NCEA

Accounting - trial annotated exemplar level 3 AS91405

Demonstrate understanding of accounting for partnerships (3.2)

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This annotated exemplar is intended for teacher use only. The student work shown does not always represent a complete sample of what is required. Selected extracts are used, focused on the grade boundaries, in order to assist assessors to make judgements at the national standard.

Excellence

Commentary

Student work extract
Student 1 (PDF, 151KB)

For Excellence, the student needs to demonstrate comprehensive understanding of accounting for partnerships.

This involves justifying the application of partnership accounting elements to enable the partnership to continue operations.

This student has processed partnership transactions and statement extracts for Mighty Mini Golf (1). The accuracy of their processing shows a comprehensive understanding of accounting for partnerships (2).

The entity’s partnership agreement clauses have been justified in the context of the needs of Mighty Mini Golf (3) and the two partners (4).

In justifying how the clauses benefit Mighty Mini Golf, the student has explained impacts on the entity maintaining its viability. Day-to-day operational needs and longer-term goals of the business have been considered.

High Merit

Commentary

Student work extract
Student 2 (PDF, 174KB)

For Merit, the student needs to demonstrate in-depth understanding of accounting for partnerships.

This involves explaining the application of partnership accounting elements to enable the partnership to continue operations.

This student has processed transactions for Mighty Mini Golf at an in-depth level. ‘Follow through’ has been employed in appropriately transferring figures to the profit distribution statement, partners’ current accounts and the statement of financial position (1).

Partnership elements have been explained (2), and the student has recognised the link between partnership agreement clauses and the ongoing viability of the entity (3).

The student begins to justify how certain elements of the partnership agreement contribute towards the ongoing viability of Mighty Mini Golf (4).

This evidence does not reach Excellence because the student needs to accurately complete the profit distribution statement. Further justification of elements would need to be provided. For example, the student could explain how the goodwill from Sam’s former business represents income and profit for the partnership, and why it is appropriate that Alex’s salary is higher than Sam’s salary.

Low Merit

Commentary

Student work extract
Student 3 (PDF, 178KB)

For Merit, the student needs to demonstrate in-depth understanding of accounting for partnerships.

This involves explaining the application of partnership accounting elements to enable the partnership to continue operations.

This student has demonstrated, for Mighty Mini Golf, an in-depth understanding of formation entries, partners’ capital and current accounts, profit distribution statement and the statement of financial position extract and note (1). ‘Follow through’ has been employed in assessing processing.

The student’s explanations of some of Mighty Mini Golf’s partnership elements show an in-depth understanding of their purpose (2) and how they can assist the partnership to continue operations (3).

For a more secure Merit, the student could explain interest on capital accounts as capital investments have a significant impact on the viability of a partnership, use closing current account balances in the equity section of the statement of financial position.

High Achieved

Commentary

Student work extract
Student 4 (PDF, 180KB)

For Achieved, the student needs to demonstrate understanding of accounting for partnerships.

This involves applying partnership accounting elements to enable the partnership to continue operations.

This student has correctly processed formation entries, capital accounts and the statement of financial position and note (1). Partnership elements have been applied to Mighty Mini Golf (2). There is some recognition of how agreement clauses contribute to the partnership’s ability to continue operations (3).

To reach Merit, the student could demonstrate greater understanding of current accounts and the profit distribution statement by processing transactions with greater accuracy. Explanations of partnership agreement clauses could be more detailed.

Low Achieved

Commentary

Student work extract
Student 5 (PDF, 160KB)

For Achieved, the student needs to demonstrate understanding of accounting for partnerships.

This involves applying partnership accounting elements to enable the partnership to continue operations.

This student has accurately processed the partners’ capital accounts and the profit distribution statement is mostly correct (1). Some understanding of the purpose of Mighty Mini Golf’s partnership clauses has been demonstrated (2).

For a more secure Achieved, Alex’s formation entry would be recorded, allowance for doubtful debts calculated, and the statement of financial position extract and note would be completed.

Partnership elements would be more closely applied to Mighty Mini Golf.

High Not Achieved

Commentary

Student work extract
Student 6 (PDF, 174KB)

For Achieved, the student needs to demonstrate understanding of accounting for partnerships.

This involves applying partnership accounting elements to enable the partnership to continue operations.

This student has accurately processed formation entries and capital accounts (1). Some generic understanding of partnership elements has been demonstrated (2), with minimal application to Mighty Mini Golf (3).

To reach Achieved, the student could accurately process more profit-sharing transactions in current accounts, enter salaries in the profit distribution statement and complete the statement of financial position extract and note.

Partnership elements could be applied in context and linked to the ongoing operations of the entity.