Acbp5122 Mo

IIE Learn Module Outline ACBP5122
Accounting 1B
ACBP5122/d/w
MODULE OUTLINE 2023
(First Edition: 2012)
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© The Independent Institute of Education (Pty) Ltd 2023 Page 1 of 32

Table of Contents
Introduction ............................................................................................................................... 3
Using this Module Outline .......................................................................................................... 4
This Module on Learn ................................................................................................................. 5
Icons Used in this Document and on Learn ................................................................................ 6
Module Resources ...................................................................................................................... 7
Module Purpose ......................................................................................................................... 8
Module Outcomes ...................................................................................................................... 8
Assessments: ACBP5122/d ......................................................................................................... 9
Assessments: ACBP5122w........................................................................................................ 11
Module Pacer ........................................................................................................................... 13
Glossary of Key Terms for this Module .................................................................................... 27

Introduction
This module assumes a basic knowledge of bookkeeping and accounting. It is assumed that
students already know how to record basic transactions in journals and ledgers and how to
complete the monthly cycle (excluding reconciliations) up to trial balance.
This module commences with interim accounting concepts involving reconciliations. This is the
one (1) link in the monthly bookkeeping cycle that was not covered in Accounting 1A.
In Learning Unit 3, students are made familiar with the ad hoc accounting procedures involving
asset disposal. But firstly, they need to become competent in the depreciation adjustment. It is
always recommended to work within a timeline when doing calculations involving depreciation.
Once the depreciation principles have been embedded, you can move on to the four steps of
asset disposal. Initially, the date of the sale is bound to be the first or last day of the financial
year, as this makes the procedure slightly easier. Of course, the harder questions involve the sale
of a depreciable asset during the financial year.
Learning Unit 4 deals with the rest of the common year-end adjustments for a sole trader. These
adjustments include stock losses (to be debited to cost of sales), consumable stores on hand,
the four accruals, as well as allowances for credit. Focus on the structures of the financial
statements with particular focus on the notes.
Learning Units 5 and 6 follow on from the concepts dealt with in Learning Unit 4. In this Learning
Unit, however, we focus on the financial statements of partnerships and close corporations. A
central theme in these Learning Units is the addition of a third, final account – the appropriation
account. The “starting point” in lecturing the books of a partnership or close corporation is the
“profit-and-loss” figure, which, in essence is the same figure – irrespective of which type of entity
we are dealing with.
Our final Learning Unit deals with a sundry topic – incomplete records. Bookkeeping firms are
often in existence simply because of the existence of books that are in disarray. Business owners
contract bookkeepers to sort out their financial affairs so that they can get into the clear with
the authorities such as SARS.

Using this Module Outline

This module outline has been developed to support your learning. Please note that the
content of this module is on Learn as well as in the prescribed material. You will not succeed
in this module if you focus on this document alone.
• This document does not reflect all the content on Learn, the links to different resources,
nor the specific instructions for the group and individual activities.
• Your lecturer will decide when activities are available/open for submission and when these
submissions or contributions are due. Ensure that you take note of announcements made
during lectures and/or posted within Learn in this regard.

This Module on Learn

Learn is an online space, designed to support and maximise your learning in an active manner.
Its main purpose is to guide and pace you through the module. In addition to the information
provided in this document, you will find the following when you access Learn:
• A list of prescribed material;

• A variety of additional online resources (articles, videos, audio, interactive graphics, etc.)
in each learning unit that will further help to explain theoretical concepts;
• Critical questions to guide you through the module’s objectives;
• Collaborative and individual activities (all of which are gradable) with time-on-task
estimates to assist you in managing your time around these;
• Revision questions, or references to revision questions, after each learning unit.
Kindly note:
• Unless you are completing this as a distance module, Learn does not replace your
contact time with your lecturers and/or tutors.
• ACBP5122 is a Learn module, and as such, you are required to engage extensively
with the content on the Learn platform. Effective use of this tool will provide you
with opportunities to discuss, debate, and consolidate your understanding of the
content presented in this module.
• You are expected to work through the learning units on Learn in your own time –
especially before class. Any contact sessions will therefore be used to raise and
address any questions or interesting points with your lecturer, and not to cover every
aspect of this module.
• Your lecturer will communicate submission dates for specific activities in class and/or
on Learn.

Icons Used in this Document and on Learn

The following icons are used in all your modules on Learn:
Icon Description
A list of what you should be able to do after working through the learning unit.
Specific references to sections in the prescribed work.
Questions to help you recognise or think about theoretical concepts to be

covered.
Sections where you get to grapple with the content/theory. This is mainly
presented in the form of questions which focus your attention and are aimed at
helping you to understand the content better. You will be presented with online
resources to work through (in addition to the textbook or manual references) and
find some of the answers to the questions posed.
Opportunities to make connections between different chunks of theory in the

module or to real life.
Real life or world of work information or examples of application of theory, using

online resources for self-exploration.
REMEMBER:
You need to log onto Learn to:

• Access online resources such as articles, interactive graphics, explanations, video clips, etc. which
will assist you in mastering the content; and
• View instructions and submit or post your contributions to individual or group activities which are
managed and tracked on Learn.

Module Resources
Prescribed Material (PM) for Maritz, C.J. and Hibling, A.H. Accounting 1B Textbook. Cape
this Module Town, EDGE Learning Media. (2023)
Maritz, C.J. and Hibling, A.H. Accounting 1B Workbook. Cape

Town: EDGE Learning Media.
Recommended Readings, Please note that a number of additional resources and links
Digital, and Web Resources to resources are provided throughout this module on the
Learn platform. You are encouraged to engage with these as
they will assist you in mastering the various objectives of
this module. They may also be useful resources for
completing any assignments. You will not, however, be
assessed under examination conditions on any additional or
recommended reading material.
Module Overview You will find an overview of this module on Learn under the
Module Information link in the Course Menu.
Assessments Find more information on this module’s assessments in this
document and on the Student Portal.

Module Purpose
Accounting 1B is included in the degree programme to provide students with a foundational
understanding of the international language of business, known as Accounting.
Thus, the purpose of this module is to provide students with basic knowledge and
understanding of the foundational concepts and principles relating to the preparation and
interpretation of accounting records up to financial statements, including the reconciliations,
ledgers, year-end procedures for sole traders and partnerships, and incomplete records.
Students are required to prepare financial records in accordance with International Financial
Reporting Standards.
Module Outcomes
Demonstrate an understanding of Financial Reporting of various business
MO1
structures.
MO2 Accurately prepare the Annual Financial statements of a business entity.
Demonstrate an understanding of the statutory requirements in preparing the
MO3
Annual Financial statements.

Assessments: ACBP5122/d
Integrated Curriculum Engagement (ICE)
Minimum number of ICE activities to complete 4
Weighting towards the final module mark 10%
Assignment/Tests/ Assignment Test Examination

Examination
Weighting 25% 30% 35%
Duration 10 hours 1 hour 3 hours
Total marks 100 60 180
Open/ closed book Open book Closed book Closed book
Resources required Prescribed
textbook
Learning Units covered LU1-2 LU3-4 All learning units

Assessment Preparation Guidelines

Format of the Assessment Preparation Hints
(The Focus/ Approach/ Objectives) (How to Prepare, Resources to Use,
etc.)
Tests and The tests and exam will comprise of To prepare effectively for the
Examination theory and application of theory assessments you can include the
(practical) questions involving following in your preparation:
calculations.
Ensure that you work through all
Theory-based questions will consist the examples, questions and
of a variety of formats, such as revision questions in your textbook.
Match-the-Column questions,
multiple choice questions, short Revision exercises in the workbook.
questions, and/ or paragraph
questions. However, the majority Check if you are confident that you
of questions will test the could answer questions relating to
application of theory and will be all the Learning Objectives for the
practical questions with Learning Units tested.
calculations.
Work through Mock Assessments or
previous assessments.

Assessments: ACBP5122w
Integrated Curriculum Engagement (ICE)
Minimum number of ICE activities to complete 4
Weighting towards the final module mark 10%
Assignments/ Projects Assignment 1 Assignment 2

Weighting 25% 30%
Duration 10 hours 10 hours
Submit after LU2 LU4
Learning Units covered LU1-2 LU3-4
Resources required Prescribed Prescribed
textbook textbook
Examination Examination
Weighting 35%
Duration 3 hours
Total marks 180
Open/ closed book Closed book
Resources required
Learning Units covered All learning units

Assessment Preparation Guidelines

Format of the Assessment Preparation Hints
(The Focus/ Approach/ Objectives) (How to Prepare, Resources to Use,
etc.)
Examination The exam will comprise of theory To prepare effectively for the
and application of theory (practical) assessments you can include the
questions involving calculations. following in your preparation:
Theory-based questions will consist
of a variety of formats, such as Ensure that you work through all
Match-the-Column questions, the examples, questions and
multiple choice questions, short revision questions in your textbook.
questions, and/ or paragraph
questions. However, the majority Revision exercises in the workbook.
of questions will test the
application of theory and will be Check if you are confident that you
practical questions with could answer questions relating to
calculations. all the Learning Objectives for the
Learning Units tested.
Work through Mock Assessments or

previous assessments.

Module Pacer
Code Programme Contact Sessions Credits
ACBP5122 BAD1; BBM1; BBR1; BCIL1; BCO1; BDK1; 60 contact
BET1; BIL1; BLG1; BML1
15
ACBP5122d BAD1d; BBM1d; BLG1d 36 contact + 12 learn
ACBP5122w BAD1w; BBM1w; BCO1w; BET1w; BLG1w 12
Learning Unit 1 Bank Reconciliation
Overview:
A bank is a business like any other. It is primarily a service enterprise offering banking
facilities to other businesses and individuals. The bank account used by a business, is called
the current account. It is designed to give the account holder the highest possible degree of
flexibility for managing their cash flow.
In this learning unit, we will look at the reconciliation of the business’s cashbook with the
bank’s records.
Please work through Themes 1 and 2 on Learn, together with the relevant sections of your
prescribed source/s. To ensure that you are working towards mastering the objectives for
this learning unit, please also ensure that you complete all the activities on Learn.
To ensure that you achieve the best results in this module it is important that you don’t fall
behind as one learning outcome and theme build on the next. And secondly you must
complete as many exercises as possible. Thirdly you must ensure that under assessment
conditions you can maintain a work speed of 1 mark per minute.

Learning Unit 1: Theme Breakdown

Sessions: Theme 1: The business and the bank Prescribed Material (PM)
ACBP5122 1-10
ACBP5122d 1-6
ACBP5122w LO1: Explain the purpose of the bank LU 1
Academic reconciliation.
Weeks:
1-2
Related
Outcomes: Theme 2: Bank reconciliation LU 1
MO001 LO2: Prepare a bank reconciliation
statement.

Learning Unit 2 Debtors and Creditors Reconciliation
Overview:
When transacting with a customer that has an account with a business, the bookkeeper
needs to update the customer’s account in real time – i.e. accurate records must be kept of
every transaction pertaining to the customer so that the total amount owing is readily
identifiable. It is necessary to compile a detailed account of each individual debtor and
creditor so that the outstanding amounts on these accounts are readily available. These
collections of accounts summarising the transactions pertaining to all individual debtors and
creditors are called the debtors and creditors ledgers respectively. Collectively they are
known as the subsidiary ledgers.
This learning unit is aimed at explaining how individual debtors and creditors accounts are
reconciled with their respective control accounts in the general ledger.
this learning unit, please complete all the activities on Learn.


Sessions: Theme 1: The control account system Prescribed Material (PM)
ACBP5122 11-20
ACBP5122d 7-12
ACBP5122w LO1: Record financial transactions in a LU 2
Academic Week: Debtors Ledger and a Creditors
3-4 Ledger;
LO2: Prepare a Debtors control account and
a Creditors control account.
Related Theme 2: Debtors and creditors LU 2
Outcomes: reconciliation
MO001 LO3: Make the necessary adjustments and
corrections in the accounting records
concerning Debtors and Creditors in
particular;
LO4: Prepare a debtors and a creditors
reconciliation.
25 % of ICE tasks to be completed by this point

Learning Unit 3 Depreciable assets
Overview:
Non-current assets are resources controlled by the entity for longer than one year, as a
result of past events from which future economic benefits are expected or likely to flow into
the entity. Almost all non-current assets fluctuate in value over their lifespan. Whereas some
of the assets might appreciate in value (like real estate), many lose their value over time. We
call this loss in value depreciation.
The term ‘depreciation’ is the most prominent concept in this learning module. We will
explore the bookkeeping and accounting treatment of depreciable assets, with special
reference to the disposal of these assets and the calculation of resultant profits/losses on
such disposals.
Please work through Themes 1 to 3 on Learn, together with the relevant sections of your
this learning unit, please complete the all the activities on Learn.

Learning Unit 3: Depreciable assets

Sessions: Theme 1: What is depreciation Prescribed Material (PM)
ACBP5122 21-30
ACBP5122d 13-
18
ACBP5122w LO1: Apply the different methods of LU 3
Academic depreciation.
Weeks:
5-6
Related Theme 2: Calculating depreciation LU 3
Outcomes: LO2: Apply the different methods of
MO001 depreciation;
MO002 LO3: Make the necessary accounting entries
MO003 for depreciation;
LO4: Record entries concerning
depreciation in the General Ledger and
General Journal.
Theme 3: The asset register and asset LU 3
disposal
LO5: Explain the purpose of an asset
register;
LO5: Apply the four steps of asset disposal;
LO6: Record entries concerning asset
disposal in the General Ledger and
General Journal;
LO7: Prepare the note to the financial
statement relating to property, plant
and equipment.

Learning Unit 4 Financial statements of a sole trader
Overview:
The sole trader (also known as the sole proprietorship) is the oldest form of ownership. It
suits the small business which one person can manage efficiently – a butchery, florist,
plumber, electrician, spaza shop, the corner café, etc.
The sole trader does not have legal personality - the assets of the business belong to the
owner and the owner is personally responsible for the liabilities. In addition, all profits
generated by the business belong to the owner.
In this learning unit, we will look at the financial statements of the sole trader.
Please work through Themes 1 to 3 on Learn, together with the relevant sections of your
complete as many exercises as possible. Thirdly, you must ensure that under assessment


Sessions: Theme 1: Year-end adjustments and Prescribed Material (PM)
ACBP5122 31-44 accruals
ACBP5122d 19-
25
ACBP5122w LO1: Complete year-end adjustments LU 4
Academic (including depreciation);
Weeks: LO2: Prepare the post-adjustment trial
7-8 balance.
Related Theme 2: Allowance for credit losses LU 4
Outcomes: LO3: Complete year-end adjustments
MO001 (including depreciation).
MO002 Theme 3: Financial statements and LU 4
MO003 inventory systems
LO4: Prepare a statement of financial
position;
LO5: Prepare a statement of profit or loss
and other comprehensive income
according to both inventory methods;
LO6: Prepare a statement of changes in
equity;
LO7: Prepare all relevant notes to the
financial statements.
75% of ICE tasks to be completed by this point

Learning Unit 5 Partnerships
Overview:
We have all heard the saying ‘two heads are better than one’. In business, this phrase is
particularly appropriate. In a sole proprietorship, the proverbial ‘me against the whole world’
slogan often becomes a stark reality. Sometimes business owners prefer not to take the risk
of the business alone. They could then opt for a different vehicle, for example a partnership
or a company. The normal day-to-day recording of transactions for all these entities is
performed in the usual fashion. The main difference when compared with the sole
proprietorship is the structuring of the proprietary accounts and subsequently, the equity
section in the statement of financial position. As you will see, these alternative business
forms lend themselves to additional equity accounts as well as custom made year-end
procedures that usually involve an additional final account, called the appropriation account.
In this learning unit, we will look at business partnerships.
Please work through Theme 1 on Learn, together with the relevant sections of your
this learning unit, please complete the activity on Learn.


Sessions: Theme 1: Business partnerships Prescribed Material (PM)
ACBP5122 45-50
ACBP5122d 26-
29
ACBP5122w LO1: Record the contributions of partners; LU 5
Academic Week: LO2: Calculate and record the distribution
9 of profits of the partnership
Related according to the agreement
Outcomes: between partners;
MO001 LO3: Calculate and record final profit
MO002 share for partners;
MO003 LO4: Prepare relevant financial
transactions in the capital and
current accounts for a partnership;
LO5: Prepare the statement of profit or
loss and other comprehensive
income for a partnership;
LO6: Prepare the statement of changes in
equity for a partnership;
LO7: Prepare the statement of financial
position for a partnership.
100% of ICE tasks to be completed by this point

Learning Unit 6 Close Corporations
Overview:
A corporate entity (or a corporation) is a business that meets certain legal requirements to
be recognised as having a separate and distinct existence. Most corporations are created
with the objective of conducting business, generating profits for its owners.
A corporation is governed by statutes that define its rights and obligations which are unique
to its legal identity. As of 1 May 2011, no new Close Corporations (CCs) may be registered in
South Africa – this will be replaced by Private Companies under the new Companies Act.
Existing CC’s will continue to exist indefinitely, but may be forced to convert to a company if
the Close Corporations Act is repealed. In addition, existing companies are not permitted to
convert to a CC.
In this learning unit, we will look at close corporations and companies.


Sessions: Theme 1: What is a CC? Prescribed Material (PM)
ACBP5122 51-55
ACBP5122d 30-
32
ACBP5122w LO1: Explain the key characteristics of LU 6
Academic Week: close corporations;
10 LO2: Explain the advantages and
disadvantages of a close
corporation;
LO3: Explain the accounting and reporting
requirements for a close
corporation.
Related Theme 2: Accounting components of CCs LU 6
Outcomes: LO4: Record the entries needed for the
MO001 set-up of a close corporation;
MO002 LO5: Prepare the financial transactions
MO003 required for a change in close
corporation due to a change in
membership;
LO6: Prepare the appropriation account;
LO7: Prepare the statement of profit or
loss and other comprehensive
income;
LO8: Prepare the statement of financial
position for a close corporation;
LO9: Prepare the statement of changes in
net investment for a close
corporation; and
LO10: Prepare the notes to the financial
statements for a close corporation.

Learning Unit 7 Incomplete Accounting Records and Revision
Overview:
One reality of the modern world is that accounting records are not always in good shape.
The bookkeeper or accountant often ‘inherits’ a set of books that are in complete disarray;
and is then required to put the pieces together to come up with a set of books which
stakeholders (including SARS) will not frown upon.
In this learning unit, we will look at the steps one should follow to complete unfinished
records in order to come up with a meaningful set of financial statements.
conditions you can maintain a work speed of one mark per minute.


Sessions: Theme 1: The informal sector in South Prescribed Material (PM)
ACBP5122 56-60 Africa
ACBP5122d 33-
36
ACBP5122w LO1: Report on recordkeeping in the LU 7
Academic informal sector.
Weeks:
11-12
Related Theme 2: Bookkeeping systems LU 7
Outcomes: LO2: Prepare financial statements from
MO001 incomplete records.
MO002
MO003

Glossary of Key Terms for this Module

Term Definition
Accounting cycle The accounting cycle commences with a transaction that needs to be
analysed in journals. Journals are then summarised and posted to the
ledger, and thereafter a trial balance is drawn up. These three steps
are repeated for every subsequent month in the financial year – until
the final month. In the final month of the financial year (usually
month 12), the trial balance is followed by year-end adjustments, a
post-adjustment trial balance, a post-closing trial balance and the
preparation of financial statements.
Accounting equation This is an equation on which the main framework of accounting is
based. It is a mathematical equation that must always balance.
(A = OE + L)
Accumulated A negative asset account that holds the accumulated pool of
depreciation account depreciation that has been written-off on a specific asset or group of
assets since they were acquired.
Appropriation Final account against which year-end appropriation to and from
account equity participants are closed-off, to determine the retained profit
which forms part of the equity section of the statement of financial
position.
Assets Resources controlled by the firm, as a result of past events, and from
which future economic benefits are likely to flow to the business.
Asset disposal A realisation account (i.e. a temporary account used to calculate the
account profit from an ad-hoc transaction) used to calculate the profit or loss
with the disposal of a depreciable asset. Disposals can be in the form
of a sale, trade-in or scrapping of a depreciable asset. The asset
disposal account is created, and immediately closed off against the
resulting profit/ loss with disposal of asset account. This account, in
turn, is only closed off against profit and loss at year-end.
Asset register Shows all the important details pertaining to a particular asset, from
the date of purchase to the date of sale.
Balance sheet A financial statement that reflects the accounting equation (the
financial position of the business). The modern term used for the
balance sheet is the “Statement of financial position”.
Balancing The month-end process of totalling the accounts.
Bank statement Statement drawn up by the bank that shows all the transactions
affecting the business’ bank account.
Bank reconciliation A statement drawn up by the business to remind them of debits and
statement credits that still need to be passed in the bank account by the bank.

Term Definition
Business ethics The question of how managers decide what is right or wrong in
conducting the business of their organisation and how they aim to
achieve the “right” and to “avoid the wrong”.
Capital account Account used when the owner makes contributions of cash or other
assets to the business.
Carrying value The book value or depreciated value of a non-current asset.
Cashbook receipts The journal in which transactions that increase the balance of the
current bank account are recorded. Also known as the cash receipts
journal.
Cash receipts Any transaction that causes an increase in the bank account balance.
transaction
Cashbook payments The journal in which transactions that decrease the balance of the
current bank account are recorded. Also known as the cash
payments journal.
Cash payments Any transaction that causes a decrease in the bank account balance.
transaction
Close corporation A business registered in terms of the Close Corporations Act of 1984,
consisting of not more than 10 members who share its ownership
and management.
Contra-account The opposite account that is debited or credited as the opposite
double entry.
Credit column The credit column in a debtor’s individual account is used to enter
the amount of the transaction in cases where the particular
transaction decreases the amount owing to our business by the
debtor. The converse applies for a creditor’s individual account
Credit invoice A document that indicates that a sale has taken place, but that
money owed for the transaction is still outstanding.
Credit note Document that records the cancellation of a sale, or part thereof.
Creditor (Accounts A person or entity our business owes money to. The modern term
payable) for creditors is “accounts payable”
Creditors allowances Journal used to record the returns/ rebates with regard to
journal transactions previously entered into the CJ.
Creditors control A general ledger account used as a control mechanism for accounts
account payable.
Creditors ledger A subsidiary ledger that includes all the individual creditors accounts.
Creditors list A list of the individual balances in the creditors ledger. The balance
of the list must equal the balance of the creditors control account.

Term Definition
Current account Equity account peculiar to a partnership which holds the equity
distributions to and from partners, based on the partnership
agreement.
Current assets Resources that are cash or likely to be turned into cash within one
year. Also referred to as short-term assets.
Current liabilities Short-term debts.
Debtor (Accounts A person or entity that owes our business money. “Accounts
receivable) receivable” is a modern term for debtors.
Debtors list A list of the individual balances in the debtors ledger. The total of the
list must equal the balance of the debtors control account.
Depreciation An expense account created with the purpose of reducing the value
of assets to the carrying value to be disclosed in the financial
statements.
Discounts Discounts are reductions in selling prices offered to customers/
clients or reductions in the purchase prices offered by suppliers.
Discounts usually take the form of either a trade discount or an early
settlement discount.
Double entry system A system whereby the total value of the debits in a transaction must
equal the total value of the credits.
Drawings account Account used when the owner withdraws valuables from the
business.
Electronic Funds Electronic transfer of money from one bank account to another.
Transfer
Ethics Thinking about or pondering a certain kind of behaviour.
EFT confirmation slip Proof of Electronic Funds Transfer (EFT).
Expense accounts Accounts used to record decreases in equity.
Final accounts These are accounts used to facilitate the year-end accounting
procedures, where income and expense accounts are closed off and
owner’s equity is updated at the financial year-end. There are two
final accounts used in the books of a sole trader, namely the trading
account and the profit-and-loss account.
Financial accounting Discipline involving recording of transactions that have happened in
the past.
Financial statements These are reports set up by an accountant outlining the financial
position and performance of the business for a specific financial
period.
Financial year 12-month reporting period for a business.

Term Definition
General journal Journal used to record sundry transactions that cannot be recorded
in any of the other seven journals. This includes adjustments and
closing transfers.
General ledger The general ledger summarises the subsidiary journals, and
accumulated running balances that are listed on the trial balance.
The general ledger is also the official records of account as it is the
book in which business transactions are ultimately recorded.
General ledger A statement showing corrective debits and credits to ensure the
reconciliation balancing of a trial balance.
statement
Gross profit The difference between the selling price and the cost price of a
product.
Income accounts Accounts used to record increases in equity.
Income statement Statement of financial performance. The modern term for an income
statement is the “statement of profit or loss and other
comprehensive income”.
Journal A book of prime entry, in tabular form.
Journal voucher Internal source document from which transactions are recorded in
the general journal.
Language of business Accounting is often referred to as the language of business, an
“international” language that crosses many borders.
Legal persons Companies, Close Corporations, trusts and deceased estates.
Liabilities The debts of the business.
Mark-up The amount added to the cost price of a product to arrive at its
selling price.
Net profit The difference between the total income and total expenses of a
business.
Net working capital The net difference between the current assets and current liabilities
of a business.
Nominal accounts The section of the general ledger and trial balance that includes all
section the accounts that will end up in the income statement, i.e. the
income and expense accounts.
Non-current assets Resources that are not expected to be turned into cash within one
year.
Non-current Long-term debts.
liabilities
Original credit Source documents used to record credit purchases in the creditors
invoices journal.

Term Definition
Original credit notes Source documents used to record returns to/ rebates on goods or
services previously recorded in the creditors journal.
Owner’s equity Wealth of the owner in his or her business. Assets less liabilities =
Owner’s equity.
Partnership Form of ownership where two or more equity participants (but no
more than 20) contribute assets or skills to a business enterprise,
and share in the profits based on a predetermined ratio.
Perpetual inventory A system of inventory keeping whereby stock levels are updated at
system the point of sale. Perpetual inventory has two main benefits. It
improves record-keeping practices, making it simple to calculate cost
of goods sold in a certain period. Secondly, it allows businesses to
see accurate inventory at a given moment, making it easier to know
when to order more. This higher degree of control can make
companies more dynamic and helps keep up with customer demand.
Its major disadvantage is the upfront cost of implementation.
Profit and loss A final account that is used in the manual system of accounting to
account facilitate the closing transfers needed to close off additional income
and expense accounts.
Post-closing trial Index of accounts in the general ledger that outlines the financial
balance position of the business as at the last day of the financial year.
Profit The amount by which the total sales exceeds the total costs for a
financial period.
Rules of double entry The rules whereby assets, drawings and expenses are debited when
they are increased; whereas liabilities, income and capital are
credited when they are increased.
South African Established by legislation to collect revenue and to ensure that
Revenue Service individuals and businesses comply with tax laws.
Statement of profit Modern term for “income statement”. This is a statement of income
or loss and other and expenditure and measures financial performance.
comprehensive
income
Statement of Modern term for “balance sheet”. This is a statement of equity,
financial position assets and liabilities.
Statement of The section of the general ledger and trial balance that includes all
financial position the accounts that will end up in the statement of financial position,
section i.e. the proprietary accounts (capital and drawings), asset accounts
and liability accounts.
T-account A structure used for general ledger accounts, clearly showing a left-
hand side (debit) and a right-hand side (credit)

Term Definition
Timing differences These differences occur when the bank is not aware of a particular
transaction recorded by the business.
Trading account A final account used in the manual system of accounting to facilitate
the closing transfers of all accounts related to the calculation of gross
profit for the financial year.
Trading stock The traditional term used as a synonym for trading inventory.
Trading inventory The merchandise sold by a trading business. This is the modern term
for “trading stock”.
Trial balance List of the totals or balances on the accounts in the general ledger
(index of accounts). The trial balance must be in balance to prove
that the rules of double entry have been applied throughout.
Value Added Tax Indirect tax levied by vendors on the supply of goods and services.
(VAT)
VAT exclusive The amount excluding VAT, constituting the true cost price (expense)
amount or selling price (income) of the product or service.
VAT inclusive The amount including VAT, being the amount which the client or
amount customer pays at the point of sale.
Working capital This refers to the current assets of the business.

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IIE Learn Module Outline ACBP5122

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Using this Module Outline

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This Module on Learn

• A list of prescribed material;

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Icons Used in this Document and on Learn

Specific references to sections in the prescribed work.

Questions to help you recognise or think about theoretical concepts to be

Opportunities to make connections between different chunks of theory in the

Real life or world of work information or examples of application of theory, using

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Maritz, C.J. and Hibling, A.H. Accounting 1B Workbook. Cape

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Assignment/Tests/ Assignment Test Examination

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Assessment Preparation Guidelines

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Assignments/ Projects Assignment 1 Assignment 2

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Assessment Preparation Guidelines

Work through Mock Assessments or

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Learning Unit 1: Theme Breakdown

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Learning Unit 2 Debtors and Creditors Reconciliation

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Learning Unit 2: Theme Breakdown

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Learning Unit 3 Depreciable assets

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Learning Unit 3: Depreciable assets

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Learning Unit 4 Financial statements of a sole trader

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Learning Unit 4: Theme Breakdown

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Learning Unit 5 Partnerships

In this learning unit, we will look at business partnerships.

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Learning Unit 5: Theme Breakdown

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Learning Unit 6 Close Corporations

In this learning unit, we will look at close corporations and companies.

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Learning Unit 6: Theme Breakdown

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Learning Unit 7 Incomplete Accounting Records and Revision

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Learning Unit 7: Theme Breakdown

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Glossary of Key Terms for this Module

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