2012 School-assessed Coursework Report. Accounting: Units 3 and 4 GENERAL COMMENTS

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1 2012 School-assessed Coursework Report Accounting: Units 3 and 4 This report is provided for the first year of implementation of this study and is based on the coursework audit and Victorian Curriculum and Authority (VCAA) statistical data. GENERAL COMMENTS For the most part schools were able to satisfy the requirements of the current VCE Accounting Study Design ( ). One issue that some schools still seem to be challenged by is the information communication technology (ICT) requirement of the study. Overall there are some very pleasing examples of how assessment in accounting can be dynamic and provide a good mix of higher-order thinking questions as well as a variety of practical questions. Where schools have integrated the use of ICT with other manual tasks there tends to be a strong link to a wider range of key skills. Where the decision has been made to complete a separate stand-alone ICT task this has not necessarily been the case. The use of spreadsheets allows schools to mirror the format of the exam in their school-based assessments, which can be very useful for students. ICT is a very valuable component of the course, however it continues to be a hurdle for some schools. Some issues around the use of ICT that have been highlighted in the audit process this year include the following: By far the most pressing ICT issue is that, more often than not, schools do not provide enough information on how the marks are combined within the outcome and the unit to ensure that at least 30 marks are ICT based. It was common for schools to have a folio of tasks or structured questions with the marks equating to more than the marks allocated for the outcome: it was then not fully explained how the marks were combined and reduced to a mark out of 50, and how the ICT-based marks fit into that. Taking the time to fully explain this element would have made it easier for the reviewing team to ascertain whether the ICT requirement had been met. The use of commercial software packages and stand-alone ICT tasks was also an issue. While it is a requirement of Unit 2 that students use a commercial package, this is not a requirement of Unit 3 or 4. Where commercial packages were used in Unit 3 and 4, marks were often allocated to the setting up of the business file, and sometimes to the preparation of the accounting reports, which in a computerised package is completed automatically. These are not key skills in Unit 3 or 4 so the allocation of marks is questionable. If schools feel they would like to use a commercial package, this could be modified by providing the students with a business file that has been already set up and then asking them to record a range of transactions specific to Unit 3 or 4, supported by some theory questions linked to their effects on the accounting reports. The current study design has clarified what is considered to be appropriate ICT and for that reason it is very clear that often tasks can be partially completed using ICT with the theoretical component not counting in the ICT requirement. There were a number of good examples of this. However, some schools did not clearly distinguish between these two elements. 1

2 Some schools that were sampled tended to have one ICT-based task, which counted towards some of the marks for each of the two outcomes. In doing this, there is a risk of focusing on the more practical elements of the course without providing a context for the questions and therefore not allowing for the development of questions that require higherorder thinking in these tasks. The current study design has clarified what is considered to be appropriate ICT. Tasks can be partially completed using ICT with the theoretical component not counting in the ICT requirement and there were a number of good examples of this. However, some schools did not clearly distinguish between these two elements. There were a few examples of schools misunderstanding the ICT requirements in Unit 4. In some cases schools only used ICT in the assessment of Outcome 2 Task A, the budgeting task. However this is not sufficient. This task has a mandated 30 marks attached to it, however the task requires students to discuss the results and variances theory responses that cannot be counted in the ICT requirement. Therefore it is important that schools also include ICT somewhere else in the unit, ensuring that the overall total for the Unit is at least 30 marks out of the 100 marks for Unit 4. Most of the schools audited tended to use spreadsheets to meet the ICT requirement, requiring students to reconstruct accounts within the spreadsheets, complete journals or stock cards, post to ledger accounts and also prepare reports. These are all appropriate uses for ICT. It is important to note that there are other options for achieving the ICT requirement. The use of multimedia, for example, provides the opportunity for students to make a movie explaining how to complete some of the key accounting processes or perhaps justifying and discussing various elements of the accounting system. In Unit 4, in particular, where there has been a change to the key skills, there is a real opportunity to extend students and develop tasks that allow for a good spread of scores. However, many of the tasks collected this year only featured one question of this nature. There have been very few examples of questions which have required students to interpret graphic representations. This is not to say that these skills have not been covered in the teaching and learning, but rather that perhaps some schools have been reluctant to include them in formal assessments. Providing students with these types of questions as part of school-based assessment can only enhance their performance under exam conditions. The inclusion of new key knowledge, such as the reducing balance method of depreciation, tended to feature in the tasks audited, which was pleasing, however the debt ratio did not feature as highly. SPECIFIC INFORMATION Unit 3: Recording and reporting for a trading business School-assessed Coursework for the outcomes in Unit 3 will contribute 17 per cent to the student s study score of Accounting. At least 30 marks of the 100 marks available for School-assessed Coursework in Unit 3 must be allocated to ICT-based assessment. This outcome will contribute 50 marks out of the 100 marks allocated to School-assessed Coursework for Unit 3. It will be assessed by one or more tasks, which will contribute a total of 50 marks. Outcome 1 Record financial data for a single entry activity sole trader using a double entry system, and discuss the function of various aspects of this accounting system. 2

3 The student s performance on each outcome is assessed using one or more of the following: a folio of exercises (manual and ICT) a report (written, oral or multimedia). For this outcome there was a tendency for two types of assessment to be used. Firstly, the folio of exercises, usually comprising around three to five tasks. Across these tasks there are a range of topics covered from Outcome 1. It is important to note that when this option is used the folio must contain both manual and ICT-based tasks. As stated in the study design this is the one option where both methods must be employed. Often this folio was completed used test conditions. The other common method of assessment used was structured questions, which are, more often than not, completed under test conditions over two to three tasks. These tended to be completed predominantly manually. There was a tendency for folio tasks and structured questions to be used to break down this outcome into smaller parts and to reduce the possibility of consequential errors within tasks. The depth of theoretical knowledge required in the sampled schools was quite high; however, there were very few examples of the higher-order thinking skills in the new study design. For example, there were few instances of questions covering the key skill of discuss the function of the various aspects of the accounting system for a single activity trading business. This is a key skill that really offers the opportunity to examine a student s understanding of the more challenging areas of the course and, therefore, to ensure a spread of student results within a cohort. As it was not uncommon to see a higher than average reliance on practical questions in the assessment tasks submitted, this new key skill provides a great opportunity to adjust that balance, ensuring students are more familiar with the higher weighting of theory questions they often encounter in external assessments. There was no evidence of the use of report (written, oral or multimedia) during this year s review. Schools tended to mostly focus on the use of spreadsheets to meet the ICT requirement, opting to use them for students to demonstrate their ability to record financial data into stock cards, special journals and also both the general and subsidiary ledgers. These were then supported with theory questions that were not included in the mark calculation of the ICT requirement. Where spreadsheets were utilised, there tended to be a more effective use of ICT for this outcome. At some schools teachers required students to complete the theory components within the spreadsheet and counted these towards the ICT requirement, which is not in the spirit of the ICT guidelines. There were concerns about these schools meeting this requirement of the course. As mentioned in the general comments section there was evidence of schools opting to use commercial accounting packages to meet the ICT requirement of this outcome and in some cases completing one ICT task to cover both Outcome 1 and 2. In these situations there was often the need for students to set up the business records from scratch, then record the transactions and extract the reports, and marks were allocated to all three stages. The understanding of how to set up business files within a commercial package in not required knowledge in Unit 3 and the allocation of marks to this process, and also the printing of reports, which are automatically produced by the package, is not appropriate. If a school decides to use a commercial package, a better approach would be to give the students a preexisting business file to load and then assess the students on the transactions required. 3

4 More often than not, schools have tended to use their own marking schemes rather than the VCAA criteria provided in the VCE Accounting Handbook Where their own marking schemes were used, the mark allocations tended to be very similar to those used in the external examinations. Although these schemes vary from the scheme provided in the handbook, they are acceptable and relevant in a study such as this. Outcome 2 On completion of this unit students should be able to record balance day adjustments and prepare and interpret accounting reports. The student s performance on each outcome is assessed using one or more of the following: a folio of exercises (manual and ICT) a report (written, oral or multimedia). Tasks for this outcome tended to focus on the recoding of balance day adjustments suitable for Unit 3 and then the reporting of accounting information. It was more common to see schools using structured questions or a test to cover the outcome. There was less evidence of the use of ICT for the outcome in the schools sampled. Often students were required to record balance day adjustments into the general journal and, to a slightly lesser extent, into the general ledger accounts, then the preparation of the three accounting reports from a range of sources, including completed journals, trial balances (preadjusted with balance day adjustments and post adjusted) and other written information. It is also pleasing to see from time to time that students were required to prepare extracts from reports, rather than always entire reports. Some considerations when designing tasks for this outcome include the key skills of distinguishing between cash and profit and explaining the effect on the accounting equation, and also, as with Outcome 1, discussing the functions of the various aspects of the accounting system for a single activity trading business. Both of these skills provided opportunities for students to demonstrate evidence of higher-order thinking, and the inclusion of suitable questions in assessments will ensure a good spread of marks and assist students in preparing for external assessments. The use of ICT in the outcome could be increased through the use of spreadsheets for students to record balance day adjustments into the general journal and the general ledger, as well as closing entries, and then the preparation of reports or extracts of reports. This is an area where schools that are finding it difficult to meet the 30 marks out of 100 marks for ICT would be easily able to incorporate more towards ICT. As with Outcome 1, schools have tended to use, more often than not, their own marking schemes rather than the VCAA criteria provided in the Accounting assessment handbook. Where schools used their own marking schemes, the mark allocations tended to be very similar to those used in the external examinations. Although these schemes vary from the scheme provided in the handbook, they are acceptable and relevant in a study such as this. Unit 4 Control and analysis of business performance School-assessed Coursework for the outcomes in Unit 4 will contribute 17 per cent to the student s study score of Accounting. At least 30 marks of the 100 marks available for School-assessed Coursework in Unit 4 must be allocated to ICT-based assessment. 4

5 GENERAL COMMENTS Outcome 1 Record financial data using double entry accounting and report accounting information using an accrual-based system for a single activity sole trader, and discuss the function of various aspects of this accounting system. The student s performance on each outcome is assessed using one or more of the following: a folio of exercises (manual and/or ICT) a report (written, oral or multimedia) As already mentioned the use of ICT continued to be an issue in this outcome, especially given that some schools misunderstood the ICT requirement in Outcome 2 (budgeting) and did not include any other ICT assessment. The most common types of assessment tasks used in this outcome were tests, structured questions (usually completed under test conditions) or a folio of exercises. Most tasks audited were very appropriate and in some way covered the inclusion of the reducing balance method of depreciation. Most schools tended to include a discussion question in the assessment of this outcome, usually around depreciation or other balance day adjustments, which is pleasing. However, something that needs further consideration is the number of marks that schools attach to this style of question often as few as three or four marks. If we look to the sample papers and this year s exams, we can see a trend towards these questions being worth more marks, which should be considered in planning for Where schools did include some ICT in this outcome they tended to use spreadsheets for the recording of transactions in journals and ledgers, or for areas of the course such as the lower of cost and net realisable value (NRV). The use of graphical representations did not feature heavily in the schools audited and this is something that schools may wish to emphasise further because it provides greater scope to check for a deeper understanding of key concepts, and also provides a greater range of higher order opportunities for students to demonstrate a higher level of performance. As with Outcome 1, schools have tended to use their own marking schemes rather than the VCAA criteria provided in the VCE Accounting Handbook. Where their own marking schemes were used, the mark allocations tended to be very similar to those used in the external examinations. Although these schemes vary from the scheme provided in the handbook, they are acceptable and relevant in this study. Outcome 2 Prepare budgets and variance reports, evaluate the performance of a business using financial and non-financial information and discuss strategies to improve the profitability and liquidity of the business. This outcome will contribute 50 marks out of the 100 marks allocated to School-assessed Coursework for Unit 4. It will be assessed by two or more tasks, which will contribute a total of 50 marks. The study design mandates that students will use spreadsheets in their completion of Task A, involving the preparation of budgets and variance reports, and then discussing strategies for improvement for a total of 30 marks out of the 50 marks available. The other 20 marks relate to the evaluation of the performance of a business, and 5

6 strategies to improve profitability and liquidity, and can be assessed using a variety of methods. Task A Prepare budgets and variance reports for a business using spreadsheets. Evaluate the budgets and variance reports and discuss strategies for improvement. Good examples of tasks in this area tended to include spreadsheeets that required students to complete some budgeted reports or extracts, often involving the reconstruction of one or more ledger accounts and the completion of a variance report supported by appropriate theory questions. In many cases schools tended to allocate around 20 ICT marks to this task and 10 marks for the theoretical component. There was evidence in the audit process of schools that appeared to misunderstand the ICT requirement and used this task as their only ICT assessment in Unit 4. This was particularly disappointing as this is clearly explained in the study design and also in the online survey that schools are required to complete at the start of the audit process for Unit 4. Task B Evaluate the performance of a business using financial and non-financial information and discuss strategies to improve the profitability and liquidity of the business. The student s performance for Task B will be assessed using one or more of the following: a folio of exercises (manual and/or ICT) a report (written, oral or multimedia) Most schools tended to avoid the use of ICT in their assessments of this task. However some tasks required students to use spreadsheets to calculate some vertical and horizontal analysis and, in some cases, calculate ratios leading to the automatic graphing of results. Many schools tended to provide students with a case study and then require them to complete a series of structured questions under test conditions rather than write a written report for this part of the outcome. There was no evidence of the use of an oral or multimedia report from the schools audited. Most schools had ensured that they had used the appropriate financial indicators as described in the characteristics of the study, noting the change to net and gross profit margin, and, at times, the inclusion of the debt ratio. The fact that the ratios are no longer classified into the specific areas of profitability, liquidity, efficiency and stability, allowed a great flexibility in the responses that could be included in the marking guides schools provided, particularly for questions on liquidity. As with Outcome 1, schools have tended to use their own marking schemes rather than the VCAA criteria provided in the VCE Accounting Handbook. Where their own marking schemes were used, the mark allocations tended to be very similar to those used in the external examinations. Although these schemes vary from the scheme provided in the handbook, they are acceptable and relevant in this study. 6