GRADE 10 SUBJECT: PRINCIPLES OF ACCOUNTS WEEK 1: …

MINISTRY OF EDUCATION

EASTER TERM 2021

JANUARY, 2021

GRADE 10

SUBJECT: PRINCIPLES OF ACCOUNTS

WEEK 1: LESSON 1

TOPIC: CONCEPT, PURPOSE & FUNCTIONS OF ACCOUNTING

CONTENT:

CONCEPT OF ACCOUNTING

The process of identifying, measuring and communicating economic information to permit informed

judgments and decisions by users of the information.

PURPOSE OF ACCOUNTING

The purpose of accounting is to accumulate and report on financial information about the performance,

financial position, and cash flows of a business. This information is then used to reach decisions about

how to manage the business, or invest in it, or lend money to it. This information is accumulated in

accounting records with accounting transactions, which are recorded either through such standardized

business transactions as customer invoicing or supplier invoices, or through more specialized

transactions, known as journal entries.

FUNCTIONS OF ACCOUNTING

1. The accounting helps in the maintenance of bookkeeping and record keeping.

2. Accounting helps in the collection and storage of the financial information, transactions happening

within the organization, and financial activities happening in the organization.

3. It helps in the tracking of several financial information on a daily or a monthly basis.

4. It helps in the creation and documentation of financial history from day to the latest period.

5. It helps in the formulation of comprehensive financial policy for the business.

6. It is also utilized in the preparation of budgets and financial projections.

7. It also helps in the reconciliation of information between two sources of financial systems.

8. The accounted information can be shared with the external stakeholders with the intent for business

planning and growth.

9. Accounting does not focus on the activities about the capital budgeting.

10. It also helps in audit functions and curbs the internal weakness as it makes the systems accountable.

11. A business or an organization can prepare and work on several journals to maintain different accounts.

http://https/www.accountingtools.com/articles/2017/5/10/financial-position

http://https/www.accountingtools.com/articles/2017/5/10/financial-position

http://https/www.accountingtools.com/articles/what-is-cash-flow.html

http://https/www.accountingtools.com/articles/what-is-cash-flow.html

http://https/www.accountingtools.com/articles/2017/5/7/accounting-records

http://https/www.accountingtools.com/articles/2017/5/7/accounting-records

http://https/www.accountingtools.com/articles/2017/5/15/transaction

http://https/www.accountingtools.com/articles/2017/5/4/customer

http://https/www.accountingtools.com/articles/2017/5/16/supplier

http://https/www.accountingtools.com/articles/what-is-a-journal-entry.html

http://https/www.accountingtools.com/articles/what-is-a-journal-entry.html

http://https/www.wallstreetmojo.com/bookkeeping/

http://https/www.wallstreetmojo.com/bookkeeping/

http://https/www.wallstreetmojo.com/financial-information/

http://https/www.wallstreetmojo.com/financial-information/

http://https/www.wallstreetmojo.com/financial-projection/

http://https/www.wallstreetmojo.com/financial-projection/

http://https/www.wallstreetmojo.com/reconciliation/

http://https/www.wallstreetmojo.com/capital-budgeting/

http://https/www.wallstreetmojo.com/capital-budgeting/

12. A comprehensive accounting system ensures that the accounts of corporate expenses do not get mixed

with the personal accounts of vice presidents or managers. Such instances are generally referred to as

red flags.

ACTIVITIES

Word Puzzle

I D E N T I F Y I N G R A P E

N O R A G T K C W J O E U I A

F Z C V B J U D G E M E N T S

O I F R U K T Q Y L P A V G Y

R R W A R S A F U C L N A C T

M E G I Q D F G Y L R O I U S

A H H N F H I R T P O M N R N

T T T T I B R I P R O S T C O

I G I L N T E B C N M V Q T I

O N D A A H A S O X S Z U A S

N I U Q N R D C W A I O A R I

O T A R C C E B I T L T E I C

E N Z A E V W A Q N E S K K E

S U X C E F V N B M U Y G M D

I O D F H J K O L X S M A Y O

F C A S G N I R U S A E M I E

D C Q W E R T U Y I O P R O A

W A T E R A S I R A E T L P C

Find the following words that relate to accounting: IDENTIFYING, JUDGEMENTS, MEASURING

FINANCE, ACCOUNTING, USERS, INFORMATION, COMMUNICATING, ECONOMIC, DECISIONS

http://https/www.wallstreetmojo.com/accounting-system/

http://https/www.wallstreetmojo.com/accounting-system/

WEEK 1: LESSON 2

TOPIC: THE USERS OF ACCOUNTING INFORMATION

CONTENT

Internal Users of Accounting Information

Owners need to assess how well their business is performing. Financial statements provide information to owners about the profitability of the overall business as well as individual products and geographic segments. Owners are also interested in knowing how risky their business

is. Accounting information helps owners in assessing the level of stability in business over the years.

Managers need accounting information to plan, monitor and make business decisions. Managers need to allocate the financial, human and capital resources towards competing needs of the business

through the budgeting process. Managers rely on accounting data to form their business decisions such as

investment, financing and pricing decisions.

Employees are interested in knowing how well a company is performing as it could have implications for their

job security and income. Many employees review accounting information in the annual report just to get a better

understanding of the company’s business. Moreover, potential employees are also interested to learn about the

financial health of the organization they aspire to join in the future.

External Users of Accounting Information

Investors need to know how well their investment is performing. Investors primarily rely on the financial

statements published by companies to assess the profitability, valuation and risk of their investment, whether

they should hold, increase or decrease their investment.

Lenders use accounting information of borrowers to assess their credit worthiness, i.e. their ability to pay back

any loan. Lenders offer loans and other credit facilities on terms that are based on the assessment of financial

health of borrowers. On a lighter note, borrowers can only get a loan from lenders if they can prove that they

don’t need the money.

Suppliers need accounting information to assess the credit-worthiness of its customers before offering goods

and services on credit. Some suppliers only have a handful of customers. These customers could be very large

businesses themselves. Suppliers need accounting information of its key customers to assess whether their

business is in good health which is necessary for sustainable business growth.

Customers: Most consumers don’t care about the financial information of its suppliers. Industrial consumers

however need accounting information about its suppliers in order to assess whether they have the required

resources that are necessary for a steady supply of goods or services in the future. Continuity in supply of

quality inputs is essential for any business.

Tax Authorities determine whether a business declared the correct amount of tax in its tax returns.

Occasionally, tax authorities conduct audits of the tax returns filed by businesses in order to verify the

information with the underlying accounting records. Tax authorities also cross reference accounting information

of suppliers and consumers in order to identify potential tax evaders.

Government ensures that a company’s disclosure of accounting information is in accordance with the

regulations that are in place to protect the interest of various stakeholders who rely on such information in

forming their decisions. Government defines and monitors accounting thresholds such as sales revenue and net

profit to determine the size of each business for the purpose of ensuring that it complies with the relevant

employee, consumer and safety regulations.

Public: General public may also be interested in accounting information of a company. These could include

journalists, analysts, academics, activists and individuals with an interest in economic developments.

ACTIVITIES:

1. Compiling a file with the users of accounting information using pictures to depict all aspects.

2. Role – playing

3. Quiz

WEEK 1: LESSON 3

TOPIC: TRADITIONAL AND EMERGING CAREERS IN ACCOUNTING

CONTENT

COMMERCE & EDUCATION INDUSTRY

PUBLIC ACCOUNTANTS PUBLIC SECTOR

Finance Directors Chief Executive Officers

Company Accountants

Finance Managers Bank Managers

Treasury Managers

Tax Managers

Financial Controllers

Budget Controllers

Corporate Planners

Bank Officers Internal Auditors

Lecturers

Teachers

Accountants Tax Consultants

Management Consultants

Company Secretaries

Receivers Liquidators

Directors of Ministries Treasurers Inland Revenue Officers Financial

Officers Accounts Clerks

Auditors

ACTIVITIES

1. Students dressed to depict careers in accounting

2. Students talked about their choice of career in accounting.

3. Students collected five (5) advertisements of accounting jobs from the newspapers or other sources available.

WEEK 2: LESSON 1

TOPIC: ETHICAL PRINCIPLES OF ACCOUNTS: ETHICAL BEHAVIOUR & OBJECTIVITY

CONTENT

Integrity – A professional accountant should be straightforward and honest in all professional and business

relationships.

Objectivity – A professional accountant should not allow bias, conflict of interest or undue influence of others

to override professional and business judgments. This means as an accountant in business you must have

independence of mind and judgment. If you are asked or encouraged to become involved in unlawful activities,

you must refuse.

ACTIVITIES

1. Visit a business organization and do a five minutes interview with the Finance Manager/Accountant. Make

short notes of his advice.

2. Read up further to get a better understanding of ethical behaviour and objectivity.

3. Practice the behaviour and observe the end results. Make short notes of the change in behaviour.

WEEK 2: LESSON 2

TOPIC: ETHICAL PRINCIPLES OF ACCOUNTS: PROFESSIONAL COMPETENCE & DUE CARE

CONTENT

Professional Competence and Due Care - A professional accountant has a continuing duty to maintain

professional knowledge and skill at the level required to ensure that a client or employer receives competent

professional service based on current developments. This means that the accountant must always be kept abreast

of new developments in the field that are relevant to what he/she does. A professional accountant should act

diligently and in accordance with applicable technical and professional standards when providing professional

services.

ACTIVITIES





WEEK 2: LESSON 3

TOPIC: ETHICAL PRINCIPLES OF ACCOUNTS: CONFIDENTIALTY & PROFESSIONAL

BEHAVIOUR

CONTENT

Confidentiality - A professional accountant should respect the confidentiality of information acquired as a

result of professional and business relationships and should not disclosed any such information to third parties

without proper knowledge and specific authority unless there is a legal or professional right or duty to disclose.

Confidential information acquired as a result of professional and business relationships should not be used for

the personal advantage of the professional accountant or third parties.

Professional Behaviour - A professional accountant should comply with relevant laws and regulations and

should avoid any conduct that discredits the profession. This includes, ensuring, for example, that

advertisements made by his/her firm are truthful and are not made to deceive the public and rival firms.

ACTIVITIES





WEEK 3: LESSON 1

TOPIC: THE ACCOUNTING CYCLE

CONTENT

ACTIVITIES

1. Paste the steps of the accounting cycle in correct order.

2. Make a Word Search Puzzle on the accounting cycle.

3. Unscramble the letters to make the correct word of the accounting cycle.

(a) R O C S U E S O C U N T E M D (b) J A N O L R U S (c) L E R D E G

(e) L R A T I N A L E C A B (f) A I N F C L A I N T E N T M A S T E

WEEK 3: LESSON 2

TOPIC: TYPES OF BUSINESS ORGANISATION: SOLE TRADER

CONTENT

SOLE TRADER / SOLE PROPRIETOR

Ownership

This business is owned by an individual or a group acting as an individual.

Formation

The name of the business is registered with the Guyana Revenue Authority

and the relevant licence is obtained from the organization.

Source of Financing

Personal assets and saving of the owner of the business.

Legal Responsibility

The owner is accountable for all the debts of the business personally.

Management

The owner supervises the day to day affairs of the business.

Effect of Profit/Loss

The owner takes all profits and bears all losses.

ACTIVITIES

1. Role playing the sole trader.

2. Identifying sole traders in Guyana.

3. Conducting a quiz on sole traders.

WEEK 3: LESSON 3

TOPIC: TYPES OF BUSINESS ORGANISATION: PARTNERSHIP

CONTENT

PARTNERSHIP

Ownership

This business is owned by 2 – 20 individuals called partners.

Formation

This business is formed through Amalgamation Of Sole Traders or

Partnership Act or Partnership Agreement or Deed Of Partnership.

Source of Financing

Each partner contributes an agreed amount of capital towards the business.


Unless otherwise stated, each partner is responsible for a share of debts of

the business.

Management

Partners may or may not help to manage the day to day affairs of the

business; large businesses employ professional managers.


Partners share profits/losses according to Partnership Agreement

or Partnership Act.

ACTIVITIES

1. Role playing the partners of the business.

2. Identifying partnership businesses in Guyana.

3. Conducting a quiz on partnership business.

WEEK 4: LESSON 1

TOPIC: TYPES OF BUSINESS ORGANISATION: LIMITED LIABILITY COMPANIES

CONTENT

Ownership

This business is owned by a number of individuals called shareholders.

Formation

This business is formed by the Company Act or Certificate of Registration

after submitting the following documents: Memorandum of Association,

Articles of Association and Prospectus or Statement of Capital of Shareholders.

Source of Financing

Each Shareholder buys a number of shares at varying prices issued by the business.


The Company and not the Shareholders is responsible for the business’s debts.

Management

There is a clear separation of Management (Chairman & Board of Directors)

and Ownership (Shareholders).


Profits are shared via dividends but some profits are retained by the Company.

ACTIVITIES

1. Role playing the shareholders of a business.

2. Identifying limited liability companies in Guyana.

3. Conducting a quiz on limited liability companies.

WEEK 4: LESSON 2

TOPIC: TYPES OF BUSINESS ORGANISATION: CO-OPERATIVES

CONTENT

Ownership

This business is owned by a number of individuals called members.

Formation

This business is formed by the Co-operative Societies Act.

Source of Financing

Each member buys a number of shares at a fixed price issued by

the co-operative society.


The Co-operative Society and not the Members is responsible for

the debts.

Management

The members volunteer to run management committees, though

there may be a professional Manager.


Surplus is shared via dividends but some surplus is retained by the

Co-operative Society.

ACTIVITIES

1. Role playing the members of a co-operative.

2. Identifying co-operatives in Guyana.

3. Conducting a quiz on co-operatives.

WEEK 4: LESSON 3

TOPIC: TYPES OF BUSINESS ORGANISATION: NON-PROFIT ORGANISATIONS

CONTENT

Ownership

This business is owned by a number of individuals called members.

Formation

This business is formed by the members who have a common interest.

Source of Financing

Members pay entrance fee or life membership fee or subscription fee;

donations received from other individuals or business and fund-raising activities.


The Club and not the Members is responsible for the debts.

Management

The members volunteer to run management committees, though

there may be a professional Manager.


Surplus is retained in the business for the sustenance of itself.

ACTIVITIES

1. Role playing the members of a non-profit organisation.

2. Identifying non-profit organisations in Guyana.

3. Conducting a quiz on non-profit organisations.


EASTER TERM 2021

JANUARY, 2021

GRADE 10


WEEK 5: LESSON 1

TOPIC: TYPES OF BUSINESS ORGANISATION: MAIN FINANCIAL

STATEMENTS

CONTENT

Sole Trader

1. Income Statement (Trading & Profit & Loss Account)

2. Statement of Financial Position (Balance Sheet)

Partnership


2. The Appropriation Account

3. Current Account

4. Statement of Financial Position (Balance Sheet)

Limited Liability Company



3.Statement of Financial Position (Balance Sheet)

4. Cash Flow Statement

Co-operative

1. Income Statement (Income & Expenditure Account)



Non-Profit Organisation

1. Income Statement (Income & Expenditure Account)


ACTIVITIES

Collecting samples of financial statements of different types of business organizations.

WEEK 5: LESSON 2

TOPIC: THE ROLE AND IMPACT OF TECHNOLOGY ON THE ACCOUNTING

PROCESS

CONTENT

(A) Software currently being used in accounting:

Microsoft Excel Programme

Spreadsheets

Peachtree

Quickbooks

(B) Accounting processes which could be readily performed by the use of the computer, for

example: payroll, inventory control, receivables and payables schedules.

(C) Advantages of using the Computer in accounting:

Neat and tidy presentation.

Accurate information.

Quick accessibility.

Easy & ready to use.

Transparency.

(D) Disadvantages of using the Computer in accounting:

Very expensive.

Costly to maintain.

Must be free from dust.

Handle the computer and its peripheral devices with care.

Always store in a cool room or building.

ACTIVITIES:

1. What is a computer?

2. List 5 peripheral devices that are part of the computer to make the accounting process efficient

and effective?

3. Get a print out of the spreadsheet page and / or go on the computer and open the page.

4. Attempt to create an accounting record of your choice.

5. Tell your colleagues or write a report about your experience.

WEEK 5: LESSON 3

TOPIC: ACCOUNTING CONCEPTS

CONTENT

The Separate Entity Concept is also known as the Business Entity Concept which clearly

stated that the business and its owner are two distinct entities, for example: Steve Persaud and

Steve Jewellery World.

The Going-concern Concept states that a business would continue for a long time or indefinite

period, for example: Banks DIH Ltd operating for a very long time in Guyana.

The Accrual or Matching Concept outlines that net profit is the difference between revenues

earned and expenses incurred within the financial year and not the difference between the

revenue received and expenses paid for the year.

Expenses are considered incurred when services are used up, even though payments for the

expenses have not been made. For example: the monthly rental of a shop is $1 000. The yearly

rental expenses recorded in the books of accounts should be $12 000 ($1 000 x 12) although

actual payment made on rental was only $10 000. Rental expenses of $2 000 are considered

expenses incurred but not yet paid and must be accrued and added to the amount paid ($10 000 +

$2 000) to arrive at the total rental expenses incurred for the period under review. This same

principle is applied to revenues which are considered earned when goods are sold or services are

performed even though money has not been received.

ACTIVITIES

1. Give 3 examples of the Separate Entity Concept in your community of business.

2. State 3 businesses that are there for more than 5 years that you enjoy shopping from in

Georgetown.

3. Outline 2 examples of expenses and 2 examples of revenues that a business is likely to have

and apply the Accrual Concept to show your understanding.

WEEK 6: LESSON 1

TOPIC: THE ACCOUNTING CONVENTIONS

CONTENT

Prudence (Conservatism) Convention is the use of cautious accounting practices. Accountants

tend to understate rather than overstate the profits and assets of the business since all expected

losses are to be reported but not all expected gains. All gains are only reported when they are

realized.

According to this convention, if an accountant is faced with two alternatives of reporting an item,

the alternative which gives a lower profit or lower asset value should be chosen.

For example, when two values of the closing inventory are given, that is the cost is $50 000 and

the market value is $55 000, the lower value is chosen over the market value so that the profit

will not be overstated.

Consistency Convention states that when a business uses a certain method for accounting

treatment of an item for the financial year, it should maintained the same method of treatment of

the same item for other ensuing financial year thereafter too.

In other words, the business must maintained consistency in the treatment of the item for all

financial year as long as the item is in the business. For example, the methods of valuing

inventory and calculating depreciation of non-current assets should be the same throughout all

financial year.

However, this convention does not prevent changes to be made if there is a valid reason for

doing so, as long as the effects of such changes are disclosed.

Objectivity Convention explains that in the preparation of the financial reports, when the

method used is normally practiced and agreed upon, it is said to be objective. However, when the

financial reports are prepared according to our own methods and our own concepts which others

do not accept, it is said to be subjective.

The Objectivity Convention requires the accounting information to be recorded on a factual

basis. Therefore, the actual cost paid instead of the current market value is used. The cost stated

in the source document provides the objective evidence of the transaction. To be objective, each

entry in the accounts must be supported by documentary evidence.

ACTIVITIES

Prepare a speech to be delivered to newly accredited accountants encouraging them to observe

the accounting conventions. Use examples as far as practicable to clarify the concepts explicitly.

WEEK 6: LESSON 2

TOPIC: THE BALANCE SHEET / STATEMENT OF FINANCIAL POSITION

CONTENT

Definition of Balance Sheet / Statement of Financial Position

Balance Sheet is a financial statement showing assets, liabilities and capital of a business at a

particular date.

Purpose of Balance Sheet / Statement of Financial Position

Balance Sheet is prepared to determine the financial position or status of a business at a specific

date.

Components of Balance Sheet / Statement of Financial Position

Assets – resourced owned by the business, for example: office equipment and cash.

Liabilities – resources owed for by the business, for example: mortgages and accounts payables.

Capital or Owner’s Equity – resources supplied to the business, for example: cash and other

assets.

ACTIVITIES

1. Identify a small business in your community and list all the assets and liabilities.

2. Identify a large business in Guyana and list all the assets and liabilities.

3. Classify the following into assets and liabilities.

Office machinery Loan from GNCB

Bank Overdraft Cash

Motor vehicles Furniture and fittings

Accounts payable Accounts receivable

Inventory Mortgages

WEEK 6: LESSON 3


CONTENT

Balance Sheet Equation /The Accounting Equation

The relationship between assets, liabilities and capital can be expressed in terms of an equation

called the

accounting equation or the balance sheet equation.

Resources: what they are = Resources: who supplied them

Assets = Capital + Liabilities

ACTIVITIES

Seq Assets Liabilities Capital

# $ $ $

1 ? 3 000 12 000

2 10 000 5 000 ?

3 16 000 ? 7 000

4 ? 4 600 15 800

5 19 200 6 300 ?

6 20 800 ? 12 900

7 ? 2 550 6 730

8 22 640 9 780 ?

9 25 350 ? 10 460

10 ? 7 140 12 850

WEEK 7: LESSON 1


CONTENT

Preparation of Balance Sheet / Statement of Financial Position

GLOBAL STATIONERY MALL

Statement of Financial Position (Balance Sheet)

As at 31 – 12 – 2019

ASSETS $ CAPITAL $

Land and Building 25 000 Owner’s Equity 30 000

Office Equipment 10 000 LIABILITIES

Closing Inventory 6 000 Mortgages 15 000

Accounts Receivable 4 000 Accounts payable 5 000

Bank 3 000

Cash 2 000

50 000 50 000

Simple Balance Sheet in Horizontal Style

GLOBAL STATIONERY MALL


As at 31 – 12 – 2019

ASSETS $ $ $

Land and Building 25 000

Office Equipment 10 000

Closing Inventory 6 000

Accounts Receivable 4 000

Bank

3 000

Cash

2 000 50 0000

Less: LIABILITIES

Mortgages 15 000

Accounts Payable 5 000

20 000

30 000

CAPITAL

Owner’s Equity 30 000

Simple Balance Sheet in Vertical Style

ACTIVITIES

Prepare Mr. Rabindranauth Singh’s Statement of Financial Position (Balance Sheet) as at June

30, 2020 from

the following information:

Items $

Premises 45 570

Inventory 3 290

Loan from NBIC 26 370

Cash in hand 5 345

Accounts payable 13 925

Cash at bank 12 780

Machinery 38 960


Accounts receivable 2 630

Use both styles of presentation to prepare the Statement of Financial Position (Balance Sheet).

WEEK 7: LESSON 2


CONTENT

Assets

Non Current Assets have a long life and are to be used in the business, for example: Machinery

Current Assets are assets that will be turned in cash within one year, for example: closing

inventory. Liabilities

Non Current Liabilities are debts that will be settled in the longer term, which is usually more

than a year, for example: loan from a bank

Current Liabilities are debts owed by the business that will be paid within one year, for

example: accounts payable.

ACTIVITIES

Classify the following under the correct headings:

Non Current Assets Current Assets Non Current Liabilities Current Liabilities

Cash in hand Bank Overdraft

Loan from GNCB Motor Vehicles

Office Machinery Accounts Receivable

Accounts Payable Mortgages

Closing Inventory Bank Balance

WEEK 7: LESSON 3


CONTENT

Preparation of Balance Sheet / Statement of Financial Position

WILLIAM STATIONERY PLUS


As at 31 – 12 – 2019

NON CURRENT

ASSETS

$ $ CAPITAL $ $

Land and Building 25

000

Owner’s Equity

30 000

Office Equipment 10

000

LIABILITIES

35

000 NON CURRENT

LIABILITIES


Mortgages 15 000


CURRENT LIABILITIES

Bank 3 000


Cash 2 000

20 000 15

000

50

000

50 000

Classified Balance Sheet in Horizontal Style

WILLIAM STATIONERY PLUS


As at 31 – 12 – 2019

NON CURRENT ASSETS $ $

Land and Building 25 000

Office Equipment 10 000 35 000

CURRENT ASSETS



Bank 3 000

Cash 2 000

15 000

Less: CURRENT LIABILITIES


Working Capital

10 000 45 000

Less: NON CURRENT LIABILITIES

Mortgages

15 000 30 000

FINANCED By:


Classified Balance Sheet in Vertical Style

ACTIVITIES

Prepare Mrs. C. Lake’s Statement of Financial Position (Balance Sheet) as at June 30, 2020 from

the following information:

Items $

Premises 45 570

Inventory 3 290

Loan from NBIC 26 370

Cash in hand 5 345

Accounts payable 13 925

Cash at bank 12 780

Machinery 38 960


Accounts receivable 2 630

Use both styles of presentation to prepare the Statement of Financial Position (Balance Sheet).

WEEK 8: LESSON 1


CONTENT

Effect of transactions on the Statement of Financial Position (Balance Sheet)

The introduction of capital.

On 1 July 2020, D. George started his business with $25 000 in a bank account for his business.

The Statement of Financial Position (Balance Sheet) would appear:

D. George


As at 01 – 07 – 2020

ASSET

Bank

CAPITAL

Owner’s Equity

$

25 000

25 000

ACTIVITIES

On 1 September 2020, S. Rampershad started her business with $30 500 cash.

Prepare her Statement of Financial Position (Balance Sheet).

The purchase of an asset by cheque.

On 3 July 2020, D. George bought office equipment for $5 000 by cheque.


D. George


As at 01 – 07 – 2020

ASSETS

Office Equipment

Bank

CAPITAL

Owner’s Equity

$

5 000

20 000

25 000

25 000

ACTIVITIES

On 5 September 2020, S. Rampershad bought motor vehicle costing $10 500 cash.


WEEK 8: LESSON 2


CONTENT


The purchase of an asset and the incurring of a liability

On 6 July 2020, D. George bought some goods for $3 000 on credit from J. Small.


D. George


As at 06 – 07 – 2020

ASSETS

Office Equipment

Inventory

Bank


Accounts Payable

CAPITAL

Owner’s Equity

$

5 000

3 000

20 000

28 000

3 000

25 000

25 000

ACTIVITIES

On 8 September 2020, S. Rampershad bought goods costing $4 000 on credit from P. Smith.


Sale of an asset on credit

On 10 July 2020, D. George sold some goods to G. Whyte on credit for $1 000.


D. George


As at 10 – 07 – 2020

ASSETS

Office Equipment

Inventory

Accounts Receivable

Bank


Accounts Payable

CAPITAL

Owner’s Equity

$

5 000

2 000

1 000

20 000

28 000

3 000

25 000

25 000

ACTIVITIES

On 11 September 2020, S. Rampershad sold goods to C. Persaud on credit $1 500.


WEEK 8: LESSON 3


CONTENT


Sale of an asset for immediate payment

On 13 July 2020, D. George sold some goods cash $500 to B. Ramsingh.


D. George


As at 13 – 07 – 2020

ASSETS

Office Equipment

Inventory

Accounts Receivable

Bank

Cash


Accounts Payable

CAPITAL

Owner’s Equity

$

5 000

1 500

1 000

20 000

500

28 000

3 000

25 000

25 000

ACTIVITIES

On 14 September 2020, S. Rampershad sold goods $750 to A. Mac Koy paying by cheque.


WEEK 9 LESSON 1

TOPIC: LEDGERS

CONTENT

Significance Of Ledgers

Types Of Ledgers

ACTIVITIES

1. Text or call a friend explaining to him / her why it is important to have Ledgers in a

businesses.

2. Fill in the missing words appropriately.

The ledgers are the third step of the accounting cycle.

All businesses use the ledgers.

The ledgers are done in a book or on the computer (Microsoft Excel Programme).

The ledgers contain different classes of accounts.

The ledgers are very transparent.

General ledger contains nominal, real, liability and capital accounts.

Sales ledger (Accounts Receivable Ledger) contains names of persons who bought goods

from the business on credit.

Purchases ledger (Accounts Payable Ledger) contains names of persons whom the business

bought goods on credit from to sell to customers.

LEDGERS

WEEK 9 LESSON 2

TOPIC: LEDGERS

CONTENT

Significance Of Accounts

ACTIVITIES

1. Text or call a friend explaining to him / her why businesses must always keep accounts.

2. Fill in the missing words appropriately.

The account is a very important component of the accounting process.

All businesses use accounts in the ledgers to record information from business transactions.

The account is used to give a correct balance in the ledgers.

Classification of Accounts

Nominal – expenses and revenues accounts.

Real – asset accounts.

Personal – accounts receivable and accounts payable accounts.

ACCOUNTS

WEEK 9 LESSON 3

TOPIC: LEDGERS

CONTENT

Significance Of Double Entry System

Double Entry System Of Assets

Rule No. 1

Account To Record Entry in the account

Asset An Increase Debit

A Decrease Credit

Transaction

2020 – 06 – 04: Mr. N. Allen bought a motor van by cash $7 360.

Mr. N. Allen

General Ledger

Accounts to be opened are:

1. Motor van * Asset + Dr. $7 360

2. Cash * Asset – Cr. $7 360

Double – two (2)

Entry – to record / write

System – computer / book

General Rule: Record once on the debit side of an account and once on the credit side of another

account respectively in the ledgers.

Double – two (2)



Assets – resources owned by the business, for example: office equipment.

Mr. N. Allen

General Ledger

DR. Motor Van A/C

CR.

DR. Cash A/C

CR.

ACTIVITIES

2020 – 06 – 09: Mr. N. Allen bought a computer by cheque $3 500.

2020 – 06 – 14: Mr. N. Allen bought furniture by cash $460.

2020 – 06 – 16: Mr. N. Allen paid for machinery by cheque $920.

DATE DETAILS FOLIO AMT DATE DETAILS FOLIO AMT

2020

06-04

Cash

$

7 360

$


$ 2020

06-04

Motor van

$

7 360

WEEK 10 LESSON 1

TOPIC: LEDGERS

CONTENT

Double Entry System Of Capital

Rule No. 2


Capital An Increase Credit

A Decrease Debit

Transaction

2020 – 06 – 01: Mr. N. Allen started his business with $10 500 cash.

Mr. N. Allen

General Ledger


1. Capital * Owner’s Equity + Cr. $10 500

2. Cash * Asset + Dr. $10 500

Double – two (2)



Capital – resources supplied to the business by its owner, for example: cash and other

assets.

Mr. N. Allen

General Ledger

DR. Capital A/C

CR.

DR. Cash A/C

CR.

ACTIVITIES

2020 – 07 – 01: Mrs. B. Whyte started her business with $5 370 cash.

2020 – 10 – 01: Mr. P. Mohamed started his business with $12 450 in the bank.

2020 – 12 – 01: Shastri Ramkissoon started a business, Quality Stationery Plus with $13 550 in

the bank

and $6 390 cash.


$ 2020

06-01

Cash

$

10 500


2020

06-01

Capital

$

10 500

$

WEEK 10 LESSON 2

TOPIC: LEDGERS

CONTENT

Double Entry System Of Liabilities

Rule No. 3


Liabilities An Increase Credit

A Decrease Debit

Transaction

2020 – 06 – 10: Mr. N. Allen borrowed $4 550 cash from GNCB.

Mr. N. Allen

General Ledger


1. GNCB * Liabilities + Cr. $4 550

2. Cash * Asset + Dr. $4 550

Double – two (2)



Liabilities – resources owed for (debts incurred) by the business, for example: accounts

payable.

Mr. N. Allen

General Ledger

DR. GNCB A/C

CR.

DR. Cash A/C

CR.

ACTIVITIES

2020 – 06 – 12: Mr. N. Allen bough office furniture on credit from Ramroop Furniture Store

costing $2 680.

2020 – 06 – 18: Mr. N. Allen purchased on credit machinery valued $3 000.

2020 – 06 – 26: Mr. N. Allen bought goods on credit from the following: G. Fox $1 040, J. Small

$1 360 and K. Stream $1 700.


$ 2020

06-10

Cash

$

4 550


2020

06-10

GNCB

$

4 550

$

WEEK 10 LESSON 3

TOPIC: LEDGERS

CONTENT

Double Entry System Of Expenses

Rule No. 4


Expense An Increase Debit

A Decrease Credit

Transaction

2020 – 06 – 13: Mr. N. Allen paid travelling by cash $1 680.

Mr. N. Allen

General Ledger


1. Travelling * Expenses + Dr. $1 680

2. Cash * Asset – Cr. $1 680

Mr. N. Allen

General Ledger

DR. Travelling A/C

CR.

DR. Cash A/C

CR.

ACTIVITIES

2020 – 06 – 19: Mr. N. Allen paid telephone bill by cheque $2 050.

2020 – 06 – 25: Mr. N. Allen paid general expenses by cash $3 000.

2020 – 06 – 30: Mr. N. Allen paid staff by cheque $4 260.


2020

06-13

Cash

$

1 680

$


$ 2020

06-13

Travelling

$

1 680

GRADE 10


WEEK 11 LESSON 1

TOPIC: LEDGERS

CONTENT

Double Entry System Of Revenue

Rule No. 5


Revenue An Increase Credit

A Decrease Debit

Transaction

2020 – 06 – 17: Mr. N. Allen received commission $5 170 cash.

Mr. N. Allen

General Ledger


1. Commission Received * Revenue + Cr. $5 170

2. Cash * Asset + Dr. $5 170


EASTER TERM 2021

JANUARY, 2021

Double – two (2)



Revenue – other sources of income earned by the business, for example: interest received from bank.

Mr. N. Allen

General Ledger

DR. Commission Received A/C CR.

DR. Cash A/C CR.

ACTIVITIES

2020 – 06 – 21: Mr. N. Allen received a discount of $2 110 by cash.

2020 – 06 – 24: Mr. N. Allen received interest on his business bank account $3 630.

2020 – 06 – 27: Mr. N. Allen received rent by cheque $1 980 for subletting part of his premises.


$ 2020

06-17

Cash

$

5 170


2020

06-17

Commission

Received

$

5 170

$

WEEK 11 LESSON 2

TOPIC: LEDGERS

CONTENT

Balancing Off Accounts

Now let us work the exercise given below.

You are to enter up the necessary accounts in the respective ledgers of Niomi Khan for the month of May, 2020

from the following transactions and balance off the accounts.

2020

05 – 01 : Niomi Khan started business with $2 500 in the bank.

05 – 03 : Bought goods on credit from: D. Ellis $540; C. Mendez $87; K. Gibson $76.

05 – 06 : Sold goods on credit to: C. Bailey $430; B. Hughes $62; H. Spencer $176.

05 – 08 : Sold goods for cash $500.

05 – 11 : Paid rent by cash 120.

05 – 13 : C. Bailey paid us $250 by cheque on account.

05 – 16 : H. Spencer paid us $150 by cash.

05 – 19 : We paid the following by cheque: K. Gibson $76; D. Ellis $370 on account.

05 – 21 : Bought stationery for cash $60.

05 – 23 : Bought goods on credit from: D. Ellis $145; C. Mendez $234.

05 – 26 : Paid rent by cheque $120.

Steps to be observed when balancing off accounts:

Step 1: Add the debit and credit sides of the account separately.

Step 2: Subtract the smaller side from the bigger side and enter the difference on the smaller side of the account

on the last day of the month.

Step 3: Equalize both sides of the account.

Step 4: Show the opening balance on the first day of the new month in the account.

05 – 28 : Sold goods on credit to: C. Bailey $90; B. Hughes $110; H. Spencer $128.

05 – 30 : Paid C. Mendez by cash $87.

Niomi Khan

General Ledger


1. Capital

2. Bank

3. Purchases

4. Sales

5. Cash

6. Rent

7. Stationery

Niomi Khan

Purchases Ledger


1. D. Ellis

2. C. Mendez

3. K. Gibson

Niomi Khan

Sales Ledger


1. C. Bailey

2. B. Hughes

3. H. Spencer

Niomi Khan

General Ledger

DR. Capital A/C CR.

DR. Bank A/C CR.

Niomi Khan

General Ledger


2020 $ 2020 $

05-31 Balance c/d 2 500 05-01 Bank 2 500

2 500

2 500

06-01 Balance b/d 2 500


2020 $ 2020 $

05-01 Capital 2 500 05 – 19 K. Gibson

76

05-13 C. Bailey

250 05 – 19 D. Ellis

370

05 – 26 Rent

120

05 – 31 Balance c/d 2 184

2 750

2 750

06 – 01 Balance b/d 2 184

DR. Purchases A/C CR.

ACTIVITIES

You are required to complete the remainder of the accounts for Niomi Khan.

For more practice exercises refer to Principles of Accounts for the Caribbean 6th Edition.


2020 $ 2020 $

05 – 03 D. Ellis

540 05 – 31 Balance c/d 1 082

05 – 03 C. Mendez

87

05 – 03 K. Gibson

76

05 – 23 D. Ellis

145

05 – 23 C. Mendez

234

1 082

1 082

06 – 01 Balance b/d 1 082

WEEK 11 LESSON 3

TOPIC: TRIAL BALANCE

CONTENT

Trial Balance is a list of account titles and their balances in the debit and credit columns at a specific date.

Uses of Trial Balance

1. To check the book ‘balance’ that is, that every debit entry has been accompanied by a credit entry.

2. To ascertain the net amount of error(s), should an error(s) have been made.

3. As a basis form which the financial statements are prepared that is, trading account, profit and loss account

(income statement) and the statement of financial position (balance sheet).

Preparation of Trial Balance

Shaw Stationery Store

Trial Balance

As at 31 – 03 – 2020

Account Titles Dr

$

Cr

$ Cash 9 090

Bank 4 930

Capital 17 500

Opening Inventory 1 230

Purchases 19 996

Sales 19 850

Sales Returns 285

Purchases Returns 3 207

Office Furniture 15 500

Loan from IPED 10 500

Discount Allowed 220

Discount Received 519



Office Expenses 1 350

Drawings 1 000

56 346 56 346

Always remember the balances are taken from the accounts in the ledgers.

ACTIVITIES:

1. Prepare the Trial Balance of Niomi Khan as on 31 – 05 – 2020 from the given accounts.

2. From the following list of balances, prepare a trial balance as on 31 – 12 – 2020 for Miss Anita Hall.

Account Titles $

Plant and machinery

Motor vehicles

Premises

Wages

Purchases

Sales

Rent received

Telephone

Accounts payable

Accounts receivable

Bank overdraft

Capital

Drawings

General expenses

Electricity Charges

Motor expenses

21 450

26 000

80 000

42 840

119 856

179 744

3360

3 600

27 200

30 440

2 216

131 250

10 680

3 584

2 960

2 360

WEEK 12 LESSON 1

TOPIC: SOURCE DOCUMENT – PURCHASES INVOICE

CONTENT

Source Document is a written document that provides information from which accounting records can be

prepared. It provides evidence that a particular transaction took place.

Purchases Invoice is a document received by the purchaser showing details of goods bought and their prices.

Your Purchase Order: # 978

GIFTLAND OFFICE MAX

Lot 13 A Water & Holmes Streets

‘Georgetown

04 – 07 – 2020

Purchases Invoice # 684


Lot 8 Endeavour

Leguan

Quantity Description Per Unit

$

Total

$

15

15

14

20

6

Pilot Pens

Exercise Books

Rulers

Pencils

Calculators

200

65

40

10

1 900

3 000

975

560

200

11 400

Less 10% Trade Discount

16 135

1 614

14 521

ACTIVITIES:

You are required to:

1. Prepare six purchases invoices from suppliers you bought stationery (goods) from in Georgetown.

2. Use the month of October, 2020 and spread out the purchases/dates, eg: 5, 8, 13, 17, 22 and 27.

3. Each invoice must have five items that you bought for resale. Price must be original.

4. Three of the invoices will have trade discounts of your choice, eg: 7%, 13%, 18% and the others will not.

5. One invoice with trade discount and one without will be from the same supplier.

6. Your invoices must be completed like the example shown above.

WEEK 12 LESSON 2

TOPIC: BOOKS OF ORIGINAL ENTRY – PURCHASES JOURNAL

CONTENT

Books Of Original Entry are the books where the first entry of a transaction is entered. Sometimes these

books are referred to as ‘books of prime (first) entry.’

Purchases Journal is used to record all credit purchases from accounts payable.

SHAW STATIONERY STORE

PURCHASES JOURNAL Page 45

Date Names Of Accounts Payable Invoice # Folio Amount

2020

07-04

Giftland Office Max

684

PL 30

$

14 521

07-31 Transferred to Purchases A/c GL 4 14 521

ACTIVITIES

You are required to record your six purchases invoices in the purchases journal on page 60.

WEEK 12 LESSON 3

TOPIC: LEDGER – PURCHASES LEDGER/ ACCOUNTS PAYABLE LEDGER

AND GENERAL LEDGER

CONTENT


PURCHASES LEDGER

DR. Giftland Office Max A/C Page 30 CR.


GENERAL LEDGER

DR. Purchases A/C Page 4 CR.

ACTIVITIES

Prepare your Purchases Ledger, it must contain five personal accounts and show your Purchases Account in the

General Ledger.


2020 $ 2020 $

07-31 Balance c/d 14 521 07-04 Purchases PJ 45 14 521 14 521 14 521 08-01 Balance b/d 14 521


2020 $ 2020 $

07-31 Total credit PJ 45 14 521 07-31 Balance c/d 14 521

purchases for

the month

14 521 14 521

08-01 Balance b/d 14 521

WEEK 13 LESSON 1

TOPIC: SOURCE DOCUMENT – SALES INVOICE

CONTENT

Sales Invoice is a document showing the details of goods sold and the prices of those goods.

Your Sales Order # 2575


Lot 8 Endeavour

Leguan

10 – 07 – 2020

Sales Invoice # SSS - 001

Nalita Hardat

Lot 10 Endeavour

Leguan


$

Total

$

3

3

2

6

Exercise Books

Pilot Pens

Rulers

Pencils

100

240

100

20

300

720

200

120 1 340

ACTIVITIES:


1. Prepare six sales invoices for customers you sold stationery (goods) to in your community.

2. Use the month of October, 2020 and spread out the sales/dates.

3. Each invoice must have five items that you sold them. Price must be original.

4. Three of the invoices will have trade discounts of your choice and the others will not.

5. One invoice with trade discount and one without will be from the same customer.

6. Your invoices must be completed like the example shown above.

WEEK 13 LESSON 2

TOPIC: BOOKS OF ORIGINAL ENTRY – SALES JOURNAL

CONTENT Sales Journal is used to record all credit sales to accounts receivable.


SALES JOURNAL Page 50

.

ACTIVITIES

You are required to record your six sales invoices in the sales journal on page 70.

Date Names Of Accounts Receivable Invoice # Folio Amount

2020

07-10

Nalita Hardat

SSS – 001

SL 20

$

1 340

07-31 Transferred to Sales A/c GL 5 1 340

WEEK 13 LESSON 3

TOPIC: LEDGER – SALES LEDGER/ ACCOUNTS RECEIVABLE LEDGER

AND GENERAL LEDGER

CONTENT


SALES LEDGER

DR. Nalita Hardat A/C Page 20 CR.


GENERAL LEDGER

DR. Sales A/C Page 5 CR.

ACTIVITIES

Prepare your Sales Ledger, it must contain five personal accounts and show your Sales Account in the

General Ledger.


2020 $ 2020 $

07-10 Sales SJ 50 1 340 07-31 Balance c/d 1 340

1 340 1 340

08-01 Balance b/d 1 340


2020 $ 2020 $

07-31 Balance c/d 1 340 07-31 Total credit SJ 50 1 340

sales for

the month

1 340 1 340 08-01 Balance b/d 1 340

WEEK 14 LESSON 1

TOPIC: SOURCE DOCUMENT – DEBIT NOTE

CONTENT Debit Note is a document sent to a supplier showing allowance given for unsatisfactory

goods.

GIFTLAND OFFICE MAX

Lot 13 A Water & Holmes Streets

‘Georgetown

2020 – 07 – 05

Debit Note # 100 / AAS


Lot 8 Endeavour

Leguan


$

Total

$

1

2

4

Calculator

Rulers

Pilot Pens

1 900

40

200

1 900

80

800

Less 10% Trade Discount

2 780

278

2 502

ACTIVITIES:


1. Prepare three debit notes that you received from your suppliers in Georgetown for faulty goods.

2. Use the month of October, 2020 and spread out the return dates, eg: 6, 9, 14, 18, 23 and 28.

3. Each debit note must have three items that you have returned to your supplier.

4. Each debit note must be for a supplier chosen.

5. Your debit note must be completed like the example shown above.

WEEK 14 LESSON 2

TOPIC: BOOKS OF ORIGINAL ENTRY – PURCHASES RETURNS JOURNAL

CONTENT

Purchases Returns Journal is used to record goods returned to suppliers.


PURCHASES RETURNS JOURNAL Page 55

Date Names Of Accounts Payable Debit Note # Folio Amount

2020

07-05

Giftland Office Max

100 / ASS

PL 30 $ 2 505

07-31 Transferred to Purchases Returns A/c GL 6 2 505

ACTIVITIES

You are required to record your three debit notes in the purchases returns journal on page 80.

WEEK 14 LESSON 3

TOPIC: LEDGER – PURCHASES LEDGER/ ACCOUNTS PAYABLE LEDGER

AND GENERAL LEDGER

CONTENT


PURCHASES LEDGER

DR. Giftland Office Max A/C Page 30 CR.


GENERAL LEDGER

DR. Purchases Returns A/C Page 6 CR.

ACTIVITIES

Update your Purchases Ledger by inserting the purchases returns in the three affected personal accounts and

show your Purchases Returns Account in the General Ledger.


2020 $ 2020 $

07 -05 Purchases PRJ 55 2 505 07-04 Purchases PJ 45 14 521 Returns

07-31 Balance c/d 12 016

14 521 14 521 08-01 Balance b/d 12 016


2020 $ 2020 $

07-31 Balance c/d 2 505 07-31 Total returns for PRJ 55 2 505

the month

2 505 2 505

08-01 Balance b/d 2 505

WEEK 15 LESSON 1

TOPIC: SOURCE DOCUMENT – CREDIT NOTE

CONTENT

Credit Note is a document sent to a customer showing allowance given by the supplier in respect of

unsatisfactory goods.


Lot 8 Endeavour

Leguan

2020 – 07 – 11

Credit Note # 101

Nalita Hardat

Lot 10 Endeavour

Leguan


$

Total

$

1

1

Exercise Book

Pencil

100

20

100

20 120

ACTIVITIES:


1. Prepare three credit notes that you gave to customers for faulty goods they have returned.

2. Use the month of October, 2020 and spread out the dates of your choice.

3. Each credit note must have three items that the customers have returned to the business.

4. Each credit note must be for a customer chosen.

5. Your credit note must be completed like the example shown above.

WEEK 15 LESSON 2

TOPIC: BOOKS OF ORIGINAL ENTRY – SALES RETURNS JOURNAL

CONTENT

Sales Returns Journal is used to record goods returned to the business by its customers.


SALES RETURNS JOURNAL Page 60

ACTIVITIES

You are required to record your three credit notes in the sales returns journal on page 90.

Date Names Of Accounts Receivable Credit Note # Folio Amount

2020

07-11

Nalita Hardat

101

SL 20

$

120

07-31 Transferred to Sales Returns A/c GL 7 120

WEEK 15 LESSON 3

TOPIC: LEDGER – SALES LEDGER/ ACCOUNTS RECEIVABLE LEDGER

AND GENERAL LEDGER

CONTENT


SALES LEDGER

DR. Nalita Hardat A/C Page 20 CR.


GENERAL LEDGER

DR. Sales Returns A/C Page 5 CR.

ACTIVITIES

Update your Sales Ledger by inserting the sales returns in the three affected personal accounts and show your

Sales Returns Account in the General Ledger.


2020 $ 2020 $

07-10 Sales SJ 50 1 340 07-11 Sales Returns SRJ 60 120

07-31 Balance c/d 1 220 1 340 1 340

08-01 Balance b/d 1 220


2020 $ 2020 $

07-31 Total sales SRJ 60 120 07-31 Balance c/d 120

returns for

the month

120 120

08-01 Balance b/d 120

GRADE 10 SUBJECT: PRINCIPLES OF ACCOUNTS WEEK 1: …

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