Level 1, 2002
Accounting: Describe a method of processing financial
information and analyse transactions (90023)
National Statistics
Assessment Report
Assessment Schedule
© New Zealand Qualifications Authority, 2002
All rights reserved. No part of this publication may be reproduced by any means without
prior permission of the New Zealand Qualifications Authority.
NCEA Level 1 Accounting (90023) æ 2
Accounting: Describe a method of processing financial information and analyse transactions
(90023)
National Statistics
Percentage achieved
Number of
Results
Not Achieved
Achieved
Merit
Excellence
8360
53%
19%
13%
16%
Assessment Report
General Comments
Candidates who had prepared well for the examination had no difficulty in gaining Achieved, Merit or
Excellence. However, candidates need to read questions carefully and answer in context when required.
Some are using dated terminology, which was particularly evident in the journal entries. Current
textbooks were published prior to the NZCETA curriculum and achievement standards, and students
need to be aware of this.
Comments on Specific Questions
The assessment specifications indicated that this achievement standard would have three questions: an
equation task, a task involving journal entries for balance day adjustments and a task comparing manual
and computer systems. A significant number of candidates who could demonstrate excellence in the
equation and systems tasks left the journal entry question blank or tried to convert it to a general ledger
account.
Question One: The Effects of Transactions on the Accounting Equation
The accounting equation provided a straightforward introduction to assessment of this achievement
standard. Students should be familiar with the various accounting equation formats and understand the
effect of expenses and revenues on owner’s equity. Clear instructions were given to use plus (+) and
minus (–) signs and totals were not required. A number of candidates wrote in expense and revenue
columns. A few candidates did not follow the instructions and no credit could be given where their
intention was not clear.
Question Two: Preparing General Journal Entries
This question was done either poorly or well. It was evident that many candidates were unfamiliar with
general journal entries for balance day adjustments. It is important that the correct terminology is used
for the current assets and current liabilities created on balance day. These accounts are identified in the
explanatory notes to the achievement standard. Some candidates used ‘provision for depreciation’
instead of ‘accumulated depreciation’. If the entry did not have a debit account named with an amount
and a corresponding credit account named with an amount, then it was not considered to be a general
journal entry. Some candidates used the word ‘balance’ as a stem or put an account heading at the top of
the entry; these did not represent a general journal entry.
Other common errors include:
• incorrect calculation of GST on accounts receivable, accounts payable and the vehicle purchased
• the inclusion of GST on the prepayments and accrued revenue
NCEA Level 1 Accounting (90023) æ 3
• using accounts receivable and accounts payable instead of accrued revenue and accrued expenses
for the interest and wages owing
• recording the vehicle purchased as purchases or machinery
• using term deposit as the stem instead of interest on term deposit
• not having machinery in each of the depreciation stems
• using accrued revenue instead of accounts receivable for the sales receipts owing on balance day
• confusing interest with an expense
• treating rent as revenue instead of an expense.
Question Three: Comparison of Accounting Systems
This was well done by the majority of candidates. A large number did not know the input process and
output stages in a manual accounting system, in particular that transactions are written onto source
documents before being entered into the journals. While a broad range of answers was accepted, the
number of candidates who wrote that using a computer was ‘easier’ or ‘better’ was disappointing.
NCEA Level 1 Accounting (90023) æ 4
Assessment Schedule
Accounting: Describe a method of processing financial information and analyse transactions
(90023)
Evidence Statement
QUESTION ONE
Day
Bank
Accounts
Receivable
Furniture
& Fittings
Machinery
10 000
14 000
Accounts
Payable
Owner’s
Equity
5 000
3 000
1
+200
–200
2
–400
–400
S
3
+10 000
+10 000
S
+120
S
4
5 000
25 000
S
+120
5
+600
6
–1 700
7
–200
8
9
2 000
Loan
S
–1 000
–220
+1 000
+100
+600
–700
–360
–700
C
+20
C
+300
C
–260
C
QUESTION TWO
(a)
Wages
5004
Accrued Expenses/Expenses Accrued
(b)
Accrued Revenue/Accrued Income
Prepaid Expenses/Prepayments
Accounts Receivable
Sales
GST
1004
S
8004
S
8004
Rent
(d)
S
1004
Interest (received)/(on Term Investment)
(c)
5004
36004
3 2004
4004
C
NCEA Level 1 Accounting (90023) æ 5
(e)
Motor Vehicle
7 2004
GST
9004
Browns Car Sales
(f)
Depreciation on Machinery
8 1004
C
1 2004
C/S
1 2004
Accumulated Depreciation on Machinery
QUESTION THREE
COMPUTER SYSTEM
MANUAL SYSTEM
INPUT
INPUT
Transactions can be entered directly into the
Transactions are first handwritten onto (source)
accounting system using a keyboard or a scanner.
documents.
(Accept receipt book, cheque butt, invoice.)
PROCESS
PROCESS
Processing is faster/automatic/more accurate using
Journal columns are totalled and posted/
a computer system because when each transaction
transferred/recorded/entered to ledger accounts.
is entered, ledger accounts and financial
Closing balances from ledger accounts are used to
statements are automatically/more quickly
prepare a Trial Balance.
updated.
OUTPUT
OUTPUT
Financial statements can be produced at any time
Financial statements are prepared manually and
by using a printer/printout or can be viewed on
are usually only prepared at the end of the
the (computer) screen/VDU/monitor.
(financial) year.
NCEA Level 1 Accounting (90023) æ 6
Judgement Statement
Judgement statements (formerly referred to as sufficiency statements) help students understand how their
overall results for each standard were arrived at.
Achievement
Achievement with Merit
Achievement with Excellence
Describe an accounting system.
Describe, compare and contrast
accounting systems in terms of any two
of inputs, processes, storage and outputs
Describe, compare and contrast
accounting systems in terms of inputs,
processes, storage and outputs.
Question Three
Question Three
6 correct answers
7 correct answers
Describe or analyse straightforward
transactions correctly
Describe or analyse complex
transactions correctly
Describe and analyse straightforward
and complex transactions correctly
Question One
3 S or C transactions recorded
correctly
Question One
3 C transactions recorded correctly
or
2 C transactions
plus
4 S transactions recorded correctly
Question One
3 C transactions
plus
4 other S or C transactions recorded
correctly
Prepare general journal entries for
straightforward
balance-day adjustments
Prepare general journal entries for
complex balance-day adjustments
Prepare general journal entries for all or
nearly all balance-day adjustments
Question Two
2 S or C
or
6 ticks, which include one S or C
Question Two
2C
or
8 ticks, which include one C
Question Two
5 S and C
or
Any 12 ticks
Question Three
4 correct answers