Accounting Units 3 and 4
Accounting Unit 3 focuses on financial accounting for a single activity trading business as operated by a sole trader and emphasises 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. The perpetual method of stock recording with the First In, First Out (FIFO) method is used. Where appropriate, the accounting procedures developed in each area of study incorporate the application of accounting principles and the qualitative characteristics of accounting information.
Unit 4 extends on Unit 3 recording and reporting processes and looks at the use of financial and non-financial information in assisting management in the decision-making process.
Students will be looking at budgeting and preparing reports which then will require thorough analysis and interpretation in relation to profitability, liquidity and long term debt and require them to analyse results and then be able to suggest strategies for improvement.
Who is it for?
This subject is for students who enjoy working with figures and like a challenge. The subject is theory and practical based. Studying Accounting allows students to continue on to university to get a degree in Accounting that allows graduates to pursue a career as a professional accountant in business or government, or in business fields such as management consulting and financial management.
Job titles include, among others, accountant, financial analyst, real estate assessor, forensic actuary, and auditor. Graduates can also turn to public accounting operating as a tax agent, helping small business with all their financial needs, stock broker and financial adviser just to name a few.
What do you do?
Activities you will engage in include:
- practical exercises that will require recording in specialised journals 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
- quizzes ranging from multiple choice to short answers and true / false type tasks
- 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’ll require a computer with Excel, and a calculator.
The following textbook is required: Simmons, A (2012) Cambridge VCE Accounting: Units 3 and 4 (3rd ed.), Cambridge University Press
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.
Things to have a look at
Why study accounting?
Basic Accounting Concepts 1
Double-Entry Accounting Introduction