CSEC Principles of Accounts
CSEC Principles of Accounts
CSEC Principles of Accounts
PRINCIPLES OF ACCOUNTS
SYLLABUS
Effective for examinations from May/June 2008
CXC 10/G/SYLL 06
Published by the Caribbean Examinations Council
All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or
transmitted in any form, or by any means electronic, photocopying, recording or otherwise without prior
permission of the author or publisher.
The Pro-Registrar
Caribbean Examinations Council
Caenwood Centre
37 Arnold Road, Kingston 5, Jamaica, W.I.
CXC 10/G/SYLL 06 ii
Contents
RATIONALE....................................................................................................................................................1
AIMS .................................................................................................................................................................1
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SECTION 14 – PAYROLL ACCOUNTING................................................................................................27
The Principles of Business syllabus (CXC 10/0/SYLL 96) was revised in 2006 for first examination in 2008.
CXC 10/G/SYLL 06
Principles of Accounts Syllabus
◆RATIONALE
Accounting is the financial information system that provides relevant information to those who manage or
use economic resources or engage in other economic activity. Principles of Accounts is a course of study
that provides an introduction to the principles and techniques that accountants employ in measuring,
processing, evaluating and communicating information about the financial performance and position of a
business.
This course in Principles of Accounts helps students to develop an understanding of a range of theoretical
and practical techniques used in accounting. It helps to develop skills that should enable them to
participate more effectively and responsibly in today’s business environment, to improve the management
of personal financial activities, such as, budgeting, savings and investment. In addition, this course prepares
students for post-secondary and professional studies in accounting.
The syllabus also seeks to instill tenets of the Ideal Caribbean as articulated by the CARICOM Caribbean Education Task
Force (CTF) and adopted by the CARICOM Heads of Government at their 18th Summit. To this end the syllabus contains
objectives and content intended to nurture and improve students’ multiple literacy skills, as well as their management, economic
and entrepreneurial skills and positive work ethic. In addition, in keeping with the UNESCO Pillars of Learning, on
completion of this course of study students will learn to know, to be, to do, and to live together.
◆AIMS
The syllabus aims to:
◆GENERAL OBJECTIVES
On completion of the syllabus, students should:
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2. appreciate the importance of accountability in both public and private organizations;
4. appreciate the use of accounting practice as a tool for efficient business management;
5. have the ability to identify and interpret financial data that will facilitate proper decision-making by
users of accounting information;
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◆SUGGESTED TIME –TABLE ALLOCATION
It is recommended that a minimum of five 40-minute periods per week (over a two year period) or the
equivalent should be allocated to the syllabus.
(i) Knowledge
(b) define and explain accounting concepts, principles, theories and procedures;
(ii) Application
(b) apply accounting concepts, principles and theories to solve accounting problems in various
situations.
(iii) Interpretation
(a) select, organize and interpret accounting data presented in a variety of forms;
(b) organize and present, logically and effectively, accounting ideas and arguments using verbal,
graphical and numerical forms of communication.
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◆FORMAT OF THE EXAMINATIONS
The examination for General Proficiency certification will be set on the entire syllabus and will consist of
two papers in the final examination and a School-Based Assessment component.
Paper 02 A problem-solving paper divided into two sections. Each section will test the profile
(3 hours) dimensions, Knowledge, Application (of accounting principles) and Interpretation
(of accounts) in the ratio1:2:1.
Section 2 – Four questions of which the candidate must attempt two. The
questions may test any of the objectives in the syllabus.
Each question will be worth 20 marks; the total for five questions is 100 marks.
Paper 03/2 An alternative to the School-Based Assessment component for private candidates
consisting of 20 compulsory short answer questions based on case studies. Details
of the Paper 03/2 requirements are given on page 31.
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The profile dimensions and examination papers will be weighted as set out below.
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◆SECTION 1: INTRODUCTION TO PRINCIPLES OF ACCOUNTS
SPECIFIC OBJECTIVES
7. outline the concepts and conventions that guide the accounting process;
CONTENT
1. Concept of “Accounting” and “Principles of Accounting”.
5. Financial Statements – Income statement/Trading and Profit & Loss A/C, Income and
Expenditure A/C, Balance Sheets, Cash Flow Statements. (T e a c h e rs a re n o t e x p e c te d to te a c h
how t o pr e par e t he c as h f l ow s t at e m e n t s but i t s houl d be i de n t i f i e d as on e of t he f i n an c i al
st a t e m e n t s w h ic h m u st b e p re p a re d b y c o rp o ra t io n s).
7. Accounting concepts and conventions – principles which guide the accounting process – accrual
and matching concept, prudence (conservatism) concept, consistency concept, separate entity
concept.
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8. (a) Accounting processes which could be readily performed by the use of the computer, for
example, payroll, stock control, debtors’ and creditors’ schedules.
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◆SECTION 2: THE CLASSIFIED BALANCE SHEET
SPECIFIC OBJECTIVES
7. determine which items in a Balance Sheet will change as a result of various transactions.
CONTENT
5. Definition and examples of Fixed Assets, Currents Assets, Current Liabilities, Long-term Liabilities.
(a) permanence;
(b) liquidity.
7. Effect of transactions on Balance Sheet items – increase or decrease in items while maintaining the
Balance Sheet equation.
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◆SECTION 3: BOOKS OF ORIGINAL ENTRY
SPECIFIC OBJECTIVES
CONTENT
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BOOKS OF ORIGINAL ENTRY (cont’d)
(a) cash;
(b) cheques;
3. Source documents and the books of original entry to which they are related – sales invoice,
purchases invoice, credit notes, debit notes, petty cash vouchers, receipts from cash transactions
and non-cash transactions.
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◆SECTION 4: LEDGERS AND THE TRIAL BALANCE
SPECIFIC OBJECTIVES
6. post from books of original entry to the general ledger and the subsidiary ledgers;
CONTENT
1. Different types of ledgers for recording nominal, real and personal accounts:
2. Classification of accounts:
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LEDGERS AND THE TRIAL BALANCE (cont’d)
7. Balancing accounts: calculation of the balances c/d and bringing down those balances.
8. Trial balances.
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◆SECTION 5: THE PREPARATION AND ANALYSIS OF
FINANCIAL STATEMENTS OF THE SOLE-
TRADER
SPECIFIC OBJECTIVES
7. draw up the Trading and the Profit and Loss account to determine gross profit or loss and net
profit or loss;
11. explain the significance of the working capital for the operation of a business;
CONTENT
1. The purpose of preparing Financial Statements to satisfy the needs of the users.
2. Methods of inventory (stock) valuation: First in, First out (FIFO), Last in, First out (LIFO), Average
Cost (AVCO).
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THE PREPARATION AND ANALYSIS OF FINANCIAL STATEMENTS OF THE SOLE-TRADER
(cont’d)
7. Trading and Profit and Loss account for sole-traders including adjustment for return inwards and
outwards; closing stock.
9. Trading results: simple ratios such as stock turn, average stock, gross profit percentage, net profit
percentage.
10. Definition of working capital, calculation of working capital; preparation of classified Balance Sheet
showing working capital.
11. Working capital as a basic tool for solvency; working capital formula.
12. Analysis and interpretation of the financial position of a business using ratios: current ratio; acid
test ratio; return on investment.
13. Preparation of simple reports evaluating a business based on ratios and making recommendations.
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◆SECTION 6: END OF PERIOD ADJUSTMENTS
SPECIFIC OBJECTIVES
4. determine the amount of expenses or revenues to be transferred to the Profit and Loss
Account/Income Statement;
5. indicate where accruals and prepayments will appear on the Balance Sheet;
7. prepare journal entries and ledger accounts to write off bad debts and create provision for
doubtful debts;
9. calculate annual depreciation expenses using straight line method and reducing balance method;
10. prepare journal entries and ledger accounts for provision for depreciation;
CONTENT
6. The reasons for bad debts: aging debtors; creation of provision for doubtful debts.
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END OF PERIOD ADJUSTMENTS (cont’d)
7. Accounting entries for bad and doubtful debts; the treatment of bad and doubtful debts in the
Profit and Loss Account and Balance Sheet.
9. Straight line method (using formula) and reducing balance method of depreciation.
10. Journal entries for the provision for depreciation; the maintenance of the provision for
depreciation account; the treatment of accumulated depreciation on the Balance Sheet; the
determination of Net Book Value (NBV).
11. The preparation of adjusted Financial Statements (the use of worksheets would be helpful).
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◆SECTION 7: CONTROL SYSTEMS
SPECIFIC OBJECTIVES
3. distinguish between those errors which affect and those which do not affect the trial balance;
8. explain the purposes of control accounts and how they are prepared;
12. account for differences between cash book and bank statement balances;
13. construct a bank reconciliation statement using the adjusted cash book balance.
CONTENT
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CONTROL SYSTEMS (cont’d)
3. Types of errors.
6. Suspense accounts.
7. The effect of errors on the Trading and Profit and Loss account and the Balance Sheet.
12. Identification of the items that cause the difference between cash book and Bank statement
balances and updating of the cash book.
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◆SECTION 8: INCOMPLETE RECORDS
SPECIFIC OBJECTIVES
CONTENT
3. Calculation of missing amounts such as sales, purchases, expenses, depreciation and drawings.
4. The use of mark-up, margin and stock turnover to find missing amounts, such as, purchases, sales
and gross profit.
5. Preparation of Trading and Profit and Loss Account and Balance Sheet from incomplete records.
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◆SECTION 9: ACCOUNTING FOR PARTNERSHIPS
SPECIFIC OBJECTIVES
5. prepare journal entries and ledger accounts to record the capital of partnership;
9. explain the significance of the brought down balances on partners’ current accounts;
CONTENT
3. Reasons for formation of partnership, for example, increased capital, diverse skills.
4. Features of partnership agreement, including share of profits, interest on capital and drawings,
salaries.
5. The capital account of partners – cash and non-cash resources; types of capital account –fixed and
fluctuating capital accounts and their implications.
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ACCOUNTING FOR PARTNERSHIPS (cont’d)
8. The current account prepared with items posted from the appropriation account; columnar form
and single accounts.
9. The significance of the debit and credit balances brought down on the current accounts.
10. The treatment of current account balances on the balance sheet; (emphasis on capital section).
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◆SECTION 10: ACCOUNTING FOR CORPORATIONS (LIMITED
LIABILITY COMPANIES)
SPECIFIC OBJECTIVES
2. outline the advantages and disadvantages of a limited liability company in relation to sole
proprietorship and partnership;
3. describe the various methods of raising capital available to limited liability companies;
5. identify the various types of shares and the rights of the owners of each type of share;
CONTENT
3. Methods of raising capital – equity (preference and ordinary shares), debt (debentures, bank loans).
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ACCOUNTING FOR CORPORATIONS (Limited Liability Companies) (cont’d)
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◆SECTION 11: ACCOUNTING FOR CO-OPERATIVE
SOCIETIES
SPECIFIC OBJECTIVES
CONTENT
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◆SECTION 12: ACCOUNTING FOR NON-TRADING
(NON- PROFIT) ORGANIZATIONS
SPECIFIC OBJECTIVES
2. outline the differences in accounting procedures for trading and non-trading (non-profit)
organizations;
CONTENT
4. Preparation of income generating accounts: subscription A/c; bar/trading A/c; dance A/c.
6. Preparation of Income and Expenditure Account treating transfer from income generating
accounts (deficit/surplus).
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◆SECTION 13: MANUFACTURING ACCOUNTS
SPECIFIC OBJECTIVES
CONTENT
4. Preparation of Trading, Profit and Loss Account and Balance Sheet of a manufacturer.
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◆SECTION 14: PAYROLL ACCOUNTING
SPECIFIC OBJECTIVES
CONTENT
1. Use of time cards, time books, electronic clock-in cards, employee earnings records.
3. Preparation of payroll and wage documents from time cards, computer records.
4. Calculation of statutory deductions and non-statutory deductions, for example, income tax, social
security and mortgage.
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◆GUIDELINES FOR THE CONDUCT OF THE SCHOOL-BASED
ASSESSMENT IN PRINCIPLES OF ACCOUNTS
School-Based Assessment (SBA) is an integral part of student assessment in the course covered by this
syllabus. It is intended to assist students in acquiring certain knowledge, skills and attitudes that are
associated with the subject. The activities for the School-Based Assessment are based on the syllabus and
should form part of the learning activities to enable the student to achieve the objectives of the syllabus.
During this course of study, students obtain marks for the competencies they develop and demonstrate in
undertaking their SBA assignments. These marks contribute to the final marks and grades that are awarded
to students for their performance in the examination.
The guidelines provided in this syllabus for selecting appropriate tasks are intended to assist teachers and
students in the selection of assignments that are valid for the purpose of School-Based Assessment. The
guidelines provided for the assessment of these assignments are intended to assist teachers in awarding
marks that are reliable estimates of the achievement of students in the School-Based Assessment component
of the course. In order to ensure that the scores awarded by the teachers are consistent with the Caribbean
Examinations Council’s standards, the Council undertakes the moderation of a sample of the SBA
assignments submitted by the school.
School-Based Assessment provides an opportunity to individualize a part of the curriculum to meet the
needs and interests of students. It facilitates feedback to the student at various stages of the experience.
This helps to build the self-confidence of students as they proceed with their studies. The SBA also
facilitates the development of critical skills and abilities, emphasized by the subject and enhances the
validity of the examination scores.
RESEARCH PROJECT
The School-Based Assessment component of the Principles of Accounts syllabus is a single guided research
project fo r sc h o o l c a n d id a te s . The project should involve the manipulation of accounting data in real-life
situations, obtained through the SIMULATION OR ACTUAL OPERATION of a business entity. All
activities selected must be within the law and must lend themselves to the collection of accounting data and
application of accounting principles identified in the mark scheme on pages 29-30 of the syllabus. Others
are advised to gather data from entities and situations with which they are familiar and from data which
may be easily obtained, for example,
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The project must satisfy the objectives in the syllabus that are related to:
(i) books of original entry, including cash book, general journal sales and purchases journal;
SBA REQUIREMENTS
Every candidate who enters for the CSEC Principles of Accounts examination must submit a report on a
project. Students may work individually or in groups to gather data. However, each candidate must produce a
complete report. No two reports from the same group should be identical. The report should not exceed
1,000 words, (not including appendices). Wherever a candidate exceeds the maximum length for the project
by more than 10 per cent, the teacher must impose a penalty of 10 per cent of the score that the candidate
achieves on the project. On the candidate’s script, the teacher should clearly indicate the candidate’s original
score – that is, the score before the deduction is made – the marks which are to be deducted, and the final
score that the candidate receives after the deduction has been made.
Only the final score is to be indicated on the record sheets which are submitted to CXC electronically via the
SBA data capture module on the Online Registration System (ORS) on the Council’s website.
Students doing more than one subject in the Business cognate group may submit one SBA project under a theme which
covers the group.
PROJECT REPORTS
A student’s report should be presented electronically or in a soft folder bearing the student’s name, number,
name of subject, school, centre number and the date submitted. The project document should comprise the
following in the order prescribed below.
1. Table of contents
2. Aim of the project
3. Information about the entity operated or simulated, namely,
In addition, all appendices should be attached, including source documents, diagrams, charts and statistical
data.
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MANAGEMENT OF THE PROJECT
School-Based Assessment tasks should be completed in the course of normal teaching time and supervised
and marked by the teacher. Although some of the data collection and research work must be undertaken
outside of normal school time, the teacher must be satisfied that the work submitted for assessment is the
student’s own work.
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CRITERIA P1- K P2- A P3- I
1. PRESENTATION (Total 12 marks)
(a) La y o u t ( 7 m a r k s )
Table of contents included 1
Aims clearly stated 2
4 different types of source documents used 1
Diagrams, pictures and tables used 1
Information properly sequenced 1
Report is neatly and tidily presented 1
(b) Re l e v a n c e ( 2 m a r k s )
Simulated or actual business entity identified and activities 1
described
Relevant information and records of entity provided 1
(c) Co m p l e t e n e s s ( 3 m a r k s )
Specified period under review stated 1
A minimum of five accounts completed and balanced to date 1
All sections of the project are in evidence and report duly 1
completed
Sub-Total 6 6 0
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CRITERIA P1- K P2- A P3- I
Any book or books of original entry 1
Classified Balance Sheet 1
(b) Correct r e c o r d in g o f d a t a fr o m (4 m a r k s)
Cash Receipt 1
Bank document 1
Invoice 1
Any other related document 1
(c) Accuracy o f r e su lt s a s st a t e d in (5 m a r k s)
Balances c/d 1
Profits/Losses 1
Balances transferred 1
Trial Balance totals agreeing 1
Balance Sheet balancing 1
Sub-Total 0 14 0
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◆GUIDELINES FOR THE ALTERNATIVE TO SCHOOL-BASED
ASSESSMENT
The present syllabus for Principles of Accounts has been developed for examination and certification at
General Proficiency only.
Paper 03/2 is the Alternative to School-Based Assessment (SBA) of the CXC examination in Principles of
Accounts. Paper 01 is a multiple choice paper and Paper 02 is a problem-solving paper. Paper 03/1 is the
SBA for school candidates and Paper 03/2 is for private candidates.
The Alternative to the School-Based Assessment in Principles of Accounts (Paper 03/2), takes the form of a
written examination in lieu of internal teacher assessment for school candidates. This paper, of 90 minutes
duration, will be based on the same area of the syllabus as the SBA component defined in the syllabus and
weighted in the same way as the Paper 03/1 (SBA) for school candidates, as shown in the table below.
Paper 03/2 will consist of a case study and candidates will be required to answer between 10 and 15
questions based on the case study. Candidates are advised to familiarize themselves with the areas of the
syllabus listed below, in order to prepare adequately for Paper 03/2. Please note that candidates taking
Paper 03/2 are NOT required to submit a project.
Questions derived from the case studies should satisfy the objectives and content of:
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◆REGULATIONS FOR PRIVATE CANDIDATES
Private candidates must be entered for the examination through the Local Registrar in their respective
territories. They will be required to sit Papers 01, 02, and EITHER Paper 03/1 or Paper 03/2.
Paper 03/1 is a single guided research project for candidates whose research must be monitored by tutors in
a recognized educational institution. The reports must be original work and must be validated by the
principal and the candidates’ tutors.
Paper 03/2 is a written examination designed for candidates whose research projects cannot be monitored
by tutors in a recognized educational institution and who have been assigned by the Local Registrar to write
Paper 03/2 at a designated examination centre.
Resit candidates who have obtained a MODERATED score of 50% or more of the SBA marks will not be
required to repeat this component of the examination provided that they write the examination in the
academic year immediately following their first sitting of the examination. Resit candidates who failed to
achieve 50% of the total SBA marks must repeat the project during the academic year in which the
examination is repeated. Resit candidates must indicate at registration that they are resit candidates.
ii. There is no SBA option (Paper 03/1) available for January candidates.
a. those resit candidates who wrote Paper 03/1 (SBA) in the year immediately preceding the
January examination. Those who obtained a MODERATED score of 50% or more are
NOT required to write Paper 03/2 in January;
b. those resit candidates who wrote Paper 03/2 (Alternative to SBA) in the year immediately
preceding the examination. Those who obtained a MODERATED score of 50% or more
are NOT required to re-write Paper 03/2 in January.
iv. A candidate who qualified under iii(a) and iii(b) above who obtained a MODERATED score of
50% or more, but who wish to try to improve on his/her grade may write Paper 03/2 in January.
v. All resit candidates who did NOT satisfy the 50% requirement (either on 03/1 or 03/2) are
required to write Paper 03/2 in January.
Western Zone Office
2006/05/10
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