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CTE/Business, Finance and Marketing Curriculum Accounting 2
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Core Standards of the Course

Strand 1
Students will define generally accepted accounting principles and basic business structures and each step of the basic accounting cycle as related to a merchandising corporation.

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Standard 1
Identify the difference in the financial statements between a merchandising corporation and a sole proprietor service business.

Standard 2
Identify each step of the accounting cycle for a merchandising corporation.

  1. Step 1 - Analyze business transactions to determine debit(s) and credit(s)
  2. Step 2 - Journalize transactions in a general journal
  3. Step 3 - Post debit(s) and credit(s) from the general journal to ledger
  4. Step 4 - Prepare a trial balance to prove that debits equal credits
  5. Step 5 - Journalize and post adjusting entries
  6. Step 6 - Prepare the following financial statements:
    • Income statement (profit and loss)
    • Statement of retained earnings
    • Balance sheet
  7. Step 7 - Journalize and post-closing entries
  8. Step 8 - Prepare post-closing trial balance

Strand 2
Students will explain and identify calculations, reports, and journal entries related to payroll.

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Standard 1
Explain and identify calculations and reports related to payroll activities.

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  1. Explain the formulas for gross earnings based on an hourly rate, salary, commission, and salary plus commission
  2. Identify and explain employee deductions including taxes (federal, social security, medicare, state) and other voluntary deductions used to calculate net pay
  3. Identify and explain employers’ payroll taxes (social security, medicare, federal unemployment, andstate unemployment) and employee benefits paid by the employer
  4. Discuss and interpret forms and reports related to payroll:
    • Forms
      • W-4
      • W-2
      • I-9
    • Reports
      • Payroll Register
      • Employees’ Earnings Record

Standard 2
Identify the journal entries for employee payroll, employer payroll taxes and payment of payroll tax liabilities.

Performance Skills
Payroll:

  1. Calculate, journalize, and post employee payroll, employer payroll taxes, and payroll tax liabilities.

Strand 3
Students will identify and describe source documents and journal entries related to sales and cash receipt transactions.

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Standard 1
Identify and evaluate source documents related to sales and cash receipt journal entries.

  1. Sales invoices
  2. Cash register tapes
  3. Receipts

Standard 2
Describe the process for journalizing and posting transactions related to sales and cash receipts.

  1. Sale of merchandise
  2. Sales tax
  3. Returns of merchandise from a customer
  4. Sales discounts
  5. Accounts receivable subsidiary ledger

Performance Skills
Sales & Cash Receipts:

  1. Journalize and post transactions for sale of merchandise with and without sales tax, sales returns, and sales discounts.

Strand 4
Students will identify and describe source documents and journal entries related to purchases and cash pay-ment transactions.

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Standard 1
Identify and evaluate source documents related to purchases and cash payment journal entries.

  1. Checks
  2. Purchases invoices

Standard 2
Describe the process for journalizing and posting transactions related to purchases and cash payments.

  1. Purchases of merchandise
  2. Cash payments
  3. Returns of merchandise to a vendor
  4. Purchases discounts
  5. Accounts payable subsidiary ledger

Performance Skills
Purchases & Payments:

  1. Journalize and post transactions for purchases of merchandise, purchase returns, and purchasediscounts.

Strand 5
Students will explain and describe the purpose and procedures for common adjusting entries and how they affect the relationship between the trial balance and adjusted trial balance.

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Standard 1
Explain the purpose of adjusting entries and how they relate to the matching principle.

Standard 2
Describe the procedures to calculate, journalize and post the following adjusting entries:

  1. Inventory changes
  2. Supplies used
  3. Prepaid Insurance expired
  4. Corporate federal income tax adjustment

Standard 3
Explain the relationship between the trial balance and the adjusted trial balance.

Performance Skills
Adjusting Entries:

  1. Identify and calculate adjustments, journalize adjusting entries, post to general ledger accounts, and prepare an adjusted trial balance.

Strand 6
Evaluate changes to the income statement, balance sheet, and stockholders’ equity for a merchandising corporation.

Standard 1
Compare and contrast the income statement between a service sole-proprietorship and a merchandising corporation.

  1. Cost of merchandise sold
  2. Gross profit
  3. Depreciation expense
  4. Bad debt expense
  5. Operating income
  6. Corporate income tax

Standard 2
Compare and contrast the balance sheet between a service sole-proprietorship and a merchandising corporation.

  1. Inventory
  2. Accumulated depreciation
  3. Allowance for uncollectible accounts
  4. Current/Long-term assets and liabilities
  5. Payroll liabilities
  6. Stockholders’ equity
  7. Capital stock
  8. Retained earnings

Standard 3
Define and identify the two permanent accounts in stockholders’ equity and how they change during the accounting period.

  1. Define and identify elements that change retained earnings
    • Net income (net loss)
    • Dividends
  2. Define capital stock and explore ways the balance could change

Standard 4
Define and interpret common financial ratios and their uses to stakeholders.

  1. Gross profit margin (Gross profit/Sales)
  2. Return on sales (Net income/Sales)
  3. Quick ratio (Cash+Accounts receivable/Current liabilities)
  4. Debt-to-equity (Total liabilities/Total stockholders’ equity)
  5. Return on equity (Net income/Total stockholders’ equity)

Performance Objective
Financial Statements:

  1. Prepare a balance sheet and multi-step income statement for a merchandising corporation andcalculate financial ratios.

Strand 7
Explain and describe closing journal entries and the post-closing trial balance.

Standard 1
Explain the purpose of closing journal entries as they apply to a merchandising corporation.

Standard 2
Describe the difference between a trial balance and a post-closing trial balance for a merchandising corporation.

Performance Objective
Closing Entries:

  1. Journalize and post closing entries and create a post-closing trial balance.

Strand 8
Students will identify and explain different write-off methods and procedures to record write-offs using the allowance method.

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Standard 1
Identify what “writing off” an accounts receivable means, why it is necessary, and the two common write-off methods.

  1. Direct write-off method
  2. Allowance method

Standard 2
Explain the journal entries related to the allowance method for writing off uncollectible accounts.

  1. Recording the adjusting journal entry for the allowance method
    • calculate adjustment amount using the net sales method
    • calculate adjustment amount using the aging method
  2. Writing-off to close uncollectible account
  3. Reopening a previously written-off account
  4. Recording payment for reopened account

Standard 3
Explain concept of Book Value of Accounts Receivable and how to calculate it (Accounts Receivable - Allowance for Uncollectible Accounts)

Performance Skills
Uncollectible Accounts:

  1. Journalize and post journal entries using the allowance method for uncollectible accounts receivable.

Strand 9
Students will define depreciation and explain the process for calculating, journalizing, and posting straight-line depreciation.

Standard 1
Define depreciation and how it relates to GAAP and the matching principle.

Standard 2
Explain the procedure for calculating depreciation using the straight-line method.

  1. Identify original cost, salvage value, and useful life of the asset
  2. Describe the calculation: (original cost - salvage value)/useful life
  3. Identify the process to calculate partial-fiscal-year depreciation

Standard 3
Identify and describe the procedure to journalize and post adjusting journal entry for depreciation.

Performance Skills
Depreciation:

  1. Calculate depreciation using the straight-line method, journalize and post the adjusting entry for depreciation.

Strand 10
Explore different accounting career options and how ethics and technology affect the accounting profession.

Standard 1
Explore examples of ethics in the accounting profession.

Standard 2
Identify and explore the use of automated accounting software, such as:

  1. Spreadsheets
  2. QuickBooks
  3. Industry-standard accounting and tax software

Standard 3
Explore Internet sites and mobile apps for accounting purposes (e.g. AICPA, start here go places, IRS, Intuit, Accounting today, Journal of Accountancy, Securities and Exchange Commission, Xero, Sage)

Standard 4
Explore careers in the field of accounting (e.g. accountant, accounting clerk, CPA)



UEN logo http://www.uen.org - in partnership with Utah State Board of Education (USBE) and Utah System of Higher Education (USHE).  Send questions or comments to USBE Specialist - Racheal Routt and see the CTE/Business, Finance and Marketing website. For general questions about Utah's Core Standards contact the Director - THALEA LONGHURST.

These materials have been produced by and for the teachers of the State of Utah. Copies of these materials may be freely reproduced for teacher and classroom use. When distributing these materials, credit should be given to Utah State Board of Education. These materials may not be published, in whole or part, or in any other format, without the written permission of the Utah State Board of Education, 250 East 500 South, PO Box 144200, Salt Lake City, Utah 84114-4200.