1. Understand the purpose of Accounting
Year 12- Learning Aim C
Understand the purpose of Accounting

2. Starter (15 mins)
Describe the role of the Financial Conduct Authority (FCA) (2 marks)
2) Identify two advantages of online banking (2 marks)
3) Explain two advantages of building societies (4 marks)

3. Aims of today
Recap over Consumer Protection and information and advice.
Begin Learning Aim C. BUSINESS FINANCE.
Purpose of Accounting.

4. The purpose of Accounting- BUSINESS FINANCE
What do you believe is the importance of Accounting?
What is Accounting?
Discuss in groups.

5. Reasons for Accounting
Recording transactions
Money going in and out (income and expenditure)
HM Revenue & Customs (HMRC)
Management of business
Manager is responsible for planning, monitoring and controlling the resources of a business.
Helps to make informed and planned choices for the future.
Ensure there are sufficient funds to make those plans and choices.
Compliance
Governed by laws and regulations.
Internal and external Audits.
To prevent fraud.

6. Activity 1 (20 mins)
As part of the initial screening process, you have gained insight into the purpose of accounting from the shopping centre Bluewater. Bluewater have asked you to describe the purpose of accounting to the new shopping centre Westfield Stratford City.
Write a letter to the Westfield:
Explaining the meaning of accounting
Describing why a business needs to keep financial records.

7. Peer assessment (20 mins)
Print letters/share letters with another student.
In a different coloured pen, consider and mark the following-
Spelling, punctuation and grammar. (Sp, punc and gr)
Accuracy of statements made- check back on learning of the purpose of accounting.
Is the letter in a correct format?

8. Measuring Performance Key terms
Sales revenue
Profit
Gross Profit
Net Profit
Loss
Trade receivables
Trade payables

9. Activity 2
Complete the Profit and Loss Worksheet.

10. Types of income
Capital Income e.g. Fixed assets, Loans, Mortgages, Shares, Owners’ capital, Debentures.
Revenue Income e.g. Sales, Rent received, Commission received, Interest received, Discount received.

11. Some members of your team are unsure of the difference between capital and revenue items of expenditure and income. Prepare a written document for team members, containing the following information:

12. SMHW
Find out what is meant by capital expenditure? Give examples.

13. Aims of today Recap over purpose of accounting
Measuring performance e.g. gross profit, net profit.
Types of income outlined and explained.
Types of expenditure outlined and explained.

14. Quick recap Explain three reasons for accounting?
What is meant by gross profit? Can you give the formula?
What is net profit? Can you give the formula?

15. Types of income Capital Income Revenue Income
Money invested by the owners or other investors that is used to set up the business or buy additional equipment e.g. fixed assets.
Sales
Loans
Rent Received
Mortgages
Commission received
Shares
Interest Received
Owners’ capital
Discount Received.
Debentures

16. Types of expenditure Capital Expenditure Revenue Expenditure
Non current assets
Inventory
Intangibles e.g. patents, trademarks, brand name.
Rent
Rates
Heating and Lighting
Water
Insurance
Administration
Salaries
Wages
Marketing
Bank charges
Interest paid
Depreciation
Discount allowed.

17. Quick knowledge check Identify one intangible asset. (1 mark)
Identify two sources of revenue income. (2 marks)
Outline what is meant by ‘Depreciation’.

18. Plan for Mr Boland (Homework)
Plan out 2 questions you would like to ask him about the banking sector?
What other factors are you interested in?