boxes and Private bags Recorded delivery 14 TOPIC - SUB-TOPIC Free post Postage forward parcel service Postal orders Money orders etc. 17.3 Telecommunication services Telephone: Types of telephone calls - cellular phone - Telegram - Telex - E-mail - Internet - Radio paging - Phonogram - Radio Message - Fax - Telecom Confravision - local and trunk - alarm - emergency - fixed time - personal - transfer charge - telephone credit calls - free phone - Telex 15 SPECIFIC OBJECTIVES - PSBAT 17.3.1 explain the telecommunication services. 17.3.2 use the telecommunication services. TOPIC 18. TRANSPORT SUB-TOPIC 18.1 Transport 18.2 Importance of transport 18.3 Factors 18.4 Methods of transport 18.5 - Sea - Road - Air - Rail - Pipeline Documents used in transportation. 18.6 Port 18.7 Types of ports 18.8 - Sea port - Air port - Dry port Requirements 18.9 containerisation SPECIFIC OBJECTIVES - PSBAT 18.1.1 define transport. 18.2.1 explain the importance of transport. 18.3.1 state factors involved in choosing the type of transport. 18.4.1 discuss different methods of transport. 18.5.1 explain the documents used in transportation of goods. 18.6.1 describe a port. 18.7.1 explain the different types of ports. 18.8.1 discuss the requirements of a good port. 18.9.1 explain containerisation. 18.9.2 outline the advantages and disadvantages of containerisation. 16 TOPIC 19. WAREHOUSING 19.1 SUB-TOPIC Warehousing SPECIFIC OBJECTIVES - PSBAT 19.1.1 define warehousing. 19.2 Importance 19.2.1 explain the importance of warehousing. 19.3 Types: 19.3.1 discuss different types of warehouse. 20. ADVERTISING 20.1 Manufacturer’s Wholesaler’s Retailer’s Public Bonded Advertising 20.1.1 define advertising. Purposes 20.1.2 explain the purposes of advertising. Methods 20.1.3 discuss methods of appealing to the public. Types 20.1.4 state the different types of advertising. 20.1.5 explain the dangers of advertising. 20.1.6 discuss the advantages and disadvantages of advertising. 17 TOPIC 20.2 SUB-TOPIC Forms of Media. CONTENT 20.2.1 describe the forms of media used in advertising. 20.2.2 discuss the rules of the advertising agents. 21. FINANCE OF BUSINESS UNITS 20.3 Functions of advertising agencies. 20.3.1 explain the functions of advertising agencies. 20.4 Consumer protection. 21.1 Finance of business units. 20.4.1 discuss consumer protection against bad types of advertising. 21.1.1 show the finance of business units. 21.2 Types of capital: - 21.2.1 discuss the different types of capital of business units. Fixed capital Loan capital Capital employed Liquid capital Working capital 18 TOPIC SUB-TOPIC 21.3 Ratios: - Gross profit - Net profit - Working capital - Liquid capital - Rate of turn over - Acid Test ratio - Current ratio - Debtor ratio - Creditor ratio 19 SPECIFIC OBJECTIVES - PSBAT 21.3.1 calculate the different ratios. 21.3.2 Interpret the ratios. 21.3.3 Use the ratios to make decisions. GRADE 10 PRINCIPLES OF ACCOUNTS TOPIC 1. INTRODUCTION TO PRINCIPLES OF ACCOUNTS 2. ACCOUNTING CONCEPTS AND PRINCIPLES SUB-TOPIC 1.1 Accounting SPECIFIC OBJECTIVES - PSBAT 1.1.1 define accounting. 1.2 Importance of accounting 1.2.1 1.3 Job opportunities 1.3.1 2.1 Accounting concepts: - Cost - Prudence - Going concern - Business entity - Realisation - Objectivity - Dual aspect - Consistence - Accrual - Materiality - Periodical Statement of Standard Accounting: - Practice (SSAP) - Financial reporting standards 2.2 20 explain the importance of accounting. identify career prospects taking into account gender issues. 2.1.1 explain accounting concepts. 2.2.1 explain statement of standard accounting practice (SSAP). 2.2.2 relate accounting concepts to business situation. 2.2.3 explain the final reporting standards. TOPIC 3. BALANCE SHEET 4. BUSINESS TRANSACTIONS SUB-TOPIC Balance sheet - Accounting equation. - Assets, liabilities and capital. - Order of liquidity and permanence. - Preparation of balance sheet. - Working capital. SPECIFIC OBJECTIVES - PSBAT 3.1.1 define the balance sheet. 3.1.2 state the accounting equation. 3.1.3 use the accounting equation. 3.1.4 identify assets, liabilities and capital. 3.1.5 find out relationships between assets, liabilities and capital. 3.1.6 prepare balance sheet. 3.1.7 explain the importance of working capital. 3.2 Transactions. 4.1 Business transaction. 3.2.1 show the effect of transactions on an accounting equation. 4.1.1 explain a business transaction. 4.2. Types: - cash or bank - credit - barter 3.1 4.2.1 identify types of transactions. 21 TOPIC 5. DOUBLE ENTRY 6. LEDGER SUB-TOPIC Principle of double entry: - debit - credit SPECIFIC OBJECTIVES - PSBAT 5.1.1 explain the principle of double entry. 5.2 Account 5.2.1 define an account. 5.2.2 record transactions in an account. 5.3 Classes of accounts - real - personal - nominal The ledger 5.3.1 identify the classes of accounts. Divisions of the ledger: - General ledger (nominal) - Debtors ledger (sales) - Creditors ledger (purchases) - Business transactions. 6.2.1 6.2.2 5.1 6.1 6.2 22 6.1.1 describe the ledger. 6.2.3 show the divisions of the ledger. record business transaction in the ledger. balance and close off the accounts. TOPIC 7. TRIAL BALANCE SUB-TOPIC 7.1 Trial balance. 7.1.1 7.2 Purpose 7.2.1 7.2.2 8. BOOKS OF PRIME OR ORIGINAL ENTRY OR SUBSIDIARY BOOKS CONTENT define trial balance. explain the purpose of preparing the trial balance. identify information required to prepare a trial balance. 7.3 8.1 Preparation of a trial balance. Books of prime entry: - Purchases day book - Sales day book - Cash book - Purchases returns book - Sales returns book - General journal - Petty cash book 7.3.1 8.2.1 prepare a trial balance. identify books of prime entry or subsidiary books. 8.2 Source documents: - Receipts - Cash sale slips - Bank paying in slips - Cheque and cheque counterfoils - Tickets - Invoices - Credit notes - Petty cash vouchers etc. 8.2.1 explain the source documents used to record in the books of prime entry. 23 TOPIC 9. FINAL ACCOUNTS 8.3 SUB-TOPIC Trade and cash discounts. SPECIFIC OBJECTIVES - PSBAT 8.3.1 explain trade and cash discounts. 8.3.2 calculate trade and cash discounts. 8.4 Recording transactions. 8.4.1 record the transactions in the books of prime entry. 8.5 Posting to the ledger. 8.5.1 post totals of prime or original entry to the ledger. 8.6 9.1 Trial balance. Final accounts: - Trading account - Profit and loss account Purpose of final accounts. 8.6.1 extract a trial balance. 9.1.1 identify final accounts. 9.2 9.3 9.4 Preparation of trading and profit and loss account. Gross profit or loss and net profit or loss. 9.5 Balance sheet. 24 9.2.1 explain the purpose of final accounts. 9.3.1 prepare trading and profit loss accounts. 9.4.1 calculate gross profit or loss and net profit or loss. 9.5.1 prepare the balance sheet. GRADE 11 PRINCIPLES OF ACCOUNTS TOPIC 10. ADJUSTMENTS TO FINAL ACCOUNTS – DEPRECIATION 10.1 SUB-TOPIC Adjustments. SPECIFIC OBJECTIVES - PSBAT 10.1.1 explain the term adjustment to final accounts. 10.2 Depreciation of fixed assets. 10.2.1 define depreciation. 10.3 Methods of depreciation: - Straight line or equal instalments - Diminishing balance - Revaluation. 10.3.1 describe methods of depreciation of fixed assets. 10.4 Calculation of the amount of depreciation. 10.4.1 calculate the amount of depreciation. 10.5 Recording of depreciation. 10.6 Disposal of fixed assets. 10.7 Recording disposal of fixed assets and adjustments in the provision for depreciation account. 10.5.1 record depreciation in the provision for depreciation account. 10.6.1 explain the disposal of fixed assets. 10.7.1 record the disposal of fixed assets and the adjustments needed in the provision for depreciation account. 11.1.1 explain the terms accruals and pre-payments. 11.1.2 state the other names for accruals and pre-payments. 11.1.3 give examples of accruals and pre-payments. 11.1 11. ADJUSTMENTS TO FINAL ACCOUNTS – ACCRUALS AND PRE-PAYMENTS Accruals and pre-payments. 25 TOPIC SUB-TOPIC 12. ADJUSTMENTS TO FINAL ACCOUNTS - BAD DEBTS - PROVISION FOR BAD AND DOUBTFUL DEBTS AND DISCOUNT ALLOWED. 12.1 13. LIMITATIONS OF THE TRIAL BALANCE 13.1 12.2 12.3 13.2 SPECIFIC OBJECTIVES - PSBAT 11.1.4 calculate the amount of accrued expenses and income and prepaid expenses and income. 11.1.5 record accruals and prepayments. Bad debts and provisions for bad and doubtful 12.1.1 explain bad debts and provision debts. for bad and doubtful debts. increase and decrease for bad and doubtful 12.2.1 discuss the increase and decrease debts. for bad and doubtful debts. provision for discount on debtors. 12.3.1 explain the provision for discount on debtors. 12.3.2 calculate the amount of provision for bad debts and discounts. 12.3.3 record bad debts, provision for bad debts and discounts. Limitations of the trial balance. 13.1.1 state the limitation of a trial balance. Errors not disclosed by trial balance: 13.2.1 explain the errors not disclosed by - Omission the trial balance. 26 TOPIC 13.3 13.4 14. BANK RECONCILIATION SUB-TOPIC - Original entry - Commission - Principle - Complete reversal - Compensation Suspense account. Errors disclosed by the trial balance. - Single - Transposition - Wrong addition SPECIFIC OBJECTIVES - PSBAT 13.2.2 detect errors not disclosed by the trial balance. 13.2.3 correct the errors not disclosed by the trial balance through the journal 13.3.1 explain the suspense account. 13.4.1 identify errors disclosed by the trial balance. 13.4.2 correct errors disclosed by the trial balance using suspense account. 13.4.3 calculate profits or loss after correction of errors in the trial balance. 14.1.1 define the term bank reconciliation. 14.2.1 explain the bank statement. 14.1 Bank reconciliation. 14.2 Bank statement 14.3 Differences. 14.3.1 explain the reasons for the difference between cash book balance and bank statement. 14.4 Preparation of: - Revised cash book and - Bank reconciliation. 14.4.1 prepare the revised cash book. 14.4.2 Prepare the bank reconciliation statement. 14.4.3 Prepare bank reconciliation after revising cash book balance. 27 TOPIC 15. CONTROL ACCOUNTS 16. ACCOUNTS OF NON PROFIT MAKING ORGANISATIONS 15.1 SUB-TOPIC Control accounts CONTENT 15.1.1 describe control accounts. 15.2 Purpose 15.2.1 explain the purpose of control accounts. 15.3 Forms - Creditor’s ledger - Debtor’s ledger 15.3.1 identify forms of control accounts. 15.4 Sources of information. 15.4.1 explain sources of information for control accounts. 16.1 Accounts of non-profit making organisations. 16.2 Accounts of non-profit making organisations. (a) Receipts and payments (b) Income and expenditure. 16.1.1 describe accounts of non-profit making organisations. 16.1.2 give examples of non-profit making organisations. 16.1.3 prepare control accounts. 16.1.4 distinguish between non-profit making and profit making organisations. 16.2.1 identify accounts of non-profit making organisations. 16.2.2 Prepare accounts of non-profit making organisations and a balance sheet. 28 TOPIC 17. CAPITAL AND REVENUE EXPENDITURE AND RECEIPTS 17.1 SUB-TOPIC Capital and revenue expenditure and receipts. SPECIFIC OBJECTIVES - PSBAT 17.1.1 explain the terms capital expenditure, revenue expenditure, capital receipts, and revenue expenditure. 17.1.2 distinguish between revenue and capital expenditure and revenue and capital receipts. 29 GRADE 12 PRINCIPLES OF ACCOUNTS TOPIC 18. INCOMPLETE RECORDS OR SINGLE ENTRY SUB-TOPIC 18.1 Single entry and incomplete records. SPECIFIC OBJECTIVES - PSBAT 18.1.1 explain the terms single entry and incomplete records. 18.1.2 distinguish between double entry and single entry. 18.2 Increase and decrease in net worth. 18.2.1 discuss the increase and decrease in net worth. 18.2.2 calculate the increase and decreases in net worth. 18.3 Statements of profit and affairs. 18.3.1 explain statement of profit and statement of affairs. 18.3.2 prepare the statements of profit and affairs. 18.4 Converting incomplete records into double entry. 18.4.1 convert incomplete records into double entry. 18.5 Calculating purchases and sales. 18.5.1 calculate the amounts of purchases and sales. 18.6 Final accounts and balance sheet. 18.6.1 prepare final accounts and balance sheet. 30 TOPIC 19. PARTNERSHIP SUB-TOPIC 19.1 Partnerships. SPECIFIC OBJECTIVES - PSBAT 19.1.1 define partnerships. 19.2 Partnership Accounts: - Capital - Current - Appropriation 19.2.1 discuss partnership accounts. 19.2.2 prepare partnership accounts. 19.3 Interest on drawings and capital. 19.3.1 calculate interest on drawings and capital. 19.3.2 record the interest on drawings and capital in the partnership accounts. 19.4 Final accounts and balance sheet. 19.4.1 prepare final accounts and balance sheet. 19.5 Premium and Good will. 19.5.1 explain the accounts of premium and good will. 19.5.2 calculate good will. 19.6 Accounts on admission of new partner. 19.6.1 state reasons for admitting a new partner. 19.6.2 prepare the necessary accounts on admission of new partner. 19.6.3 state reasons for dissolving a partnership. 19.6.4 prepare realisation accounts. 31 TOPIC 20. MANUFACTURING ACCOUNTS 21. ACCOUNTS OF LIMITED LIABILITY OR JOINT STOCK COMPANIES SUB-TOPIC 20.1 Manufacturing accounts. SPECIFIC OBJECTIVES - PSBAT 20.1.1 explain manufacturing accounts. 20.2 Types of costs: - Direct cost. - Indirect costs. 20.2.1 discuss the different types of costs in manufacturing. 20.3 Types of stocks: - raw materials - finished goods - work in progress 20.3.1 identify types of stocks in manufacturing. 20.3.2 prepare the manufacturing account, trading and profit and loss account and balance sheet. 20.4 Manufacturing profit. 20.4.1 calculate the manufacturing profit. 21.1 Limited liability company. 21.1.1 discuss limited liability company. 21.2 Classification of capital: - Nominal or Registered - Issued - Subscribed - Fully paid 21.2.1 classify the capital of a limited company. 21.3 Types of shares: - Ordinary - Preference 21.3.1 explain the different types of shares. 32 TOPIC 22. DEPARTMENTAL ACCOUNTS 23. INTERPRETATION OF FINAL ACCOUNTS AND BALANCE SHEET SUB-TOPIC 21.4 Profit and loss appropriation account and balance sheet. 22.1 Departmental accounts. CONTENT 21.4.1 prepare profit and loss and appropriation account and balance sheet. 22.1.1 explain departmental accounts. 22.2 Apportionment of expenses. 22.2.1 discuss apportionment of expenses to departments. 22.3 Department accounts and balance sheet. 22.3.1 prepare departmental accounts and balance sheet. 23.1 Accounting ratios: - Gross profit - Net profit - Rate of turnover or stock turn - Debtors/sales - Creditors/purchases - Working capital - Liquidity - Acid test - Return On Capital Employed (ROCE) 23.1.1 explain the importance of accounting ratios. 33 23.1.2 calculate the accounting ratio. 23.1.3 Interpret the accounting ratios to make decisions.