Accounting Units 3 and 4
Unit 3 focuses on financial accounting for a trading business owned by a sole proprietor, and highlights the role of accounting as an information system. Students use the double entry system of recording financial data and
prepare reports using the accrual basis of accounting and the perpetual method of inventory recording. Students develop their understanding of the accounting processes for recording and reporting and consider the
effect of decisions made on the performance of the business. They interpret reports and information presented in a variety of formats and suggest strategies to the owner to improve the performance of the business.
In Unit 4, students further develop their understanding of accounting for a trading business owned by a sole proprietor and the role of accounting as an information system. Students use the double entry system of recording
financial data, and prepare reports using the accrual basis of accounting and the perpetual method of inventory recording. Both manual methods and ICT are used to record and report. Students extend their understanding of the recording and reporting process with the inclusion of balance day
adjustments and alternative depreciation methods. They investigate both the role and importance of budgeting in decision-making for a business. They analyse and interpret accounting reports and graphical representations to
evaluate the performance of a business. From this evaluation, students suggest strategies to business owners to improve business performance.
The accounting procedures developed in each area of study should incorporate financial indicators to measure business performance, as well as the ethical considerations of business owners when making decisions, including financial, social and environmental.
What do you do?
Activities you will engage in include:
- practical exercises that will require recording in the general journal and ledgers
- preparation of trial balance and final reports such as income statements, balance sheets and cash flow statements, which may be done manually and using technology
- reading comprehension tasks where students need to discuss how, why, what, when transactions are recorded and reported in the manner that they are
- preparing budgets and analysing prepared reports to determine strategies of improving performance of the business
What skills do you need?
To be successful in this subject you need:
Numerical competence: there’s no need to be a Maths genius but you must be comfortable with numbers
Communication skills: you need to be able to confidently communicate technical information to others with no accounting knowledge. It is important to be able to communicate clearly at all levels of the business.
Problem solving: in Accounting you will often need to determine the best way to solve a problem. Sometimes Accounting can be like a jigsaw puzzle and you need to be able to put the pieces together. Accounting requires the ability to be able to analyse and interpret information and be able to find solutions to a problem or case study.
Reporting skills: in Accounting you will need to prepare statistical and written reports, providing advice to a business on how it should continue to operate.
Business awareness: when studying any business subject, but particularly in Accounting you need to aware of what is happening in the business environment as this can have a direct impact on the way you answer questions in the area of analysis and interpretation. You need to keep up to date with current economic issues.
What skills do you develop?
Students develop interpersonal, teamwork and problem solving skills. Students learn to analyse facts and figures and be able to interpret data given. They also learn how to apply technology in the accounting field.
You will require a computer with Excel, and a calculator.
The following textbook is required: Macmillan Accounting VCE Units 3 & 4 Value Bundle (Student Book + Digital + workbook) Neville Box 2018 for the new course of study 2019-2023
Things to think about
You need to have an interest in business and finance.
Having completed either Units 1 or 2 Accounting would be an advantage or recommended, so the student is familiar with some of the Accounting concepts covered in Year 12.
Students will be required to self-assess their understanding of the weekly work and their practice exercises.
Things you can do now
Visit this website which goes through the basics of Accounting. It’s a good introduction for students who have not studied Year 11 accounting before.
Go to the VCAA website for more information about this subject.