Ontario Grade 11 BAI3E Accounting Essentials (Grade 11, Workplace Preparation)
Chapters: 4
1. Ethics and Current Issues
1 Ethics and Current Issues · 2 Impact of Technology · 3 Careers in Accounting
- Ethics in Accounting – Banks, investors, workers and governments make decisions using accounting numbers, so the numbers must be honest. Accountants face pressure to bend them. A code of ethics guides them with five principles: integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. Strict standards and new issues such as AI, cyber security and climate reporting keep changing the accountant's role.
- Computerised Accounting System (CAS): Features, Parts and Software Types – A computerised accounting system (CAS) records business deals on a computer. You enter a voucher once and the software posts it, totals it and prints ledgers and statements. A CAS has six parts: hardware, software, people, procedure, data and connectivity. Accounting software may be ready-made, customised or tailored.
- Careers in Accounting – Accounting offers jobs at every level, from bookkeeper to chief financial officer, in firms, industry, government and not-for-profits. Professional accountants study for a degree, pass a professional body's exams and complete supervised experience to earn a designation such as CPA, CA, ACCA or CMA. Professional bodies set exams, enforce a code of ethics and require lifelong learning.
2. Fundamentals of Accounting for Business
1 The Nature of Accounting · 2 Types of Business Ownership · 3 Sources of Financing
- Introduction to Accounting – Accounting is the language of business. It identifies money events, records them, classifies and summarises them, and then gives the results to the people who need them — owners, managers, banks, investors and the government.
- Sole Proprietorship, Partnership and Hindu Undivided Family Business – A sole proprietorship is owned and run by one person who takes all profit and bears unlimited liability. A partnership is run by two or more people who share profit under an agreement; its partners are of many kinds and a written deed and registration protect them. A Hindu Undivided Family business is run by the eldest member, the karta, for all family members, who become members by birth.
- Sources of Business Finance – Every business needs money for long-term assets (fixed capital) and daily running (working capital). This money comes from two big pools: owners' funds (equity shares, preference shares, retained earnings) that need not be paid back, and borrowed funds (debentures, bonds, bank and institution loans, public deposits, trade credit, inter-corporate deposits) that must be repaid with interest.
3. The Accounting Cycle
1 The Accounts for a Service Business · 2 The Accounting Cycle for a Service Business · 3 Sales Taxes for a Service Business
- Vouchers, Accounting Equation and Rules of Debit and Credit – Every transaction starts with a source document (bill, receipt, cash memo). From it a voucher is prepared, showing which account to debit and which to credit. Every transaction affects at least two accounts so that Assets = Liabilities + Capital always holds. Assets and expenses increase on the debit side; liabilities, capital and revenues increase on the credit side.
- Ledger: Format, Posting and Balancing – The ledger is the main book of accounts where all entries about one item (cash, a customer, rent) are collected in one account. Posting means copying each journal or subsidiary-book entry into the right accounts. Balancing finds the difference between the two sides at the end of a period.
- Accounting for Sales Tax – Sales tax is money a business collects from customers for the government. It is not income: it goes into a liability account, Sales Tax Payable. With a value-added tax (GST, VAT, HST) the business also gets back the tax it paid on its own purchases (input tax credit), so it remits only the difference. With a single-stage retail sales tax (like a provincial or state sales tax) it simply passes on all the tax it collected.
4. Internal Control
1 Internal Control · 2 Banking and Cash Management · 3 Computerized Accounting
- Internal Control in Accounting – Internal control is the set of rules and checks a business uses to protect its assets, keep records accurate and make people follow policy. Key elements: separate duties, approve transactions, lock up assets, use numbered documents, check records against reality (cash counts, bank reconciliations), and use budgets and independent audits.
- Bank Reconciliation Statement – The bank column of the cash book (kept by the firm) and the pass book (kept by the bank) should show the same balance, but they often differ because of timing, items known first to the bank, and errors. A bank reconciliation statement (BRS) starts with one balance and adds or subtracts each cause to reach the other.
- Computerised Accounting System (CAS): Features, Parts and Software Types – A computerised accounting system (CAS) records business deals on a computer. You enter a voucher once and the software posts it, totals it and prints ledgers and statements. A CAS has six parts: hardware, software, people, procedure, data and connectivity. Accounting software may be ready-made, customised or tailored.