Scheme of Work

Cambridge IGCSETM / IGCSE (9–1)

Accounting 0452 / 0985

Cambridge O Level
Accounting 7707
For examination from 2020

Version 2
 In order to help us develop the highest quality resources, we are undertaking a continuous programme of review; not only to measure the success of
our resources but also to highlight areas for improvement and to identify new development needs.

We invite you to complete our survey by visiting the website below. Your comments on the quality and relevance of our resources are very important
to us.

www.surveymonkey.co.uk/r/GL6ZNJB

Would you like to become a Cambridge International consultant and help us develop support materials?

Please follow the link below to register your interest.

www.cambridgeinternational.org/cambridge-for/teachers/teacherconsultants/

Copyright © UCLES 2019 (updated Nov 2020)

Cambridge Assessment International Education is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of the University of
Cambridge Local Examinations Syndicate (UCLES), which itself is a department of the University of Cambridge.

UCLES retains the copyright on all its publications. Registered Centres are permitted to copy material from this booklet for their own internal use. However, we
cannot give permission to Centres to photocopy any material that is acknowledged to a third party, even for internal use within a Centre.
Contents

Contents ...................................................................................................................................................................................................................................................... 3
Introduction .................................................................................................................................................................................................................................................. 4
1. The fundamentals of accounting ............................................................................................................................................................................................................. 7
2. Sources and recording of data ................................................................................................................................................................................................................ 9
3. Verification of accounting records ......................................................................................................................................................................................................... 12
4. Accounting procedures .......................................................................................................................................................................................................................... 15
5. Preparation of financial statements ....................................................................................................................................................................................................... 19
6. Analysis and interpretation .................................................................................................................................................................................................................... 27
7. Accounting principles and policies ......................................................................................................................................................................................................... 30
Scheme of Work

Introduction
This scheme of work has been designed to support you in your teaching and lesson planning. Making full use of this scheme of work will help you to improve both
your teaching and your learners’ potential. It is important to have a scheme of work in place in order for you to guarantee that the syllabus is covered fully. You
can choose what approach to take and you know the nature of your institution and the levels of ability of your learners. What follows is just one possible approach
you could take and you should always check the syllabus for the content of your course.
Suggestions for independent study (I) and formative assessment (F) are also included. Opportunities for differentiation are indicated as Extension activities; there is
the potential for differentiation by resource, grouping, expected level of outcome, and degree of support by teacher, throughout the scheme of work. Timings for
activities and feedback are left to the judgment of the teacher, according to the level of the learners and size of the class. Length of time allocated to a task is another
possible area for differentiation.

Guided learning hours

Guided learning hours give an indication of the amount of contact time you need to have with your learners to deliver a course. Our syllabuses are designed around
130 hours for Cambridge courses. The number of hours may vary depending on local practice and your learners’ previous experience of the subject. The table below
give some guidance about how many hours we recommend you spend on each topic area.

Topic Suggested teaching time (hours / % of the course)

1. The fundamentals of accounting It is recommended that this unit should take about 5 hours / 4% of the course

2. Sources and recording of data It is recommended that this unit should take about 36 hours / 28% of the course

3. Verification of accounting records It is recommended that this unit should take about 16 hours / 12% of the course

4. Accounting procedures It is recommended that this unit should take about 16 hours / 12% of the course

5. Preparation of financial statements It is recommended that this unit should take about 40 hours / 31% of the course

6. Analysis and interpretation It is recommended that this unit should take about 12 hours / 9% of the course

7. Accounting principles and policies It is recommended that this unit should take about 5 hours / 4% of the course

4
 Scheme of Work
Resources
You can find the endorsed resources to support this syllabus on the Published resources tab of the syllabus page on our public website here Endorsed textbooks
have been written to be closely aligned to the syllabus they support, and have been through a detailed quality assurance process. All textbooks endorsed by
Cambridge International for this syllabus are the ideal resource to be used alongside this scheme of work as they cover each learning objective. In addition to reading
the syllabus, teachers should refer to the updated specimen assessment materials.
Tools to support remote teaching and learning – Click here to find out about and explore the various online tools available for teachers and learners.

School Support Hub

The School Support Hub www.cambridgeinternational.org/support is a secure online resource bank and community forum for Cambridge teachers, where you can
download specimen and past question papers, mark schemes and other teaching and learning resources. We also offer online and face-to-face training; details of
forthcoming training opportunities are posted online. This scheme of work is available as PDF and an editable version in Microsoft Word format; both are available on
the School Support Hub at www.cambridgeinternational.org/support. If you are unable to use Microsoft Word you can download Open Office free of charge from
www.openoffice.org

Websites
This scheme of work includes website links providing direct access to internet resources. Cambridge Assessment International Education is not responsible for the
accuracy or content of information contained in these sites. The inclusion of a link to an external website should not be understood to be an endorsement of that
website or the site's owners (or their products/services).
The website pages referenced in this scheme of work were selected when the scheme of work was produced. Other aspects of the sites were not checked and only the
particular resources are recommended.

5
Scheme of Work
How to get the most out of this scheme of work – integrating syllabus content, skills and teaching strategies
We have written this scheme of work for the Cambridge IGCSE / O Level Accounting syllabuses and it provides some ideas and suggestions of how to cover the
content of the syllabus. We have designed the following features to help guide you through your course.

Learning objectives help your learners by making Suggested teaching activities give you lots of
it clear the knowledge they are trying to build. Pass ideas about how you can present learners with
these on to your learners by expressing them as new information without teacher talk or videos. Try
‘We are learning to / about…’. more active methods which get your learners
motivated and practising new skills.
Syllabus ref. Learning objectives Suggested teaching activities

1.1 The understand and Class discuss the role of the book-keeper and the accountant
purpose of explain the
Learners list the businesses in the local high street, shopping centre, local manufacturing
accounting difference
businesses, other local businesses such as estate agents, etc. (I) Independent
between book-
keeping and This can lead on to an explanation of the different types of businesses. study (I) gives
accounting your learners
Extension activities provide your In small groups the learners can share their lists and then categorise each business listed. (I)
the opportunity
more able learners with further
state the to develop
Class discuss the duties of a book-keeper and an accountant by one of the businesses listed
challenge beyond the basicpurposes
content of their own
can follow
of the course. Innovation and
measuring ideas and
independent learning are the basis profit
business Extension activity: It is useful to refer to articles in the local press (or local knowledge) about
understanding
of these activities. and loss businesses which have recently closed. For a comparison local businesses which arewith direct
expanding can be referred to. Learners can be asked to offer suggestions on why some input from you.
businesses have closed and why others are expanding

Past and specimen papers

Please note, past paper questions are provided for exemplification only and weightings of past paper questions prior to 2020 will longer be relevant for assessment
from 2020. Past/specimen papers and mark schemes are available to download at www.cambridgeinternational.org/support (F)

7110 June 2017 Paper 22 Question 1e, Question 1f

Past papers, specimen papers and mark schemes are available Formative assessment (F) is on-going assessment which
for you to download at: www.cambridgeinternational.org/support informs you about the progress of your learners. Don’t forget to
leave time to review what your learners have learnt, you could
Using these resources with your learners allows you to check their try question and answer, tests, quizzes, ‘mind maps’, or ‘concept
progress and give them confidence and understanding. maps’. These kinds of activities can be found in the scheme of
work.

6
Scheme of Work

1. The fundamentals of accounting

Syllabus ref. Learning objectives Suggested teaching activities

1.1 The purpose of Understand and Discuss as a class, the role of the book-keeper and the accountant.
accounting explain the difference
Learners list the businesses in the local high street, shopping centre, local manufacturing businesses, other
between book-keeping
local businesses such as estate agents, etc. (I)
and accounting
This can lead on to an explanation of the different types of businesses.
State the purposes of
measuring business In small groups learners share their lists and then categorise each business listed. (I)
profit and loss
Class discuss the duties of a book-keeper and an accountant by one of the businesses listed can follow.
Explain the role of
Class discuss the purposes of measuring business profit and loss.
accounting in providing
information for Extension activity: It is useful to refer to articles in the local press (or local knowledge) about businesses
monitoring progress which have recently closed. For a comparison local businesses which are expanding can be referred to.
and decision-making Learners can be asked to offer suggestions on why some businesses have closed and why others are
expanding.
The lists prepared for the different types of businesses can also be used as the basis of a class discussion of
the need for accounting and the role it plays in decision-making.
Learners list why people may be interested in the information in the accounting records and the sorts of
decisions they may need to make (I). Build up a central list on the board of the types of decisions which may
need to be made.

1.2 The accounting Explain the meaning of Explain the meaning of the terms assets and liabilities.
equation assets, liabilities and
Prepare a series of cards with examples of assets and liabilities. Working individually, Learners classify each
owner’s equity
example. (I)
Explain and apply the
Introduce the term capital.
accounting equation
Introduce the accounting equation.
Learners re-arrange the accounting equation mathematically. (I)
Provide a few exercises where the learners have to calculate the missing element of the equation. (I)

7
Scheme of Work

Syllabus ref. Learning objectives Suggested teaching activities

Present a simple statement of financial position on the board or PowerPoint (this can be two-sided and does
not have to make distinctions between the types of assets and liabilities). Demonstrate the effect of
transactions on the contents of the statement.
Individual learners can be invited to make the changes on the board or PowerPoint.
Learners prepare a few statements of financial position after a few transactions have taken place, either
working alone or in groups. (I)

Past and specimen papers

Please note, past paper questions are provided for exemplification only and weightings of past paper questions prior to 2020 will longer be relevant for
assessment from 2020. Past/specimen papers and mark schemes are available to download at www.cambridgeinternational.org/support (F)
7110 Jun 2017 Paper 22 Question 1e – f

8
 Scheme of Work

2. Sources and recording of data

Syllabus ref. Learning objectives Suggested teaching activities

2.1 The double entry Outline the double Explain why it is impractical to prepare a new statement of financial position after each transaction (reference
system of book- entry system of book- can be made to the statements prepared under 1.2).
keeping keeping
Prepare a pro-forma ledger account on the board or on a PowerPoint and explain the use of the columns.
Process accounting
Prepare a number of blank ledger accounts on the board or a PowerPoint and demonstrate the double entry
data using the double
system of book-keeping.
entry system
Use one of the exercises completed when preparing statements of financial position after a few transactions, to
Prepare ledger
demonstrate the double entry exercises. Invite individual learners to make the double entries on the board. (I)
accounts
Learners work through double entry exercises. (I)
Post transactions to
the ledger accounts It is essential that learners have a thorough knowledge of double entry so plenty of practice is required. The
exercises can get progressively more difficult with different types of transactions being introduced. (I)
Balance ledger
accounts as required Extension activity: Before actually teaching balancing of ledger accounts learners calculate how much cash is
and make transfer to left at the end of the month, the total sales for the month etc. This can then be used as the basis for teaching
financial statements the correct way to balance ledger accounts.
Interpret ledger After year-end financial statements have been taught, the ledger can be re-visited and year-end transfers
accounts and their introduced. Again, plenty of practice is essential. (I)
balances
Display a completed ledger account on the board or a PowerPoint. Class discuss the meaning of the entries
Recognise the division within the account. The importance of precise and complete descriptions of the entries must be emphasised.
of the ledger into the Learners work through similar exercises individually. (I)
sales ledger, the
Extension activity: In pairs, learners prepare a completed ledger account. This is then passed to another pair
purchases ledger and
of learners who should interpret the account and produce a list of transactions which are recorded in the
the nominal (general)
ledger account. The two groups then get together and discuss the results.
Extension activity: Discuss the viability of recording every transaction in the same ledger. Encourage learners
to identify a better system of recording transactions.
Prepare a series of cards with the names of accounts. Divide learners into pairs. One learner holds up each
card and the other names the ledger in which that account would be found. (I)

9
Scheme of Work

Syllabus ref. Learning objectives Suggested teaching activities

2.2 Business Recognise and Discuss as a class, the documents which may be issued during the purchase and sale of goods. Encourage
documents understand the learners to bring in any documents they or their family may have obtained.
following business
Explain any business documents which are not familiar to learners.
documents: invoice,
debit note, credit note, Provide a few partially complete documents and ask learners, working individually to complete them by
statement of account, inserting any missing words and figures. (I)
cheque, receipt
Ask learners, working in individually or in pairs to prepare a series of business documents for a complete
Complete pro-forma transaction (sales or purchase/ returns/payment) and then exchange them with another learner or group for
business documents peer assessment. (I)
Understand the use of Extension activity: Learners write on each document how many copies would be required, by whom and for
business documents what purpose.
as sources of
Class discuss the use of business documents as sources of information. Build up a diagram on the board or
information: invoice,
PowerPoint to show how documents are used to record transactions.
credit note, cheque
counterfoil, paying-in
slip, receipt, bank
statement

2.3 Books of prime Explain the advantage Prepare a set of business documents (sales and purchase invoices, credit notes, debit notes, cheques, paying-
entry of using various books in slips, etc.). Divide the learners into groups as give each group a set of documents. Ask each group to enter
of prime entry the documents in the appropriate books of prime entry and ledger accounts. (I)
Explain the use of and Once the entries have been made, exchange the accounting records with another group for peer assessment.
process accounting (I)
data in the books of
As with the basic double entry exercises, it is essential that learners have a thorough understanding so plenty
prime entry: cash
of practice is required. The exercises can get progressively more difficult with different types of transactions
book, petty cash book,
being introduced. (I)
sales journal,
purchases journal, Discuss the two types of discount with the learners and draw from them the reasons for these discounts.
sales returns journal,
Prepare a few short exercises involving the calculation of trade discount and cash discount. (I)
purchases returns
journal and the general Introduce learners to a two column and a three-column cash book by displaying a template on the board or
journal PowerPoint.
Demonstrate how transactions are entered in the cash book and posted to the ledger. Individual learners can
be invited to make the double entries on the board. (I)

10
 Scheme of Work

Syllabus ref. Learning objectives Suggested teaching activities

Post the ledger entries Learners work through double entry exercises involving books of prime entry and the posting to the ledger. (I)
from the books of
These can get progressively more difficult.
prime entry
Extension activity: Ensure that at least one of the exercises results in a bank overdraft. Discuss with the
Distinguish between
learners how this arose and how it could have been avoided.
and account for trade
discounts and cash Extension activity: Provide learners with a list of cash transactions and ask them to determine, giving a
discounts reason, which could be regarded as petty.
Explain the dual Demonstrate the use of a petty cash book and the posting to the ledger.
function of the cash
Provide some learners with petty cash voucher and nominate one learner to act as petty cashier who will then
book as a book of
prime entry and as a provide the others with “pretend” cash in exchange for the vouchers. The other learners can record these
ledger account for transactions in a petty cashbook on the board. This can then be used to demonstrate the restoration of the
imprest. (I)
bank and cash
Learners work though exercises involving petty cash and the posting to the ledger. These can get progressively
Explain the use of and
more difficult so that they involve the preparation of a cash book as well as a petty cash book. (I)
record payments and
receipts made by bank
transfers and other
electronic means
Explain the apply the
imprest system of
petty cash

Past and specimen papers

Specimen Paper 2 Question 1, Question 3e

7110 Jun 2017 Paper 22 Question 1a – b
7110 Nov 2017 Paper 21 Question 1b
0452 Mar 2017 Paper 22 Question 1a
0452 Jun 2017 Paper 22 Question 1a
0452 Nov 2017 Paper 22 Question 1a 2

11
Scheme of Work

3. Verification of accounting records

Syllabus ref. Learning objectives Suggested teaching activities

3.1 The trial balance Understand that a trial Make use of an exercise previously worked through by the learners to demonstrate the preparation of a trial
balance is a statement balance.
of ledger balances on
Use this to explain what a trial balance is and why it is used.
a particular date
Learners work through exercises involving the preparation of trial balances. These can get progressively more
Outline the uses and
difficult so that they involve the calculation of missing items such as capital. (I)
limitations of a trial
balance Extension activity: In pairs, learners establish a list of what sort of items goes on each side of the trial
balance.
Prepare a trial balance
from a given list of Use the lists provided by learners to draw up a table on the board covering the rules for the entries in a trial
balances and amend a balance.
trial balance which
contains errors Display a list of errors which could have occurred (reversal, omission, etc.). In groups, or individually, learners
consider how each of these errors affects the trial balance. (I)
Identify and explain
Present learners with a handout containing a short double-entry exercise and answer. The answer should
those errors which do
contain examples of each of the errors which will not be revealed by a trial balance. Individually or in pairs
not affect the trial
learners identify the errors which have been made. (I)
balance: commission
compensating Working in groups, learners should be asked to identify one error from each category. Exchange these with the
complete reversal, list produced by a different group. Each group must identify the type of error and state how that error can be
omission original entry corrected. (I)
principle

3.2 Correction of Correct errors by Display a list of errors. Class discuss how those errors could be corrected.
errors means of journal
Re-visit the general principle of journal entries. Demonstrate the correction of errors by means of journal
entries
entries.
Explain the use of a
Individual learners can be invited to make journal entries on the board. (I)
suspense account as a
temporary measure to Display a trial balance with an imbalance and explain the use of a suspense account.
balance the trial
Provide a list of examples of errors which affect the agreement of the trial balance and demonstrate the entries
balance
required to correct those errors in the journal and the suspense account.

12
 Scheme of Work

Syllabus ref. Learning objectives Suggested teaching activities

Correct errors by Prepare a series of cards each containing an error. Learners prepare entries to correct the errors. Once the
means of suspense entries have been made the learners exchange their answers for peer assessment. (I)
accounts
Extension activity: Before teaching the effect of errors on the financial statements, learners discuss how the
Adjust a profit or loss errors they have just corrected may have affected the profit calculation and the items in the statement of
for an accounting financial position.
period after the
Provide a list of errors and ask the learners to state which affect the profit calculation and which affect the
correction of errors
statement of financial position. (I)
Understand the effect
Demonstrate the preparation of a statement of revised profit.
of correction of errors
on a statement of Demonstrate the effect of errors on the statement of financial position.
financial position
Learners work though exercises involving correction of errors using the journal and a suspense account. These
can get progressively more difficult. (I)

3.3 Bank reconciliation Understand the use Class discuss known banking terms (may be able to link up with their business studies lessons).
and purpose of a bank
Lead a discussion about bank statements. Do the learners have their own bank accounts? Do their parents
statement
have a bank account? Do they keep their own records of money in and money out? Does this always agree
Update the cash book with the balance shown on the bank statement? Compile a list of reasons for the differences on the board.
for bank charges, bank
Learners write down how each of the each of the items on the list would affect the cash balance. (I)
interest paid and
received correction of Prepare a list of transactions involving money in and out of the bank. Invite one learner to act as a trader and
errors, credit transfers, another to act as a bank employee. Each requires a board or flip chart and enters the transactions from their
direct debits, dividends point of view as “directed” by the other learners. (I)
and standing orders
The differences in the entries made and the balances shown on the two documents can be discussed.
Understand the
Demonstrate the up-dating of the bank columns of a cash book. Individual learners can be invited to make the
purpose or and
entries on the board. (I)
prepare a bank
reconciliation Extension activity: Before actually teaching preparation of a bank reconciliation statement ask learners,
statement to include working individually or in pairs, to try to prepare a statement to show why bank statement balance does not
bank errors, agree with the updated cash book balance. This can then be used as the basis for teaching the correct way to
uncredited deposits prepare a bank reconciliation statement.
and unpresented
cheques Learners work though exercises involving updating the cash book and preparing a bank reconciliation
statement. These can get progressively more difficult such as including overdrawn balances. (I)

13
Scheme of Work

Syllabus ref. Learning objectives Suggested teaching activities

3.4 Control accounts Understand the Re-visit the preparation of ledger accounts of credit customers and credit suppliers and the division of the
purposes of purchases ledger.
ledger and sales
Class discuss the purposes of control accounts. Build up a list on the board.
ledger control
accounts Prepare cards containing items which may be found in a control account. In pairs or small groups learners
name the control account in which the item would appear and whether it is a debit or a credit entry. (I)
Identify the books of
prime entry as sources The information on the cards and the learners’ lists can be used to demonstrate the preparation of a purchases
of information for the ledger and a sales ledger control account. Individual learners can be invited to make entries on the board. (I)
control account entries
Re-visit the preparation of books of prime entry.
Prepare purchases
ledger and sales Discuss the advantages of obtaining the information from these books rather than the ledger accounts.
ledger control Learners make a list of which book of prime entry would be used to obtain the information required to prepare
accounts to include control accounts. (I)
credit purchases and
sales, receipts and Learners work through exercises involving the preparation of control accounts. (I)
payments, cash Introduce more difficult aspects.
discounts, returns,
irrecoverable debts, A debit balances on a purchases ledger control account can be demonstrated by using a simple ledger account
dishonoured cheques, of a credit supplier who has been overpaid by the trader. Get the learners to suggest how this will appear in a
interest on overdue purchases ledger control account. Discuss reasons for “minority” balances. Learners prepare control accounts
accounts, contra containing such balances. (I)
entries, refunds, Two learners to act as traders who buy from and sell to each other. Each learner will need a board or flip chart.
opening and closing Following “directions” from the other learners they prepare the accounts of the two traders as they would
balance (debit and appear in each other’s books. (I) Discuss with learners how one account can be set off against the other.
credit within each
account Learners prepare control accounts including more challenging items such as contras and minority balances. (I)

Past and specimen papers

Please note, past paper questions are provided for exemplification only and weightings of past paper questions prior to 2020 will longer be relevant for
assessment from 2020. Past/specimen papers and mark schemes are available to download at www.cambridgeinternational.org/support (F)

Specimen Paper 2 Question 4

7110 Jun 2017 Paper 21 Question 1d – f, Question 2
0452 Mar 2018 Paper 22 Question 1a – c, Question 4a – b

14
 Scheme of Work

4. Accounting procedures

Syllabus ref. Learning objectives Suggested teaching activities

4.1 Capital and revenue Distinguish between Extension activity: Before teaching this topic ask learners, working in pairs, to write down the name of a
expenditures and and account for capital local business and then to make a list of say 8 payments and 8 receipts which that business may have. Ask
receipts expenditure and them to try to divide these receipts and payments into different classes (giving clues to the learners about
revenue expenditure considering the length of time the payment/receipt will last, whether something tangible was sold/purchased,
etc.)
Distinguish and
account for capital Follow this up with a formal introduction to capital and revenue.
receipts and revenue
Provide learners with a table containing say 20 transactions and four columns labelled capital expenditure,
receipts
revenue expenditure, capital receipt, revenue receipt. Leaners tick the appropriate column for each item and
Calculate and exchange sheets with another learner for peer assessment. (I)
comment on the effect
Extension activity: Learners are provided with the same list of transactions which has been incorrectly
on profit of incorrect
completed. Before formally teaching profit correction, ask learners, working in groups, to calculate the effect
treatment
of the errors on both the profit and the assets.
Calculate and
This can then be used as the basis for teaching the correct way to prepare a statement of corrected profit and
comment on the effect
appropriate extracts from a statement of financial position.
on asset valuations of
incorrect treatment Learners complete exercises classifying capital and revenue items and preparing statements of corrected
profit.
These can get progressively harder and vary in format. (I)

4.2 Accounting for Define depreciation Class discuss why non-current assets lose value and compile a list on the board.
depreciation and
Explain the reasons for The topic of capital and revenue can be briefly re-visited.
disposal of non-current
accounting for
assets If not already covered, learners can be introduced to the accounting principles of matching, prudence and
depreciation
historic cost and how they apply to non-current assets. If accounting principles gave already been taught,
Name and describe these three principles can be re-visited.
the straight-line,
Introduce the main methods of calculating depreciation and demonstrate the calculations involved.
reducing balance and
revaluation methods of Provide exercises for the learners to complete involving calculations of depreciation using the three methods.
depreciation Learners exchange books for peer assessment. (I)
Prepare ledger
accounts and journal

15
Scheme of Work

Syllabus ref. Learning objectives Suggested teaching activities

entries for the Demonstrate the ledger entries to record depreciation. Individual learners can be invited to make entries on
provision of the board. (I)
depreciation
Follow a similar pattern for recording depreciation in the journal and learners complete exercises to record
Prepare ledger deprecation in the books of account. (I)
accounts and journal
Introduce the disposal of a non-current asset by demonstrating the calculation of profit/loss on disposal on the
entries to record the
board.
sale of non-current
assets, including the Provide exercises for the learners involving calculation of profit/loss on disposal of a non-current asset.
use of disposal Learners to exchange books for peer assessment. (I)
accounts
Demonstrate the ledger entries to record the disposal of a non-current asset.
Follow a similar pattern for recording depreciation in the journal.
Learners complete exercises to record deprecation in the books of account. (I) The exercises can get
progressively harder.

4.3 Other payables and Recognise the If not already covered, learners can be introduced to the accounting principle of matching and how it applies
other receivables important of matching to expenses and items of income. If accounting principles have already been taught, this principle can be re-
costs and revenues visited.
Prepare ledger Illustrate the matching of expenses and incomes to the financial year by means of a “time line”.
accounts and journal
Ask learners (working individually or in pairs) to complete a series of calculations of increasing level of
entries to record
difficulty involving the calculation of the expense or income for the year. Encourage the use of “time-lines”. (I)
accrued and prepaid
expenses Demonstrate the ledger entries to record a prepaid expense and an accrued expense. Repeat using a similar
exercise but inviting individual learners to make entries on the board. (I)
Prepare ledger
accounts and journal Follow a similar pattern for a prepaid and an accrued item of income and learners complete exercises to
entries to record record accrued and prepaid income and expenses in the ledger. (I)
accrued and prepaid
incomes Demonstrate the journal entries to record a prepaid expense and an accrued expense. Repeat using a similar
exercise but inviting individual learners to make entries on the board. (I)
Learners complete exercises to record accrued and prepaid income and expenses in the journal. (I)

4.4 Irrecoverable debts Understand the Brief explanation of the meaning of the term irrecoverable debts.
and provision for meaning of
doubtful debts irrecoverable debts

16
 Scheme of Work

Syllabus ref. Learning objectives Suggested teaching activities

and recovery of debts Extension activity: Before teaching this topic, ask learners, working in pairs, to write down what book-
written off keeping entries they think will be required and to list a few reasons why an irrecoverable debt occurs and
steps which could be taken to try to avoid irrecoverable debts.
Prepare ledger
accounts and journal Class discuss why irrecoverable debts occur and how they can be reduced. Compile lists on the board.
entries to record
Demonstrate the ledger and journal entries required to write off irrecoverable debts.
irrecoverable debts
Explain what is meant by recovery of debts written off. Demonstrate ledger and journal entries to record
Prepare ledger
these.
accounts and journal
entries to record Learners complete exercises involving irrecoverable debts and recovery of debts written off. (I)
recovery of debts
written off Explanation of a provision for doubtful debts.

Explain the reasons for If not covered, learners can be introduced to the accounting principles of matching and prudence and how
they apply to a provision for doubtful debts. If accounting principles have already been taught, these
maintaining a provision
principles can be re-visited.
for doubtful debts
Demonstrate the ledger entries required for creating and adjusting a provision for doubtful debts. Individual
Prepare ledger
learners can be invited to make the entries on the board. (I)
accounts and journal
entries to record the Demonstrate the journal entries required to creating and increase a provision for doubtful debts. Follow a
creation or, and similar pattern for a provision which requires reducing. Invite individual learners to make entries on the board.
adjustments to, a (I)
provision for doubtful
debts Learners complete exercises involving irrecoverable debts, recovery of debts written off and creating and
adjusting a provision of doubtful debts. (I)
In pairs or small groups, learners prepare a few ledger accounts (these could include the account of one or
more credit customers, an irrecoverable debts account, a debts recovered account and a provision for
doubtful debts account). Exchange books with other groups and write down an interpretation of each of the
entries in the accounts. (I)

4.5 Valuation of Understand the basis Explanation of the principles of inventory valuation.
inventory of the valuation of
If not covered, learners can be introduced to the accounting principle of prudence and how it applies to
inventory at the lower
inventory valuation. If accounting principles have already been taught, this principle can be re-visited.
of cost and net
realisable value Provide details of cost, selling price and amendments such as carriage, damaged goods, etc. for a few items
of inventory. In groups, learners prepare a simple inventory valuation statement. Exchange books for peer
assessment. (I)

17
Scheme of Work

Syllabus ref. Learning objectives Suggested teaching activities

Prepare simple Learners complete a few inventory valuation statements. (I)

inventory valuation
Re-visit profit correction and the effects of errors on asset valuation.
statements
Demonstrate the effects on the profit and the assets of incorrect valuation of inventory.
Recognise the
importance of Learners, work individually, to complete a few short exercises on the effect on financial statements of
valuation of inventory incorrect inventory valuation. (I)
and the effect of an
incorrect valuation of
inventory on gross
profit, profit for the
year, equity and asset
valuation

Past and specimen papers

Please note, past paper questions are provided for exemplification only and weightings of past paper questions prior to 2020 will longer be relevant for
assessment from 2020. Past/specimen papers and mark schemes are available to download at www.cambridgeinternational.org/support (F)
Specimen Paper 2 Question 3a – d
0452 Nov 2017 Paper 22 Question 3a – e, Question 5c – d
7110 Nov 2017 Paper 21 Question 2a – d

18
 Scheme of Work

5. Preparation of financial statements

Syllabus ref. Learning objectives Suggested teaching activities

5.1 Sole traders Explain the advantages Extension activity: Before explaining the advantages and disadvantages of operating as a sole trader ask
and disadvantages of learners, working in pairs, to list as many as they can.
operating as a sole
Class discuss advantages and disadvantages of operating as a sole trader, compiling lists on the board.
trader
Re-visit the introduction to accounting and the reasons for preparing financial statements.
Explain the importance
of preparing income Ask learners, working individually, to make a list of sole-trader businesses and to divide them into trading
statements and businesses and service businesses. (I)
statements of financial
Using a prepared list of suitable items, demonstrate the preparation of an income statement for a trading
position
business.
Explain the difference
Use a simple example initially. Explain how the cost of sales is calculated.
between a trading
business and a service Provide learners with a template for a typical income statement for a trading business. Ask them to work
business through a few short exercises. (I)
Prepare income Demonstrate the effect of items such as returns, carriage, etc. and learners work through additional
statements for trading exercises, which get progressively more difficult. (I)
businesses and for
service businesses Class discuss how an income statement of a service business may differ from that of a trading business.

Understand that Demonstrate the preparation of an income statement of a service business.

statements of financial Learners work through exercises on the preparation of income statements of service businesses. (I)
position record assets
and liabilities on a Re-visit previous work on the preparation of elementary statements of financial position.
specified date Introduce the division of the assets and liabilities into different categories.
Recognise and define Prepare a series of cards with the names of assets and liabilities. Divide learners into pairs. One learner holds
the content or a up each card and the other names the section of the statement of financial position in which the item would
statement of financial be found (I)
position: non-current
assets, intangible Re-visit previous work on the effect of transactions on the items within a statement of financial position.
assets, current assets, Demonstrate how transactions will affect items within a balanced statement of financial position.
current liabilities, non-
current liabilities and Introduce the term “working capital”. Demonstrate how transactions can affect this.
capital

19
Scheme of Work

Syllabus ref. Learning objectives Suggested teaching activities

In pairs, learners work through exercises on how various transactions will affect statement of financial position
Understand the inter-
items. (I)
relationship of items in a
statement of financial Using a prepared list of items, demonstrate the preparation of a statement of financial position for a sole
position trader business.
Prepare statement of Provide learners with a template for a typical statement of financial position. Ask them to work through a few
financial position for short exercises, which can get progressively more difficult. (I)
trading businesses and
Demonstrate the preparation of an income statement and a statement of financial position using a balanced
service businesses
trial balance and show how items are “ticked off” as they are entered in the statements.
Make adjustments for
Learners complete exercises preparing financial statements from trial balances. Learners to exchange books
provision for
for peer assessment. (I)
depreciation using the
straight-line, reducing Re-visit previous work on depreciation of non-current assets (types, calculation, ledger entries, and journal
balance and revaluation entries) and demonstrate how depreciation is entered in the financial statements.
methods
Learners complete exercises involving the preparation of financial statements which include depreciation (I)
Make adjustments for
Re-visit previous work on accrued and prepaid incomes and expenses (calculation, ledger entries and journal
accrued and prepaid
expenses and accrued entries) and demonstrate how accruals and prepayments are entered in the financial statements.
and prepaid income Learners complete exercises involving the preparation of financial statements which include accrued and
prepaid items of income and expenses. (I)
Make adjustments for
irrecoverable debts and Re-visit previous work on irrecoverable debts, and provisions for doubtful debts (calculation, ledger entries,
provisions for doubtful and journal entries) and demonstrate how irrecoverable debts and provisions for doubtful debts are entered in
debts the financial statements.
Make adjustments for Learners complete exercises involving the preparation of financial statements which include irrecoverable
goods taken by the debts and a provision for doubtful debts. (I) and demonstrate how goods taken by the owner for personal use
owner for own use are recorded in the financial statements.
Learners work through double entry exercises. (I)
It is essential that learners have a thorough knowledge of the preparation of financial statements so plenty of
practice is required. The exercises can get progressively more difficult with different types of transactions
being introduced. (I)
The types of exercises can be varied – some working from a balanced trial balance, some from a list of
balances, some using information provided in prose format. The method of working through exercises can be
varied – some prepared individually, some in groups, some as a class exercise, some using templates and so
on.

20
 Scheme of Work

Syllabus ref. Learning objectives Suggested teaching activities

5.2 Partnerships Explain the advantages Extension activity: It may be able to link up with this topic in the business studies lessons.
and disadvantages of
Before explaining the advantages and disadvantages of forming a partnership ask learners, working in pairs,
forming a partnership
to list these advantages and disadvantages.
Outline the importance
Class discuss advantages and disadvantages of forming a partnership. Compile lists on the board.
and contents of a
partnership agreement Extension activity: Before explaining the importance and contents of a partnership agreement ask learners,
working in groups, to discuss why a partnership agreement is advisable and suggest suitable items for
Explain the purpose of
inclusion.
an appropriation
account Class discuss the reasons for and the composition of a partnership agreement. Compile lists on the board.
Prepare income Introduce learners to the terms interest on capital, interest on drawings, partners’ salaries, and residual profit.
statements,
appropriation accounts Demonstrate the preparation of an appropriation account.
and statements of Provide learners with a template for a partnership appropriation account. Ask them to work through a few
financial positon short exercises. These should include both residual profits and residual losses. (I)
record interest on Explain how the preparation of an income statement, with adjustments, is exactly the same as that for a sole
partners’ loans, interest trader, and that the appropriation statement shows how the profit calculated in the income statement is
on capital, interest on shared between the partners.
drawings, partners’
salaries and the division Ask learners, working in pairs, to complete a few exercises involving the preparation of an income statement
of the balance of profit and appropriation account of a partnership business. (I)
or loss Explain the use of capital and current accounts and demonstrate how to prepare them, making use of one of
Make adjustments to the completed exercises preparing an income statement and an appropriation account. Individual learners
financial statements as can be invited to make the changes on the board or PowerPoint. (I)
detailed in 5.1 (sole Class discuss why these separate accounts are maintained.
traders)
Learners complete exercises involving the preparation of capital and current accounts (at least one of these
Explain the uses of and should include debit balances on a current account). (I)
difference between
capital and Extension activity: Working in groups, learners discuss how a debit balance on a current account may have
arisen and how it can be “removed”.
current accounts
Explain how the preparation of a statement of financial position is exactly the same as that for a sole trader
Draw up partners’ apart from the capital section.
capital and current
accounts in ledger Demonstrate the presentation of the capital section of a statement of financial position of a partnership,
account form and as making use of the exercise for which the capital and current accounts have just been prepared.

21
Scheme of Work

Syllabus ref. Learning objectives Suggested teaching activities

part of a statement of Learners work through a few exercises on the preparation of financial statements of partnerships, and the
financial positon capital and current accounts of the partners. (I)

5.3 Limited Explain the advantages Explain the meaning of the term limited liability. It may be possible to link up with the business studies
companies and disadvantages of lessons.
operating as a limited
Learners list the names of any local, national, and international limited companies they have heard of. Take
company
the opportunity to briefly mention the difference between price and public limited companies.
Understand the meaning
Extension activity: Before explaining the advantages and disadvantages of operating as a limited company
of the term limited
ask learners, working in groups, to draw up lists of these advantages and disadvantages. The groups can
liability
also compare a limited company with a partnership.
Understand the meaning
Class discuss the advantages and disadvantages of operating as a limited company. Compile lists on the
of the term equity
board. A list of similarities and differences between a limited company and as partnership can also be made.
Understand the capital
Explain the meaning of the term equity when applied to a limited company. This explanation can be expanded
structure of a limited
after teaching the capital structure.
company comprising
preference share Explain the capital structure of a limited company – the different types of shares (ordinary and preference)
capital, ordinary share how and why reserves arise and how the retained earnings arises.
capital, general reserve
Explain the difference between ordinary shares and preference shares and how these differ from debentures.
and retained earnings
It will be necessary to mention the difference between redeemable and non-redeemable preference shares in
Understand and order to teach learners the different treatment of these types of preference shares.
distinguish between
Explain how shareholders receive dividends but debenture holders receive interest.
issued, called-up and
paid-up share capital Ask learners, working in groups to complete short-answer questions, true/false questions and multiple choice
questions on the differences between ordinary shares, preference shares and debentures. (I)
Understand and
distinguish between Learners complete a series of short calculation exercises on the calculation of debenture interest, preference
share capital share dividend and ordinary share dividend, including interim dividends. Learners to exchange books for peer
(preference shares and assessment. (I)
ordinary shares) and
loan capital Prepare a series of cards with various terms connected to limited companies. Divide learners into pairs. One
(debentures) learner holds up each card and the other briefly states what is meant by that term. (I)

Prepare income Explain how the preparation of an income statement, with adjustments, is exactly the same as that for a sole
statements, statements trader.
of changes in equity and

22
 Scheme of Work

Syllabus ref. Learning objectives Suggested teaching activities

statements of financial Explain how the preparation of a statement of financial position is exactly the same as that for a sole trader
positon apart from the capital and reserves section.
Make adjustments to Explain the reason for the preparation of a statement of changes in equity.
financial statements as
Discuss the entries with the learners and demonstrate the preparation of a statement of changes in equity.
detailed in 5.1 (sole
traders) Provide learners with a template for a statement of changes in equity. Ask them to work through a few short
exercises. Learners can exchange books for peer assessment. (I)
Demonstrate the presentation of the capital and reserves section of a statement of financial position.
Ask learners, working individually, to work through a few exercises on the financial statements of limited
companies. (I)
Extension activity: Ask learners, working in pairs, to discuss how the items in a statement of financial
position may change as a result of various transactions e.g. issue of ordinary share, transfer to general
reserve, payment of a dividend, etc.

5.4 Clubs and Distinguish between Introduce the topic of clubs and societies by asking learners about any clubs or societies which they know of,
societies receipts and payments or of which they are a member.
accounts and income
Extension activity: Before explaining the topic further, ask learners, working in groups, to list the differences
and expenditure
between a club and a business. They can also list the ways in which a club raises its funds.
accounts
Class discuss the different clubs.
Prepare receipts and
payments accounts Re-visit the topic of cash books.
Prepare accounts for Re-visit the topic of capital and revenue expenditure.
revenue-generating
Demonstrate the preparation of a receipts and payments account. Individual learners can be invited to make
activities, e.g.
entries on the board. (I)
refreshments,
subscriptions Ask learners, working individually, to prepare receipts and payments accounts. One exercise could also
involve listing items which would not be included in the account and providing reasons for this exclusion. (I)
prepare income and
expenditure accounts Re-visit the preparation of income statements for businesses.
and statements of
financial position Demonstrate the preparation of an income statement for a trading activity of a club then learners complete a
few exercise on this topic. Learners to exchange books for peer assessment. (I)
Make adjustments to
financial statements as Re-visit the topic of accrued and pre-paid income and the use of a “time-line”.

23
Scheme of Work

Syllabus ref. Learning objectives Suggested teaching activities

detailed in 5.1 (sole Provide exercises and learners calculate the subscriptions relating to a financial year. (I)
traders)
Demonstrate the preparation of a subscriptions account and learners prepare subscriptions accounts. (I)
define and calculate the
Re-visit the preparation of an income statement of a business, including adjustments.
accumulated fund
Demonstrate the preparation of an income and expenditure account and learners complete exercises on the
preparation of income and expenditure accounts. (I)
In groups, learners make a list of the differences between a receipts and payments account and an income
and expenditure account. (I) Class discuss the lists prepared by the groups.
Explain what is meant by the accumulated fund of a club and how it arises.
Explain how the preparation of a statement of financial position is exactly the same as that for a business
except that the accumulated fund replaces the capital and demonstrate the presentation of this section of the
statement.
Ask learners, working individually, to complete exercises on the financial statements of clubs and societies. (I)
Extension activity: Before teaching the topic, ask learners, working in groups, to discuss how clubs can
raise funds for various purposes.

5.5 Manufacturing Distinguish between Introduce the topic of manufacturing accounts by asking learners to name any local, national, or international
accounts direct and indirect costs manufacturing businesses they have heard of.
Understand direct Extension activity: Before explaining the topic further, ask learners, working in groups, to list all the costs
material, direct labour, that may result from a named object. Vary the object to suit the learners e.g. if the learners are female, the
prime cost and factory cost of marking a garment; if the learners are male, the cost of making a motor bike, etc.
overheads
Class discuss the suggestions made by the groups. Make lists on the board or PowerPoint of the costs
Understands and make suggested. The lists should be divided into groups (but not headed at this point) to cover things like materials,
adjustments for work in labour costs, expenses, assets.
progress
These lists can then be broken down into factory costs and admin costs / direct costs and indirect costs /
Calculate factory cost of prime cost and cost of production.
production
Ask learners, working individually, to classify a list of costs. (I)
Prepare manufacturing
Demonstrate the preparation of a simple manufacturing account, then provide learners with a template for a
accounts, income
manufacturing account. Ask them to work through a few short exercises. Learners can exchange books for
statements and
peer assessment. (I)

24
 Scheme of Work

Syllabus ref. Learning objectives Suggested teaching activities

statement of financial Introduce the topic of work in progress and how this affects the cost of production and demonstrate the effect
position of work in progress on the simple manufacturing account used for demonstration.
Make adjustments to Re-visit the preparation of an income statement of a business, including adjustments and explain how the
financial statements as trading section of an income statement for a manufacturing business differs from that of a trading business.
detailed in 5.1 (sole
Demonstrate the transfer of the cost of production to the income statement.
traders)
Demonstrate how the three types of inventory of a manufacturer are presented in a statement of financial
position.
Ask learners, working individually, to complete exercises on the financial statements of a manufacturing
business. (I)

5.6 Incomplete records Explain the Briefly explain that not all businesses maintain a full set of accounting records.
disadvantages of not
Extension activity: Before giving further explanation ask learners, working in groups, to list any
maintaining a full set of
disadvantages which a trader may encounter if a full set of records is not maintained.
accounting records
Re-visit the accounting equation.
Prepare opening and
closing statements of Re-visit the preparation of the capital account of a sole trader to remind learners how profit and drawing affect
affairs capital.
Calculate profit or loss Demonstrate the calculation of profit from change in capital over time and ask learners, working individually,
for the year from to complete a few exercise on the calculation of profit. (I)
changes in capital over
time Demonstrate the preparation of opening and closing statements of affairs and the preparation of a capital
account to calculate profit.
Calculate sales,
Prepare cards listing names and amounts of assets and liabilities at the start and end of a trader’s financial
purchases, gross profit,
year. Ask the learners, working in pairs, to use the information on the cards to prepare opening and closing
trade receivables and
statements of affairs and the calculation of profit in a capital account. (I)
trade payables and
other figures from Re-visit the preparation of ledger accounts of credit customers and credit suppliers.
incomplete information
Demonstrate the entries in an account for total trade receivables and total trade payables (compare with
Prepare income control accounts which are similar but prepared from different sources and for a different purpose).
statements and
statements of financial Demonstrate how “missing” figures can be calculated from these total accounts.
position form incomplete
records

25
Scheme of Work

Syllabus ref. Learning objectives Suggested teaching activities

Make adjustments to Ask learners, working in groups, to complete exercises involving the calculation of “missing” figures. The
financial statements as exercises can get progressively more difficult. For example it may be necessary to prepare a bank account to
detailed in 5.2 (sole calculate the amount paid to trade payables before credit purchases can be calculated. (I)
traders)
Re-visit the preparation of financial statements of a sole trader, including adjustments.
Apply the techniques of
Ask learners, working individually, to complete exercises on the preparation of financial statements from
mark-up, margin and
incomplete information. (I)
inventory turnover to
arrive at missing figures Introduce the topic of calculating mark-up and margin and rate of inventory turnover.
Demonstrate calculations and then ask learners, working in pairs, to complete some calculations of these
items.
Demonstrate the application of these calculations to prepare the trading section of an income statement
which has missing information such as revenue, purchase, opening inventory, closing inventory, where it may
be necessary to “work backwards”.
Ask learners, working individually to complete exercises on the topic. These can get progressively more
difficult. For example introduce a scenario where part of the inventory was destroyed and part was salvaged.
(I)

Past and specimen papers

Please note, past paper questions are provided for exemplification only and weightings of past paper questions prior to 2020 will longer be relevant for
assessment from 2020. Past/specimen papers and mark schemes are available to download at www.cambridgeinternational.org/support (F)

Specimen Paper 2 Question 2a – c, Question 5a

0452 Nov 2017 Paper 22 Question 4a
0452 Jun 2017 Paper 21 Question 3a – b
0452 Mar 2018 Paper 22 Question 3
0452 Mar 2017 Paper 22 Question 3
0452 Jun 2017 Paper 22 Question 4a – c

26
 Scheme of Work

6. Analysis and interpretation

Syllabus ref. Learning objectives Suggested teaching activities

6.1 Calculation and Understand, calculate Provide each learner with a set of financial statements for a sole trader covering two financial years and a
understanding of and explain the sheet of formulae for the ratios covered by the syllabus.
accounting ratios importance of the
Briefly explain what each ratio shows.
following accounting
ratios: Demonstrate the calculation of these ratios for the first financial year.
• Gross margin Ask the learners, working individually, to calculate the ratios for the second financial year. (I)
• Profit margin Learners complete a few exercises involving ratio calculation. (I)
• Return on capital
• employed (ROCE)
Current ratio
• Liquid (acid test)
ratio
• Rate of inventory
turnover (times)
• Trade receivables
turnover (days)
• Trade payables
turnover (days)

6.2 Interpretation of Prepare and comment Class discussion comparing the ratios for the two years in the exercise involving the calculation of ratios for two
accounting ratios on simple statements financial years.
showing comparison of
Ask learners, working in pairs, to complete exercises on comparisons of results. (I)
results for different
years Re-visit previous work on the inter-relationship of items in a statement of financial position.
Make Extension activity: Before teaching the topic of recommendations for improving profitability and working
recommendations and capital provide learners with a set of financial statements and completed ratios. Ask learners working in groups,
suggestions for to discuss the information provided and suggest how the various ratios can be improved.
improving profitability
Ask learners, working in groups, to complete exercise involving the calculation and interpretation of ratios and
and working capital
recommendations for improvement. (I)
Understand the
Re-visit the preparation of an income statement and the calculation of gross profit and profit for the year.
significance of the

27
Scheme of Work

Syllabus ref. Learning objectives Suggested teaching activities

difference between the Re-visit the calculation of gross margin and profit margin.
gross margin and the
Discuss with the learners the significance of the difference between these ratios.
profit margin as an
indicator of a Re-visit the calculation of the gross profit and profit for the year.
business’s efficiency
Discuss with the learners how these are related to the valuation of inventory, rate of inventory turnover and
Explain the other items in the financial statements.
relationship of gross
profit and profit for the
year to the valuation of
inventory, rate of
inventory turnover,
revenue, expenses
and equity

6.3 Inter-firm Understand the Briefly introduce the topic inter-firm comparison.
comparison problems of inter-firm
Extension activity: Before giving detailed explanations ask learners, working in groups, to make a list of
comparison
possible problems of trying to compare two different businesses (two specific businesses can be used for this
Apply accounting purpose).
ratios to inter-firm
Discuss the lists they have made and build up an overall list on the board.
comparison
Divide learners into groups. Provide each group with a set of financial statements for a sole trader and ask
them to calculate a set of accounting ratios. (I)
Class discuss the ratios calculated for each business. Discuss which business has produced better results and
why and how the other businesses may be able to improve their ratios.
Ask learners, working in pairs, to complete exercises involving the comparison of ratios of different businesses.
(I)

6.4 Interested parties Explain the uses of

accounting information
by the following
interested parties for
decision-making:
• owners
• managers

28
 Scheme of Work

Syllabus ref. Learning objectives Suggested teaching activities

• trade payables
• banks
• investors
• club members
• other interested
parties such as
government tax
authorities, etc.

6.5 Limitations of Be able to recognise Re-visit the work on problems of inter-firm comparison.
accounting statements the limitations of
Discuss with learners the factors which limit the financial statements. You may need to explain the first factor
accounting statements
but, by asking directed questions, it may be possible to get learners to provide examples of the last two factors.
due to such factors as:
• historic cost
• difficulties of
definition
• non-financial
aspects

Past and specimen papers

Please note, past paper questions are provided for exemplification only and weightings of past paper questions prior to 2020 will longer be relevant for
assessment from 2020. Past/specimen papers and mark schemes are available to download at www.cambridgeinternational.org/support (F)

Specimen Paper 2 Question 2d, Question 5b – e

0452 Nov 2017 Paper 21 Question 4
7110 Nov 2017 Paper 21 Question 4
0452 Nov 2017 Paper 22 Question 4
0452 Mar 2017 Paper 22 Question 2f
0452 Mar 2018 Paper 22 Question 1d

29
Scheme of Work

7. Accounting principles and policies

Syllabus ref. Learning objectives Suggested teaching activities

Explain and recognise

7.1 Accounting Re-visit previous work on accruals and prepayments, accounting equation and double entry.
the application of the
principles
following accounting Explain the accounting principles of matching, business entity, consistency and duality.
principles:
Divide learners into groups. Ask each group to provide an example from their previous studies of each of the
• matching
above topics. (I)
• business entity
• consistency Describe the principles of going concern, historic cost, materiality, money measurement, prudence and
• duality realisation.
• going concern Demonstrate the practical application of the concepts referring to previous topics such as double entry, capital
• historic cost and revenue etc.
• materiality
• money Prepare a series of cards with the names of accounting principles. Divide learners into pairs. One learner
measurement holds up each card and the other briefly describes that accounting principle (alternatively the cards could give
• prudence the description and the learner be asked to name the principle). (I)
• realisation Ask learners, working individually to complete theoretical exercises on accounting principles. (I)

Recognise the influence

7.2 Accounting policies Class discuss general differences between one country and another.
of international
accounting standards Re-visit the previous work on inter-firm comparison and link to the additional problems of comparing
and understand the businesses based in different countries.
following objectives in
Explain the importance of international accounting standards.
selecting accounting
policies: Explain the four accounting objectives listed on the syllabus.
• comparability
• relevance
• reliability
• understandability

Past and specimen papers

Please note, past paper questions are provided for exemplification only and weightings of past paper questions prior to 2020 will longer be relevant for
assessment from 2020. Past/specimen papers and mark schemes are available to download at www.cambridgeinternational.org/support (F)

30
Cambridge Assessment International Education
The Triangle Building, Shaftesbury Avenue, Cambridge, CB2 8EA
t: +44 1223 553554
e: [email protected] www.cambridgeinternational.org

Copyright © UCLES September 2019 (updated Nov 2020)