Assessment Report

Level 1 Accounting 2021

Standards 90976  90978  90980 

Part A: Commentary

There are three external achievement standards in this examination. It is possible to complete all three papers in three hours.

Achievement Standards 90978 and 90980 have a resource booklet, which must be read to complete the questions. The resource booklet provides essential details of the entity being assessed. Candidates should take time to read this thoroughly to be able to answer in context. Candidates who included appropriate examples for the context in their responses achieved more highly.

The three papers relate to independent entities and therefore it does not matter which order papers are completed in.

In preparation for the external examination, it is important that candidates are familiar with the Achievement Standard, Assessment Specifications, and any documents referred to in these resources.

Part B: Report on standards

90976: Demonstrate understanding of accounting concepts for small entities

Examinations 

This examination consisted of three questions, with four to five sub-questions. The questions required candidates to show understanding of accounting concepts as detailed in the explanatory notes of the Achievement Standard (https://www.nzqa.govt.nz/nqfdocs/ncea-resource/achievements/2019/as90976.pdf) and apply these to the context of a small entity, Cheap Costumes.

Observations 

Candidates who could accurately relate the accounting concepts and elements to the context of Cheap Costumes achieved higher grades.

It is necessary for candidates to be able to define accounting concepts and elements to be successful in this Achievement Standard.

Clarity of response and specifically addressing the question asked resulted in higher achievement.

Reference to the context, instead of generic definitions, is essential for higher grades.

Candidates who recognised that the context was a service entity achieved more highly as their application was accurate.

A large number of papers were incomplete with very few responses.

Grade awarding 

Candidates who were awarded Achievement commonly:

  • identified at least two characteristics of the accounting elements
  • described accounting concepts that were asked for across the three questions
  • identified expenses
  • completed most of the analysis table correctly
  • calculated equity correctly.

Candidates whose work was assessed as Not Achieved commonly:

  • attempted little of the paper
  • demonstrated little knowledge and gave vague answers which did not address the question asked
  • were not confident in the basic accounting concepts and elements required
  • provided rote learned definitions with no context link.

Candidates who were awarded Achievement with Merit commonly:

  • explained accounting concepts in relation to Cheap Costumes
  • explained financial elements in relation to Cheap Costumes
  • completed most / all of the questions
  • answered two out of three of the questions very well
  • recognised that the context was a service entity.

Candidates who were awarded Achievement with Excellence commonly:

  • fully explained the accounting concepts in relation to Cheap Costumes
  • fully explained the elements in relation to Cheap Costumes
  • understood that Cheap Costumes hired costumes rather than selling them
  • demonstrated a clear understanding of accrual basis at least for one financial statement, in particular recognising that the current liability created in the statement of financial position represented an obligation the business has in providing the service in the next accounting period
  • completed all questions in the paper
  • used resource material, e.g. figures or account names in their response.

90978: Prepare financial statements for sole proprietors

Examinations 

This examination consisted of three questions. It required the preparation of an Income Statement, Statement of Financial Position, and Cash Budget.

Complete financial statements were required from the resource booklet provided.

Candidates should be familiar with the layout of financial statements as shown in the NCEA Level 1 Accounting Appendix.

Candidates should be familiar with the balance day adjustments as noted in the Achievement Standard (https://www.nzqa.govt.nz/nqfdocs/ncea-resource/achievements/2019/as90978.pdf) explanatory notes.

Observations 

Candidates who accurately completed balance day adjustments and classify accounts achieved more highly than those who opted not to complete the adjustments. It is important that candidates do not abbreviate account names as this is not in-line with good accounting practice.

Candidates should read the introductory information describing the business to help with the classification of accounts.

Candidates who referred to account names in the Cash Budget were rewarded more highly than those who wrote descriptions of the transaction.

Candidates need to be more familiar with the process (final three lines) of the Cash Budget.

Grade awarding 

Candidates who were awarded Achievement commonly:

  • classified accounts across multiple statements
  • distinguished mostly between cash and non-cash transactions
  • abbreviated account names rather than using the full name as noted in the Trial Balance
  • were able to complete the Property, Plant and Equipment note
  • included foreign items across statements.

Candidates whose work was assessed as Not Achieved commonly:

  • attempted little of the paper
  • included multiple foreign items in statements
  • used incorrect headings or left off headings in the statements
  • wrote incorrect account names
  • abbreviated account names.

Candidates who were awarded Achievement with Merit commonly:

  • used appropriate and correct account names
  • used correct headings in the various statements
  • correctly calculated and reported most balance day adjustments
  • included only cash items in the Cash Budget
  • incorrectly completed or left out the process part of the Cash Budget
  • included a small number of foreign items across the paper.

Candidates who were awarded Achievement with Excellence commonly:

  • calculated and reported balance-day adjustments correctly
  • prepared accurately classified financial statements
  • did not include foreign items
  • identified and reported the cash surplus in the Cash Budget
  • accurately completed the process part of the Cash Budget.

90980: Interpret accounting information for sole proprietors

Examinations 

This examination consisted of three questions. Each question was broken into further sub questions to allow candidates to build up evidence of understanding.

Each question started with a calculation through to a recommendation.

A resource booklet detailing all necessary formulae and case study information was provided. 

Candidates should be familiar with the standard analysis measures required as noted in the Achievement Standard (https://www.nzqa.govt.nz/nqfdocs/ncea-resource/achievements/2019/as90980.pdf) explanatory notes.

Observations 

Candidates who integrated the resource material into their responses scored highly as they gave appropriate reasons and recommendations.

Candidates who used rote learned responses without reference to the context were limited in the grade they could receive. Candidates who wrote too much often contradicted themselves. Candidates should write concisely and directly answer the questions asked.

When completing the written report task, candidates need to ensure their response answers the main question and is supporting by addressing each of the bullet points.

Candidates need to make clear reference to the context and analysis measures being referred to.

When making recommendations or explaining trends, candidates who gave specific causes that impacted on accounts and analysis measures were rewarded highly.

Candidates who included specific figures were rewarded.

Grade awarding 

Candidates who were awarded Achievement commonly:

  • identified the trend and stated a reason for the trend
  • accurately completed the calculations
  • were able to explain the meaning of the analysis measure, often without context
  • relied on rote-learned answers in many cases that were not always relevant for Bike World.

Candidates whose work was assessed as Not Achieved commonly:

  • completed only the calculations
  • completed one question well and did not sufficiently answer the other two questions
  • wrote the wrong explanation for the question
  • did not answer the question being asked.

Candidates who were awarded Achievement with Merit commonly:

  • stated the trend and explained a reason for the trend using appropriate account names and an appropriate example for Bike World
  • described one recommendation using appropriate account names and an appropriate example for Bike World
  • explained the mark-up percentage for the $1000 cost road bike
  • made an incorrect statement, preventing the excellence grade, e.g. when Baxter invests more capital into Bike World the equity increases and no change to assets.

Candidates who were awarded Achievement with Excellence commonly:

  • provided a valid reason for the trend using dollars and specific examples from the resource material
  • justified the reason for the trend and / or recommendation by explaining the impact on the accounts, classifications, and the analysis measure
  • understood clearly what had happened to the business over the past year and how these events impacted the analysis measures
  • completed all parts of the question.

Accounting subject page

Previous years' reports

2020 (PDF, 269KB)

2019 (PDF, 239KB)

2018 (PDF, 120KB)

2017 (PDF, 47KB)

2016 (PDF, 213KB)

 
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