Course Profile Introduction to Financial Accounting, Grade 11,
University/College Preparation, Public

Unit 5: Technology and Financial Statement Analysis

Time: 32 hours

Activity 5.1 | Activity 5.2 | Activity 5.3

Unit Description

Students assess the effect of technology on accounting. The use of computers in BAF3M is not only essential but also mandatory (Expectations AF2.06, AF3.08). The use of spreadsheet software is recommended for Activities 2 and 3. Note that the use of technology in this unit can be approached in one of two ways: as a separate unit, or integrated with Units 1 through 4. The integrated approach addresses the constraint that lab time might be available in one to two day increments.

Strand(s) & Learning Expectations

Strand(s): The Objectives of Accounting; Accounting Fundamentals; Financial Analysis, Control and Decision Making

Unit Synopsis Chart

Activity	Time	Expectations	Assessment	Tasks
5.1 Using Accounting Software	15 hours	OAV.02, OA1.06, AFV.01, AFV.02, FV.03, AFV.04, AF1.02, AF2.06, AF3.08, AF4.01, AF4.02, AF4.03	Knowledge/ Understanding Thinking/Inquiry Application Communication	Using Accounting Software: 5.1.1 The Basics 5.1.2 A Merchandising Perspective 5.1.3 Putting it all Together 5.1.4 Technology: Challenge and Opportunity
5.2 Financial Statement Analysis	10 hours	FAV.02, FAV.03, FA2.01, FA2.02, FA2.04, FA2.05, FA3.01	Knowledge/ Understanding Thinking/Inquiry Communication Application	Using Spreadsheets: 5.2.1 Financial statements analysis 5.2.2 Ratio analysis 5.2.3 Case study
5.3 Budgeting and Other Control Measures	7 hours	FAV.01, FA1.02, FA1.03, FA1.05	Knowledge/ Understanding Thinking/Inquiry Application Communication	5.3.1 Budgeting 5.3.2 Control Measures

Accommodations

· The teacher should take into consideration the student’s IEP for specific accommodations and suggestions that address the student’s learning needs.

· Extensive suggestions for accommodations can be found in The Curriculum Planner K-12

· Introduction to Information Technology in Business, BTT1O/2O, both the Catholic and Public Course Profiles, provides an extensive source of remedial work for the student coming to this course without a base of prior knowledge. These courses can be downloaded from – http://www.curriculum.org.

· Suggestion for ESL and Gifted Accommodations are in the Overview.

Activity 5.1: Using Accounting Software

Time: 900 minutes

Description

It is important for students to understand how the various modules of accounting software packages work. (AF1.01 - Explain the need for special journals and subsidiary ledgers e.g., sales and purchases journals, A/R and A/P ledgers). Students complete the accounting cycle for a service business using computerized accounting software. In doing so, students become proficient in setting up accounts, entering journal entries, and generating financial reports in a computerized environment. Students then extend their learning by completing the cycle for a merchandising business per expectation AF3.08. In doing so, students use the Purchases and Sales modules of the program which in turn illustrate the need for and importance of subsidiary ledgers.

Strand(s) & Learning Expectations

Strand(s): The Objectives of Accounting, Accounting Fundamentals

Overall Expectations

OAV.02 - demonstrate an understanding of the regulatory and ethical framework of accounting;

OAV.04 - describe professional accounting designations and career opportunities;

AFV.01 - analyse the similarities and differences in the accounting procedures and principles for a service business, a merchandising business, and a manufacturing business;

AFV.02 - apply the basic procedures and principles for the accounting cycle for a service business;

AFV.03 - apply the basic procedures and principles of the accounting cycle for a merchandising business;

AFV.04 - assess the impact of technology on the accounting functions in business.

Specific Expectations

AF1.02 - explain the need for special journals and subsidiary ledgers;

AF2.06 - demonstrate the skills required to record a service company’s transactions and produce the financial statements;

AF3.08 - demonstrate an ability to record a merchandising company’s transactions and produce the financial statements using accounting software;

AF4.01 - distinguish between the steps in a computerized and a manual accounting cycle;

AF4.02 - describe ways in which technology can affect the accounting function;

AF4.03 - explain the advantages and disadvantages of technology as it affects accounting in service merchandising and manufacturing settings.

Prior Knowledge & Skills

· The teacher needs to assess the computer literacy of the class. Based on this diagnostic assessment, the teacher
may determine that a tutorial on essential skills is required.

· Before proceeding to task 5.1.1, ensure students have completed Unit 1 of the course.

· Before proceeding to task 5.1.2, ensure students have completed Unit 2 of the course.

Planning Notes

· Tasks 5.1.1-3 require approximately 12 hours of computer lab time.

· The teaching and learning strategies for tasks 5.1.1-3 are taken from the CGA School Accounting Modules, 4th ed. (SAM) (see Resources). This is a free resource provided by the Certified General Accountants of Canada. The modules are written specifically for Simply Accounting, version 7.0.

· Simply Accounting Version 8.0 and previous versions, are currently available to high schools in Ontario free of charge. However, it is acceptable to use other computerized accounting software packages (see Resources). It is the process of using software, not the specifics of the particular software that is important.

· Teachers may prefer to use version 7.0 while using the 4th ed. of SAM. If using version 8.0, some very minor modifications to Computer Instructions in the Student’s Manual are necessary.

· SAM does an excellent job in addressing the specific expectations of tasks 1-3. However, it is only one of many resources that could be used to teach students about computerized accounting. The major advantage to SAM is its simplicity. While other resources are very detailed and more comprehensive, the focus of SAM is to give students a very basic and overall introduction to computerized accounting. In addition, it is a free resource and photocopying for students is allowed. Finally, teachers are cautioned that 15 hours are budgeted for this activity. Therefore, it is impossible to teach and apply the numerous features and intricacies of the software; note there is opportunity to expand student learning in the Grade 12 accounting courses.

· It is recommended that teachers obtain and review other texts, in addition to SAM, for both resource use and alternative approaches to cover the specific expectations of tasks 1-3. In the teaching and learning strategies, suggestions using other texts will be identified. Also, task 5.1.3 includes an Activity that highlights other features of Simply Accounting. This is best achieved by using a comprehensive text resource (see Resources).

· For modules 1-3 of SAM, teachers have the option of having students first record the transactions manually. The recommended approach is to do the transactions manually for the first module before entering the transactions on the computer. The reasons for this are:

· It serves as excellent review for Unit 1 of the course. Teachers are encouraged to evaluate the manual portion of Module 1 (see Evaluation & Assessment of Student Achievement).

· When using Simply Accounting for the first time, or any computerized accounting software, it is imperative the focus is on how the software works and not on transaction analysis.

· For evaluating the student’s computer work, it is critical that all students have the same data to work from. Otherwise, the teacher ultimately has a difficult time evaluating student achievement on the computer, if the students are using incorrect data. Therefore, students proceed to the computer once the manual work has been evaluated and taken up by the teacher.

· It is not absolutely necessary for students to complete manual entries for modules 2 and 3. The manual accounting for modules 2 and 3 do an excellent job in reinforcing basic accounting theory. In addition, they introduce the synoptic and multi-journal systems. However, they are time-consuming to complete and revolve around systems students will rarely use in the future.

· SAM comes with a disk containing the data files for the modules. The teacher needs to consult the network administrator to ensure students can do the following: access Simply Accounting; access the data files; save and back-up their work/files.

· The teacher modules of SAM have instructions identifying the specific pages to be copied for students.

· Teaching Simply Accounting is best achieved by using a broadcast tool such as a computer projector or encoder and television. If the teacher does not have access to such multi-media devices, rotating around the computer lab and helping individual students is advised.

· When discussing other features of Simply Accounting per the instructions in task 5.1.3, the teacher may elect to demonstrate several to the class.

· Module 2 of SAM includes transactions affecting the Payroll Journal and Reconciliation (Journal A). The teacher may omit these transactions. The Bank Reconciliation is discussed in Activity 3 of this Unit. Also, Payroll Accounting is not a learning expectation for this course. Nonetheless, these features will be identified as stated in the previous note. The solution in the Teachers’ module has to be modified if the payroll and reconciliation entries are skipped.

Teaching/Learning Strategies

5.1.1 Using computerized Accounting Software: The Basics (420 minutes)

Modules 1 and 2 of CGA School Accounting Modules (SAM)

Module 1 – Manual

The teacher:

· distributes, student copies per instructions in Teacher’s Notes of the module;

· reviews background information with students;

· reviews the following entries with students for practice interpreting source documents: opening entries (forms 1, 2); payment of rent (form 3); purchase of equipment (form 5); quarterly membership (form 17); weekly summary of drop-in fees (form 21).

The Students:

· record remaining transactions (forms) in the General Ledger;

· post general journal entries to General Ledger;

· prepare Year-End Trial Balance, Income Statement, and Balance Sheet.

Module 1 – Computerized

The teacher:

· walks students through steps 1-13 of the student manual. The manual takes the student step-by-step through recording transactions in Simply Accounting in a tutorial-like fashion;

· reviews step 15 - Correcting Journal Entries;

· reviews step 16 - Displaying Reports and Statements.

Students:

· complete the journal entries per step 14;

· print the journal entries for the month of September;

· print the Trial Balance and Balance Sheet as of September 30, 2001;

· print the Income Statement for the Month Ending September 30, 2001.

Module 2 – Computerized

The teacher:

· reviews background information with students;

· walk students through steps 1-6, and 9 of the student manual. Please note that step 7 (Preparing the Payroll Ledger) and step 8 (Preparing the Bank Reconciliation) are optional;

· demonstrates transactions (forms) 1-9;

· facilitates Mind-Map Assignment “Help! – I’m Drowning in Ledgers and Journals”
(see Appendix A);

· summarizes student presentations on blackboard or poster paper. Also discuss the division of labour and specialization concepts in terms of larger businesses.

Students:

· complete the remaining journal entries (forms 10-44 if steps 7, 8 are skipped);

· print the journal entries for the month of August;

· print the Trial Balance and Balance Sheet as of August 31, 2002;

· print the Income Statement for the Year Ending August 31, 2002;

· in groups, work on mind-maps for assignment “Help – I’m Drowning in Ledgers and Journals”;

· present their Mind-Maps.

5.1.2 Using Computerized Accounting Software: A Merchandising Perspective (240 minutes)

Learning Expectations AF3.08, AF1.02

Module 3 of the CGA School Accounting Modules (SAM)

The teacher:

· reviews background information with students;

· reviews the differences between a perpetual and a periodic inventory system;

· walks students through steps 1-4 of the student manual (step 3b is optional);

· demonstrates transactions (forms) 1-6.

Students:

· complete the remaining journal entries (forms 7-45, 47);

· print the journal entries for the month of August;

· print the Trial Balance and Balance Sheet as of August 31, 2003;

· print the Income Statement for the Year Ending August 31, 2003.

5.1.3 Using Computerized Accounting Software: Year-End Procedures (120 minutes)

Modules 3 and 5 of the CGA School Accounting Modules (SAM)

The teacher:

· reviews the accounting cycle;

· takes up solution to adjusting entries (form 49) of module 3;

· reviews the instructions for the closing the books per page 18 – module 5 of the student manual;

· using a Think/Pair/Share approach, has students identify the different stages of the accounting cycle, for a computerized system, using a blank flowchart template;

· at the bottom of the flowchart, has the pairs list the pros and cons of a computerized accounting system;

· has one pair volunteer to reproduce their flowchart on the blackboard (see Appendix C, Part 1);

· discusses other features/advantages; or simply have one pair volunteer to reproduce their flowchart on the board (see Appendix C, Part 1);

· using input from pairs, corrects and discusses the flowchart;

· has another pair volunteer to list their pros and cons on the blackboard;

· discusses and has other pairs add to the list (see Appendix C, Part 2);

· discusses other features/advantages of Simply Accounting (see Appendix C, Part 3).

Students:

· write down journal entries for the adjusting entries (form 49);

· correct their journal entries after class take-up;

· enter the journal entries in Simply Accounting per the instructions on p. 48 of the student manual;

· change the session date per the instructions on p. 18 of Module 5;

· display the Trial Balance and Balance Sheet to confirm all temporary accounts automatically closed
to zero and Retained Earnings is updated;

· in pairs, students create a flowchart illustrating the accounting cycle for a computerized accounting
system;

· each pair also lists the pros and cons of using a computerized accounting system;

· write quiz.

5.1.4 Using Computerized Accounting Software: Challenge and Opportunity (120 minutes)

Current Magazine Articles

The teacher:

· has students brainstorm how technology and the new economy have impacted and will impact the accounting profession;

· makes up and writes a list of responses offered by the class;

· facilitate magazine article jig-saw “Technology – Challenge and Opportunity” (see Appendix D);

· after jig-saw is complete, has students add to the list generated by initial brainstorm;

· Distribute quiz on activities 5.1.2 to 5.1.4 (see Appendix E).

Students:

· in pairs, brainstorm how technology and the new economy have and will impact the accounting
profession;

· share answers with the class;

· work on assignment “Technology – Challenge and Opportunity”;

· write quiz.

Assessment & Evaluation of Student Achievement

5.1.1 Using Computerized Accounting Software: The Basics

Module 1 - Manual

· evaluate student progress by applying the technique illustrated on p. 20, Module 1, of the Teacher’s Manual (Knowledge/Understanding, Application);

· administer audit test per pages 22-23 of Teacher’s Manual (Knowledge/Understanding, Application);

Module 1 and 2 - Computerized, 3 approaches (Knowledge/Understanding, Application);

· evaluate General Journal Detail print-out (students get 2 marks for each correct entry);

· develop an audit test to evaluate final results from the Trial Balance and Financial Statements;

· design a rubric to evaluate student understanding of the different aspects of the software introduced
in the module;

· combine of the three approaches above;

Mind-Map Activity

See peer assessment in Appendix B (Application, Communication).
5.1.2 Using Computerized Accounting Software: A Merchandising Perspective

Module 3 – Computerized;
See three approaches described in 5.1.1 above (Knowledge/Understanding, Application);

5.1.3 Using Computerized Accounting Software: Putting it all Together;
Part A of quiz (see Appendix D) (Knowledge/Understanding);

5.1.4 Technology: Challenge and Opportunity;
Magazine Article Jigsaw;

· Self-assessment (see Appendix C) (Communication, Knowledge/Understanding);

· Part B of quiz (see Appendix D) (Thinking/Inquiry).

Appendix A

Mind Map Activity: “Help, I’m Drowning in Ledgers and Journals”

Teacher Notes

· Divide the class into groups of three to four maximum.

· Each group will mind-map one of the following modules of Simply Accounting.

· The purpose of the mind maps is to illustrate the function of each module.

· Representative transactions affecting the module should be illustrated. In addition, the advantage of having a computerized module should be captured in the mind map.

· The teacher can draw a quick mind map for one of the modules. The Customer Module is one example. The mind map can include customer names, addresses, phone numbers, and other contact information. In addition customer balances, dollar signs, invoice details, and amounts overdue can be illustrated using a combination of images and key words. Finally benefits such as specialization of labour, internal control, automatic posting, division of labour, organization, and useful management information can be communicated in the mind map.

· Students generate ideas based on their learning experience of Modules 1-3 of SAM plus the references in the Purbhoo text.

· Groups will present and post the mind maps.

Assessment & Evaluation of Student Achievement

Generate a peer assessment form for the mind map.
(Knowledge/Understanding, Application, Thinking/Inquiry, Communication)

Appendix B

Part 1: Modified Accounting Cycle for a Computerized Accounting System

· Transactions occur (Source Documents)

· Accounting entries are recorded in a module (General, Sales, or Purchases)

· Print Trial Balance

· Adjusting entries recorded General Module

· Print Income Statement and Balance sheet

· Advance Using Date to the start of a new fiscal period

Part 2: Pros and Cons of a computerized Accounting System

Pros

· Clicking the Post icon automatically performs posting; and, all journals, ledgers and reports are updated immediately

· Transaction analysis is easier because accounts are linked in the different modules

· Closing procedures are automatic

· Standard Financial Statements and numerous reports can be printed any time

· Controls are provided to prevent data entry errors, such as addition errors or transposition of
numbers, duplicate cheque copies, duplicate invoice numbers, etc

· The software is easy to use and inexpensive

· Files can be backed up

· Data entry errors are easily corrected

· Numerous advantages to additional features in Part 3

Appendix B (Continued)

Cons

· Must be computer literate

· Need computer and printer

· Computer viruses and crashes may destroy data

· May not be necessary for very small businesses

· Users rely heavily on software and neglect to develop an understanding of accounting

Part 3: Additional Features/Advantages of Simply Accounting

· Maintain payroll records and process payroll transactions

· Perform bank and sub-ledger reconciliations

· Maintain perpetual inventory records

· Graph financial information

· Design budgets

· Time management and to-do lists

· Allocate transaction by project

· Dual currency and Internet connections

· Automatic printing of cheques

Appendix C

Magazine Article Activity (Jig-Saw) – Technology: Challenge and Opportunity

Teacher Notes

· Divide the class into cooperative groups or students. (Four is the suggested maximum.)

· Each member of the cooperative group analyse a different magazine article from CA Magazine.

· Suggestions for articles: “The Top Ten Tech Issues for 2001” by Issie Rabinovitch, CA Magazine, January-February 2001; “The Evolutionaries” by Jim Carroll, CA Magazine, September-October 2000; “Keeping up with I.T.” by Stephane Ethier, CA Magazine, January-February, 2000; “High-Tech Upstarts” by Ruby Andrew, CA Magazine, November-December 2000.

Note: all articles can be downloaded from www.camagazine.com/cica/camagazine.nsf

· Students break from their home group and join an expert group (i.e., all students in the expert group are studying the same article).

· Expert partners read and study their article together, plan effective ways to teach the content, and plan ways to check for comprehension of cooperative group team members.

· The students then return to their cooperative group. Cooperative group members take turns presenting their article to one another. The team goal is for all group members to understand the articles presented.

· Units in the profile make reference to the use of specific texts, magazines, films, and videos in the Teaching/Learning Strategies. Before reproducing materials for student use from books and magazines, teachers need to ensure that their board has a Cancopy licence and that resources they wish to use are covered by this licence. Before screening videos for their students, teachers need to ensure that their board/school has obtained the appropriate public performance videocassette licence from an authorized distributor (e.g., Audio Cine Films Inc.). Teachers are also reminded that much of the material on the Internet is protected by copyright. That copyright is usually owned by the person or organization that created the work. Reproduction of any work or a substantial part of any work on the Internet is not allowed without the permission of the owner.

Assessment & Evaluation of Student Achievement

· Generate a self-assessment form for the jigsaw, (Knowledge/Understanding, Thinking/Inquiry, Application, Communication)

Appendix D

Quiz on Activities 5.1.3 and 5.1.4

Name:

Mark: /25

Part A Choose any combination of the following questions. The value of the questions answered must total 10 marks.

1. Identify the eight modules of Simply Accounting studied in this unit. (8 marks)

2. Explain the concepts of division of labour, specialization, and internal control as they apply to subsidiary ledgers and specialized journals. (8 marks)

3. List specific the advantages and disadvantages of using a computerized accounting program. (8 marks)

4. Describe two additional features of Simply Accounting discussed in class. (2 marks)

5. List the steps in the accounting cycle for computerized accounting. (2 marks)

Part B Answer any combination of the following questions. The value of the questions answered must total 15 marks.

6. What are the tech issues for 2001 identified by Issie Rabinovitch in “The Top Ten Tech Issues for 2001”? (5 marks)

7. Explain why Jim Caroll, “The Evolutionaries”, feels that E-business is a great opportunity for professional accountants. (5 marks)

8. Outline how technology has impacted the CA professions according to Stephane Ethier, “Keeping up with I.T.” (5 marks)

9. Refer to the information in the article, “High-Tech Upstarts” by Ruby Andrew and give your opinion (supported with evidence) of the following quote. “In the fast-morphing High-Tech world, a small start-up can quickly become a money spinner. For CA firms, it’s the hottest practice area in Canada.” (5 marks)

Make sure the total of your answers in Part A =10 marks and Part B = 15 marks.
(Knowledge/Understanding, Thinking/Inquiry, Communication, Application)

Activity 5.2: Financial Statement Analysis

Time: 600 minutes

Description

Students use spreadsheet software to perform basic financial statement analysis. Students calculate common ratios, perform trend analyses, and generate common-size and comparative financial statements. Students will learn how to analyse and interpret a quantitative analysis.

Strand(s) & Learning Expectations

Strand(s): Financial Analysis, Control, and Decision Making

Overall Expectations

FAV.02 - evaluate the financial situation of a business by analysing performance measures and financial statements;

FAV.03 - demonstrate an understanding of how accounting information is used in decision- making.

Specific Expectations

FA2.01 - explain the importance of current assets when interpreting a balance sheet;

FA2.02 - explain the importance of current liabilities when interpreting a balance sheet;

FA2.04 - analyse a company’s liquidity, solvency, and return on investment by using comparative statements, trend analysis, and common size statements;

FA2.05 - evaluate a company’s ability to meet its financial obligations;

FA3.01 - demonstrate an understanding of the various uses of financial data in decision making.

Prior Knowledge & Skills

· The student should be familiar with spreadsheet basics such as entering text and numbers, creating and copying formulas, and changing cell formats.

· Familiarity with financial statements is also required.

Planning Notes

· The teacher should make up some spreadsheet templates that the students can plug data into. A template could be made for a comparative statement analysis, a trend percentage analysis and a common size statement analysis. These templates will include the proper set-up (cell sizes) and formatting (currency, decimal places, lines). Sample exercises with appropriate data should be developed to build the spreadsheets. This data could come from the textbook references in the resource section.

· Arrange for a computer lab that has spreadsheet software.

· Arrange for a broadcast tool such as a computer projector, or encoder and TV.

Teaching/Learning Strategies

5.2.1. Using Spreadsheets: Financial Statements Analysis (150 minutes)

The teacher:

· reviews the income statement and the report form format of the balance sheet (Note: this need only be done once in the first class). Particular focus should be placed on a review of current assets and current liabilities. Using an example from one of the textbooks referenced in the resource section, teach what a comparative statement analysis is, and how it is done on paper;

· discusses and makes a note with the students about the comparative statement analysis. This should include how to develop the analysis and how this is one way of creating information to identify problems and help management make decisions. The value of this information to investors and creditors should also be considered;

· have the students start the spreadsheet software, and load a teacher-prepared Comparative Statement template. Hand out the exercise with the raw data to be used to build the spreadsheet. Using a broadcast tool, students, together with the teacher, build the Comparative Statement analysis. The teacher should take particular care with the construction of the formulas and how to copy them to the appropriate cells. Students complete the template, and save. The students should print it twice, once as a regular print, and the second time with the formulas. This will be an example that the students can use for future reference;

· then change some of the raw data and the students input the changes into their spreadsheet. The “what if” feature of spreadsheets and its use in forecasting can then be discussed;

· gives the students some financial data and have them prepare their own spreadsheets from scratch;

· use the same method for Common Size statements and a trend analysis;

Students:

· do assignment questions on this material which have to be prepared using the spreadsheet software. The files are saved, printed and exchanged with another student for evaluation. The other students have a checklist, prepared by the teacher, which is the guide for the feedback. This checklist is accompanied by model solutions provided by the teacher;

5.2.2 Using Spreadsheets: Ratio Analysis (225 minutes)

The teacher should:

· introduce students to the calculation and analysis of the following ratios: Current Acid test (Quick), Inventory turnover, Debt, Times-interest-earned, Rate of return on (shareholder) equity; rate of return on net sales, rate of return on assets;

· have the students practise the calculations using a calculator and sample financial statement data. This should include data from a Sole Proprietorship, Partnership, and Corporation;

· have the students start the spreadsheet software, then load a teacher-prepared template of raw financial statement data and has them build the formulas for the ratios. The teacher may want to use the same method with the broadcast tool as was used in 5.2.1;

· give the students financial data on paper and has them prepare their own spreadsheets from scratch;

Students:

· do a comprehensive problem given by the teacher, which will include data sufficient to generate all the components of Activities 5.2.1 and 5.2.2. In groups of four, using the Jigsaw method, assign one of the components of the above activities to each student. Students prepare their part of the analysis on a spreadsheet, save the file, and print it. The group members then come together and share their work with the others. The group then analyses the results, and answers some teacher prepared questions on the health of the business. The teacher takes up the answers by giving a model solution. Students assess their answers and assign their group a letter grade on their product according to a marking scheme supplied by the teacher. Students also assess their group process.

5.2.3 Case study (225 minutes)

The teacher:

· develops a case study whereby two businesses are being considered for purchase. Give the Balance sheet and Income statement from each. These businesses should essentially be the same type. Teachers may want to refer to case studies in the textbooks, which are referenced in the resource section in the overview and this activity.

Students:

· develop a spreadsheet that involves all the financial analysis tools above. There should be four notebooks (pages) in the spreadsheet, one each for the comparative statement analysis, common size statements, trend analysis, and ratios. The data from both businesses will be on each page;

· write a one-page report using a word processor, giving their decision as to which business they would purchase using the results of their spreadsheet analysis to support their decision;

· submit the spreadsheets electronically, or print them twice, first as a regular print, and second with formulas.

Assessment & Evaluation of Student Achievement

2. Self-assessment of the spreadsheets developed by the student in Activities 5.2.1 and 5.2.2. A sample-marking scheme can be made up by the teacher, which will include a mark for accuracy of data, formulas, set-up and proper formatting for the students to use as their guide.

3. Peer assessment of the assignments in Activity 5.2.1, using a checklist and teacher-made model solutions.

4. Self- and group assessment of the comprehensive problem in Activity 5.2.2, using a teacher prepared marking scheme.

5. Self- and group assessment of the group process in 5.2.2, examples found in Assess for Success, an OSSTF publication.

6. Teacher evaluation of the spreadsheets in the case study in Activity 5.2.3.

7. Teacher evaluation of the report in the case study in Activity 5.2.3, using a Written Report Rubric, Appendix 5.2.1. (Knowledge/Understanding, Thinking/Inquiry, Application, Communication).

Accommodations

8. An enrichment activity could be an electronic presentation of the case study results in Activity 5.2.3.

9. A modified strategy might include resource personnel coming to the class to help the student with the computer and analysis work. Students could also do Activity 5.2.3 in the Library/Resource Centre if computer facilities and resource personnel are there.

Resources

D’Amico, V., T. Palmer, and T. D’Amico, Principles of Accounting, 2nd ed. Toronto: Pearson Education Canada, 1994. ISBN 0-7730-5264-X

Harrison, W., C. Horngren, M. Robinson, and W.M. Lemon, Accounting, 3rd ed. Chapter 19, Toronto: Pearson Education Canada, 1996. ISBN 0-13-184177-7

Investing in Your Future, Teacher’s Resource Guide, Toronto: Canadian Securities Institute and Investor Learning Centre, 2000ISBN 1-894289-51-X

Ireland, Tim. School Accounting Modules: Module 4, Vancouver: Certified General Accountants of Ontario, 2000. ISBN 1-55219-287-3

Syme, G.E., Accounting 1, 5th ed.: Chapter 15, Toronto: Pearson Education Canada, 1993.
ISBN 0-13-333825-8

Appendix 5.2.1

Written Report Rubric

Criteria	Level 1 (50-59%)	Level 2 (60-69%)	Level 3 (70-79%)	Level 4 (80-100%)
Knowledge/Understanding
Understanding of concepts, principles and theories Key concepts/ principles/ theories related to the expectation	- demonstrates limited understanding of the key concepts, principles and theories	- demonstrates some understanding of the key concepts, principles and theories	- demonstrates considerable understanding of the key concepts, principles and theories	- demonstrates a through and insightful understanding of the key concepts, principles and theories
Thinking/Inquiry
Inquiry skills	- demonstrates limited ability to use specific strategies to gather information and generate ideas for a written report	- demonstrates limited ability to use specific strategies to gather information and generate ideas for a written report	- demonstrates limited ability to use specific strategies to gather information and generate ideas for a written report	- demonstrates limited ability to use specific strategies to gather information and generate ideas for a written report
Communication
Communication of information and ideas	- demonstrates limited ability to use language conventions to write	- demonstrates some ability to use language conventions to write correctly	- demonstrates considerable ability to use language conventions to write correctly	- demonstrates a high degree of ability to use language conventions to write correctly

Note: A student whose achievement is below level 1(50%) has not met the expectations for this assignment or activity.

Activity 5.3: Budgeting and Other Control Measures

Time: 420 minutes

Description

Students are introduced to the concept of budgeting, the process of planning future business actions and to expressing those plans in a formal manner. Using spreadsheet software, they will prepare a budgeted income statement and balance sheet. The importance of budgeting as a management tool is further examined.

Bank reconciliations are essential control measures in the business world. After learning the basic concepts, students move from the manual method to spreadsheet variations and be made aware of existing accounting software modules which contain reconciliation applications.

Strand(s) & Learning Expectations

Strand(s): Financial Analysis, Control, and Decision Making

Overall Expectations

FAV.01 - demonstrate an understanding of the importance of proper internal control systems to the financial management of a business.

Specific Expectations

FA1.02 - explain the factors that influence budgetary forecasts;

FA1.03 - describe the budgeted income statement and a budgeted balance sheet;

FA1.05 - Analyse the control measures used in business.

Prior Knowledge & Skills

· Familiarity with spreadsheets skills and knowledge from Activity 5.2.

· Familiarity with the financial statements of a business.

· Knowledge of accounting software, e.g., Simply Accounting.

Planning Notes

· Prepare background information on the description and benefits of budgeting.

· Prepare spreadsheet example, master, or template of an income statement and a balance sheet.

· Arrange for computer lab use.

· Prepare resources for 5.3.2 (bank reconciliation, petty cash). Examples can be found in textbooks referenced in Resources.

· Design assignments and marking schemes.

Teaching/Learning Strategies

Lecture/questioning; individual and group work using computer spreadsheets

5.3.1. Budgeting (150 minutes)

The teacher should:

· introduce the concept that a budget outlines a course of action in monetary terms. It is a prediction that helps a business focus on future results. The teacher should also point out that individuals or families frequently do budgets on a personal level. The teacher could then develop a personal budgeted income statement as a class, either on the board, or on a spreadsheet using a computer broadcast tool. This income statement could include typical items that students would gain revenue from such as: allowances; part time jobs; monetary gifts from relatives. Typical expenses might be: clothing; movies; CDs; and/or snack food. During the development, the teacher should continually focus the students’ attention on the process of establishing a realistic dollar amount for each item. The teacher should ensure that there is an excess of revenue over expenses, which is the amount of savings. When the income statement is finished, a discussion should follow as to what would happen to the budget if a variety of life events happened, such as: an increase in movie prices; fewer hours at the job; or a raise in the allowance;

· have the student pairs create a budgeted income statement for an upcoming student council dance. This could be done on paper, or on a computer spreadsheet, if computer lab space is available. When this is finished, the teacher could present various scenarios to the class that would impact on the numbers in their budget. Some examples could be: a major snow storm and only half the students budgeted for were able to purchase tickets; only 70% of the refreshments budgeted for were sold; the cost of the security increased; decorations were donated and cost nothing;

· introduces a basic business income statement layout with budgeted timelines and percentages indicated but not calculated. The teacher should continually refer back to the two examples above to help the students understand the process. The students then complete the statement using similar techniques developed in the first two examples. This exercise is preferably done in the computer lab using spreadsheets. Reference needs to be made to the previously learned spreadsheet skills. Complex financial functions are not used, but students need to review their knowledge of building formulas, using simple functions, copying formulas with absolute and mixed references, applying formulas, and printing results. This topic reinforces particularly well the value of spreadsheets in “what-if” scenarios;

· takes up the answers to the income statement and assigns a similar exercise to be completed at home and to be handed in for evaluation. This assignment should be designed in such a fashion that it could be done without a computer, since computer lab access may not always be available. This will reinforce the value of spreadsheets in forecasting activities as well as testing the students’ understanding of budgeting concepts and calculating skills;

· illustrates, displays, and describes a budgeted balance sheet.

Students:

· actively participate in taking notes and contributing to the discussion on the concept, methods, and benefits of budgeting;

· complete the practice budget statement in class (preferably using spreadsheets);

· complete and hand in the budgeting homework assignment.

5.3.2. Control Measures used in Business (270 minutes)

The teacher:

· introduces the concept, methods, and benefits of control measures to the students. The fundamental rules for internal control need to be presented and discussed;

· introduces the internal control measures specifically designed to protect the cash of a business. Some students may have work experience at a cash register and will be able to lend realism to the presentation, if encouraged to relate their experiences;

· presents the concept, methods, and benefits of bank reconciliation. Using the school’s student council records can provide an authentic context;

· assigns manual review and practice questions for bank reconciliations which can be drawn from or be based on the school’s student council records;

· take up the correct answers to the practice questions;

· exposes the students to the concept, methods, and benefits of a petty cash fund;

· assigns manual review and practice questions for a petty cash fund. If time permits, a petty cash simulation using vouchers and the appropriate control accounts can be set up;

· takes up the correct answers to the practice questions;

· takes the students to a computer lab and assign a spreadsheet bank reconciliation to be handed in after completion for evaluation. It may be possible here to use the student council’s spreadsheet format if one exists. If not, the class may develop a spreadsheet reconciliation tool to be passed on to the student council treasurer;

· exposes the students to the use of a bank reconciliation in a commercial accounting package.

Students:

· actively participate in taking notes and contribute to the discussion on the concept, methods, and benefits of control measure, bank reconciliation, and petty cash procedures, possibly utilizing their personal job experiences;

· complete the practice bank reconciliation and petty cash questions (preferably using computers);

· complete and hand in the bank reconciliation and petty cash assignments for marking.

Assessment & Evaluation of Student Achievement

· Assess practice budget statements, practice bank reconciliation and petty cash questions.

· Assess budgeting assignment, bank reconciliation and petty cash assignments. (Knowledge/Understanding, Thinking/Inquiry, Communication, Application)

Accommodations

The following are ways in which the activity can meet student’s individual needs:

· provide review/exercise questions of the lesson in both written and oral form;

· use peer tutoring to assist students who require reinforcement;

· provide extension activities for students requiring enrichment. Students may be asked to investigate the control procedures used by the student council of the school, or, if possible, the petty cash procedure used in the school office. They can then report their findings to the class, using overheads or an electronic presentation (see presentation rubric, Appendix 5.3.1);

· provide extra computer assistance. This might include providing computer lab facilities at lunch or after school.

Resources

Syme, G. E. Accounting 1, 5th ed. Toronto: Pearson Education Canada, 1993. ISBN 0-13-333825-8

Larson , K.D., W.W. Pyle, M. Zin, and M. Nelson. Fundamental Accounting Principles, 5th Canadian ed. Homewood Illinois: Richard D. Irwin Inc., 1987. ISBN 0-256-03601-2

Ireland, Tim. School Accounting Modules. Vancouver: Certified General Accountants of Ontario, 2000.
ISBN 1-55219-287-3, Module 2, pp 40-41

Meigs, R.F., W.B. Meigs, M. Zin, and W.P. Lam. Accounting, the Basis for Business Decisions, 6th ed. McGraw-Hill Ryerson Limited, 1991. ISBN 0-07-551072-3, p. 1158

Appendix 5.3.1

Presentation Rubric

Criteria	Level 1 (50-59%)	Level 2 (60-69%)	Level 3 (70-79%)	Level 4 (80-100%)
Knowledge/Understanding
Knowledge of facts and terms	- demonstrates limited knowledge of facts and terms	- demonstrates some knowledge of facts and terms	- demonstrates considerable knowledge of facts and terms	- demonstrates thorough insightful knowledge of facts and terms
Understanding of concepts, principles, and theories	- demonstrates limited ability to identify and explain content on topic	- demonstrates some ability to identify and explain content on topic	- demonstrates considerable ability to explain content on topic	- demonstrates through ability to explain all aspects of content on topic
Thinking/Inquiry
Critical and creative thinking skills (e.g., to identify the problem, topic, issue, explore alternative, collect the data)	- demonstrates limited ability to use specific strategies to gather information and generate ideas for a presentation	- demonstrates some ability to use specific strategies to gather information and to generate ideas for a presentation	- demonstrates considerable ability to use specific strategies to gather information and to generate ideas for a presentation	- demonstrates considerable ability to use specific strategies to gather information and to generate ideas for a presentation
Application
Application of concepts, skills, and procedures in familiar (to new) contexts	- demonstrates limited ability to use an organizational pattern to structure ideas for a presentation	- demonstrates some ability to use an organizational pattern to structure ideas for a presentation	- demonstrates considerable ability to use an organizational pattern to structure ideas for a presentation	- demonstrates a high degree of ability to use an organizational pattern to structure ideas for a presentation
Use of equipment, materials and technology	- demonstrates limited ability to use strategies for style, text, background, timing or transitions	- demonstrates limited ability to use strategies for style, text, background, timing or transitions	- demonstrates limited ability to use strategies for style, text, background, timing or transitions	- demonstrates limited ability to use strategies for style, text, background, timing or transitions

Note: A student whose achievement is below level 1 (50%) has not met the exceptions for this assignment of activity.

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