Cambridge IGCSE and O Level Accounting

1.1 Introducing accounting

Syllabus reference: 1.2
Learning aims: 1 understand the meaning of the terms assets and liabilities
2 understand the meaning of the term capital
3 understand the accounting equation
4 prepare an elementary statement of financial positon
Prior knowledge: Nil
Resources: Coursebook Chapter 1
Workbook Part 2 Section 1 Multiple choice questions 1–2
Workbook Part 2 Section 1 Structured questions 2–4
Worksheet 1.1
You will also need:
Flashcards on assets and liabilities
PowerPoint, slide or handout with exercises on the accounting equation
PowerPoint, slide or handout with exercises on the preparation of
elementary statement of financial position

Suggested activities
1
1 Share the learning aims and outcomes with the students and write on the board or use a
pre-prepared slide or PowerPoint
2 Explain to the class the meaning of the terms assets and liabilities
Write definitions on a board, flip chart, slide, etc.
3 Practical exercise as follow–up
Students working in pairs or small groups make lists of the assets and liabilities that:
a they or their parents have
b the school/college has
c a business may have.
4 Explain to the class the meaning of the terms inventory, trade receivables and trade
payables
Write definitions on a board, flip chart, slide, etc.
5 Use of flashcards on assets and liabilities
Hold up cards containing the name of an asset or a liability and ask the class to state whether it
is an asset or a liability. Alternatively, this can be done by students working in pairs.
6 Teacher-led discussion on capital
Discuss with class the nature of capital and why it is required.
This leads on to a discussion about the accounting equation.
Write the formula on a board, flip chart, slide, etc.
Encourage the class to suggest two other ways to express the formula.
7 Practical exercise as follow-up
Students work individually or in pairs to complete exercises on the accounting equation.

© Cambridge University Press 2018

Cambridge IGCSE and O Level Accounting

8 Preparation of a simple statement of financial position

Build up a statement of financial position on the board using a list of assets and liabilities.
This can be two-sided or vertical and does not require assets and liabilities to be classified.
9 Follow-up in next lesson
Prepare an elementary statement of financial position, including effect of transactions.
Tasks for more confident students could include:
1 Considering the effects of more complex transactions on the statement of financial position.
2 Considering how the assets and liabilities could be grouped into different types.
3 Considering ways in which a business could raise funds for expansion.
10 Homework (or class work at the start of next lesson)
Worksheet 1.1

© Cambridge University Press 2018