Accounting 11 - Analysis

PRESCRIBED LEARNING OUTCOMES

It is expected that students will:

• describe the financial status of enterprises based on analyses of financial statements
• assess the current and projected financial strength of a business using financial statements

SUGGESTED INSTRUCTIONAL STRATEGIES

• Have students use sample accounts to assess and describe the status of a business's accounts receivable and accounts payable ledgers. Ask them to explain how these accounts affect the daily operation and overall financial condition of the business.
• Provide students in groups with detailed financial statements for an organization and ask them to assess its financial strengths and weaknesses. Have each group prepare a written report to the organization's managers describing its conclusions and proposing any improvements.
• Ask students to analyse the published financial reports of a BC company to assess its financial position and prospects for the future. In a class discussion, invite students to make and defend recommendations on whether or not to buy the business at a given price or to lend it money.
• Form student teams and give them sets of company financial statements, then ask them to decide whether to buy shares in the business. Afterward, lead a class discussion on whether the financial statements provided the teams with the information they needed to prepare their arguments.

SUGGESTED ASSESSMENT STRATEGIES

• Confer with students as they review a business's financial statements. Note evidence that they:
  • identify and discuss elements that indicate whether the business is healthy
  • identify strengths and weaknesses of the business
  • suggest things the business could do to improve its financial position
  • recognize the benefits and costs of investing in or lending money to this business
• As students examine the accounts receivable for a business, ask questions such as:
  • Does this business extend too much credit to customers?
  • What is the effect of delinquent accounts?
  • How does the business adjust to accommodate customer credit?
  • How should delinquent accounts be handled?
  Ask students to relate terms of sale to number of days required to collect the accounts receivable. Assess students' conclusions based on criteria such as:
  • provides specific data to support the answer
  • describes overriding issues related to accounts receivable
• As students examine the accounts payable for a business, ask questions such as:
  • How does this business use credit?
  • How important is it to keep the accounts payable current?
  • What problems would the business face if the accounts payable were continually in arrears?
  In their responses, note evidence that students:
  • identify the relationship between the accounts payable and the company's cash flow
  • compare the company's accounts payable levels to historic data and industry statistics
  • justify their financial evaluations using ratio analyses

• Accounting 1, Fifth Edition
• Principles of Accounting, Second Edition

• Designing an Accounting System using ACCPAC Simply Accounting

Previous Page Next Page

  BC Ministry of Education Home Page