Reference no: EM132426561

FNSACC311 Process financial transactions and extract interim reports

Aims of this assessment - This assessment focuses on processing financial transactions and extracting interim and final financial reports.

Assessment Activities - Short Answer and Worked Answer Questions

The following questions are based on the material in the textbook "Accounting Principles" by Anne Collins & Andrew Duncan, 12th Edition, Books 1 and 2, (January 2016) or 13th Edition, Books 1 and 2, (January 2018). Book 1 contains Chapters 1- 13; Book 2 contains Chapters 14-18.

The following questions are based on the material in Chapter 1:

1a. Explain the concept of the 'accounting entity'.

1b. List and describe the 6 legislative requirements that must be complied with by accountants and bookkeepers.

1c. Define the accounting function. What 3 accounting practices are carried out under the accounting function?

The following questions are based on the material in Chapter 2:

2. For the following accounts, show the Account Type (Asset, Liability, Owner's Equity, Revenue or Expense) and the Report (Balance Sheet or Income Statement) to which it belongs:

	Account Type	Report
Inventory
Mortgage
Accounts Receivable
Wages
Sales
Cost of Goods Sold
Advertising
Accounts Payable
Furniture and Fittings
Fees Received
Capital
Telephone Expense
Drawings
Electricity Expense
Loan
Motor Vehicle
Cleaning Fees paid
Interest Received

The following questions are based on the material in Chapter 3:

3a. Surveying Consultants provides surveying services and are registered for GST in accordance with the legislative and regulatory requirements relating to financial transactions for businesses of their size.

Their services are mainly surveying services: revenue accounts are set up as Surveying Fees (A/C 410) and Other Fees (A/C 411).

The following cash receipt documents are for the first week in August. The firm banks daily.

Required:

i) What type of documents are these?

ii) What information should be included in such a document, and has this been done?

iii) Please record the information from these documents, per the firm's organisational procedures, in the Cash Receipts Journal for August using the following template.

3bi) List 3 key details you need to look for on a cheque to ensure the cheque is valid?

3bii) What checks does the EFTPOS system perform before processing an EFTPOS transaction?

3biii) From the information provided below, you are required to complete a receipt. Chemco Pty Ltd received a cheque from AC Cleaning on 1 June 2018 for the amount of $240 being payment for their account.

3c. Describe the banking procedures that could be used for depositing batch cheques and cash using a deposit slip. Include the details that should be included in the deposit form.

3d. Identify some industry-accepted security and safety precautions when transporting cash from a workplace to a bank.

3e. What documentation is provided to a business as 'proof of lodgement' for banking monies? How would you file these?

Tip: Think about whether you would file these with other records/documents and if in any specific order.

The following questions are based on the material in Chapter 4:

4a. According to it's organisational procedures, enter the transactions of Salt Works into the Cash Payments Journal and the totals at 17 May.

May 03	Chq 52	Wages	730 (no GST)
May 05	Chq 53	Telephone	320 plus GST
May 09	EFT	Rent	820 plus GST
May 12	EFT	Drawings	120 (no GST)
May 12	EFT	Inventory	1,800 plus GST
May 16	EFT	Inventory	1,400 plus GST
May 17	Chq 54	Wages	730 (no GST)

4b. Please list the controls / procedures that you could adopt in a business for the handling of Electronic payments, Cheques and Cash.

The following questions are based on the material in Chapter 5:

5(a) Required: For the following transactions, complete the Transaction Analysis Chart. (The first transaction has been completed for you.)

Date	Transaction	Account Name	Account Type	$ Increase +  or $ Decrease -	DR or  CR
01/6	Initial capital paid into business bank account $35,000	Bank Capital	A OE	+$35,000 +$35,000	DR CR
02/6	Received money for a long term loan $100,000
03/6	Paid business insurance premium $700 + $70 GST + $40 stamp duty (no GST).
04/6	Paid cash for stationery $165 including GST
05/6	Interest received on bank account $25 (GST does not apply)
06/6	Service revenues earned in cash amounted to $2,000 + $200 GST
07/6	Commission revenue received $1200 + $120 GST
08/6	Paid cash for a vehicle $16,000 + $1,600 GST
09/6	Drawings $1,000
10/6	Paid $20,000 off the loan

Also required: Using the templates provided:

(b) Prepare General Journal entries for the transactions.

(c) Post the General Journal entries to the ledgers and include 'DR' or 'CR' to each running Balance for each ledger account.

(d) Prepare a Trial Balance as at 10 June.

5(e) If a trial balance does not balance, what steps would you take to ensure that it balances? If the trial balance does balance, does that mean it is fully correct, and why?

5(f) Describe the concept of double entry accounting.

The following questions are based on the material in Chapter 6:

6a. T. Rade operates a petty cash system per its organisational procedures. Vouchers are checked and processed by the Petty Cashier and recorded in the Petty Cash Book.

From the following information for T. Rade:

(a) Prepare and balance the Petty Cash Book.

(b) Prepare the General Journal entries for:

(i) Establishment of the petty cash fund, and

(ii) Reimbursement of the fund.

01/7 The Petty Cashier received cheque 4233 for $100 to establish the fund.

In their organisational policy and procedure documents T. Rade specify that each expense is to be recorded on a separate voucher.

During the following week the Petty Cashier checked and paid the following amounts (GST inclusive), with each expense being on a separate voucher (starting at Voucher No. 1):

01/7 Tea & coffee $17.60 (GST Free),

01/7 taxi fare $7.70

02/7 Courier $11.00,

02/7 stationery $4.40

04/7 Biscuits $9.35,

04/7 taxi fare $9.90

06/7 Courier $5.50,

06/7 stationery $3.30

07/7 Office cleaning $11.00

The fund was reimbursed on July 8 (cheque 4275).

6c. Small business, in particular those that are owner-operated, often have less formal ways of dealing with petty cash expenses. Instead of using a cash imprest system, list 2 alternative methods that could be used to deal with petty cash expenses which would still maintain the integrity of the relationship of the business' financial systems. Why might a business review and update the way they treat petty cash expenses?

The following questions are based on the material in Chapter 7:

7. Attached are selected transactions from the general journal of Brian Smith Catering for the month of March. These journals are in line with its policies and procedures and have been approved by the Finance Accountant.

Required:

(a) In line with its policies and procedures, post from the general journal to the general ledger and to the individual creditor accounts in the accounts payable subsidiary ledger. The opening balances have been entered for you.

(b) Prepare a schedule of accounts payable as at 31 March.

8. Paymore Landscapers supplies you with the attached information for October.

Required:

(a) Enter the above transactions into the General Journal.

(b) Post to the General Ledger and to the individual debtor accounts in the Receivables Subsidiary Ledger.

(c) Prepare a schedule of Accounts Receivable as at 31 October.

8(d) Please advise what is required in setting up subsidiary ledgers. How are transactions now processed?

8(e) What steps would you take if, in 8c), the total of the subsidiary ledger did not reconcile with the control account balance?

8(f) You are developing the policies and procedures in relation to credit sales. What processes would you include in relation to:

i. preparing invoices

ii. preparing journal entries for these invoices

iii. authorising these journal entries

iv. filing invoices for auditing purposes (this may be related to the invoice numbering system)?

Tip: the specific answers to these questions may not be completely found in the textbook. Use your learning and understanding of recording credit sales to arrive at your answers. Feel free to research other sources to assist you.

8(g) Please complete the tax invoice based on the following sales details:

Sale of a quantity of 1,000 ABC books at $15 each (including GST) to Ben Smith (123 Smith St, Smithville 9015), on 30-day terms, based on order #236, invoice #89. Shipped on 16 June 2018 via Alpha Couriers.

The following questions are based on the material in Chapter 8:

9. At 30 June, H. Henry has been examining the amounts outstanding from his Accounts Receivable.

One account, I. Doubt, owes $1,650 (including GST) but pays only $550 on 30 June, stating that he will be unable to pay the balance. Henry decides to write off the balance of Doubt's debt as being unrecoverable.

Lester is both a customer and a supplier. Henry wants to adjust for a $660 balance both owing to, and owed by, L. Lester.

Required:

(a) Record, as General Journal entries, the receipt of cash from customer I. Doubt and the write-off of the balance as irrecoverable.

(b) Record the General Journal entry for the contra adjustment.

(c) Post the entries to the General Ledger accounts and to the Subsidiary Ledger accounts for I. Doubt and L. Lester.

9(d) What report can be used to manage debtors and assist in the identification of bad or doubtful debts, and what information does it contain?

9(e) You are establishing a credit policy to assist in the collection of monies owing by your customers. Please provide details of the steps you would include to recover overdue debts, based on varying levels of lateness.

How would your policy change if you believed the level of overdue debts was too high?

9(f) Peters Plants sells artificial plants for indoor and outdoor use. The company is owned and managed by Peter Petersen.

Required:

9f(i) Using the information provided in Peters Plants Aged Receivable report as at 31 March 2018, complete an Overdue Accounts Review.

9f(ii) Using the information from Peters Plants' Credit Policy and Aged Receivables report as at 31 March 2018, what steps would you take regarding the collection of monies outstanding as at 31 March 2018?

9f(iii) Who would you distribute these reports to?

9f(iv) Where would these reports be filed?

9(g) In order to pay the invoices that have been received from your suppliers, what checks would you first undertake on these supplier invoices before making payment?

The following questions are based on the material in Chapter 9:

10. The accountant of Harvey Imports provides trading information for the year ending 30 June 2016. As most stock is imported, customs duty is paid on many items of stock. There are also delivery charges incurred.

At 30 June 2016, the records of Harvey Imports provide the following details:

Purchases ledger balance $32,300

Stocktake at 30 June 2016 $17,800

Customs Duty account balance $1,600

Opening inventory $32,000

Freight Inwards account balance $1,550

Sales account balance $51,800

Required: Prepare a Trading Statement for the year ending 30 June 2016 with detail for the COGS.

The following questions are based on the material in Chapter 10:

11. ABC Boxes made the attached transactions during the month of August. ABC Boxes use a periodic inventory system.

Required:

11a. Enter the above transactions into the Credit Sales Journal. Cross-balance using the column totals.

11b. Refer to the invoices above. ABC Boxes received a payment from B Brown and issued the following payment receipt.

The funds were banked and the following journal entry was recorded in the Cash Receipts Journal.

Dr Bank $1,340.00

Cr Debtors $1,340.00

Required:

Check the invoice for B Brown and the cash receipt given to B Brown.

(Hint: Have the amounts in the Cash Receipts Journal been recorded correctly?)

Record the adjustment needed in the Cash Receipts Journal to correct the error?

12. McGuire Corp made the following Credit Purchases and Returns during April.

All amounts include GST, and McGuire Corp uses a periodic inventory system.

Date	Tax Invoice/Tax Adjustment	Details	Amount (inc. GST)
April 02	A1356	Received invoice from B Brown for inventory purchases	$1,100
06	B 9686	Bought goods on credit from Ruby Rose	770
13	8923	Purchased office equip. on credit from Equipwerx	1,320
18	A1421	Bought trade goods from B Brown	671
21	C00134	Received tax adjustment note from B Brown for overcharge on invoice A1356	33
26	B9888	Received a tax invoice for stock from Ruby Rose	1,100
30	060509	Purchased goods from Pretty in Pink	550

Required: Enter the transactions into the Credit Purchases Journal.

The following questions are based on the material in Chapter 11:

13. From the following information for A. Liu prepare for May 31:

(a) Cash Balance Summary for May and Bank Ledger Account for May

(b) Bank reconciliation statement. Tip: Follow the steps in the bank reconciliation process per chapter 11.5.

The reconciliation on April 30 showed that the Bank Ledger Account had a credit balance (overdraft) of $3,182.90.

The Bank Statement had reconciled to the Bank Ledger Account after allowing for: An outstanding deposit $733.10, and Unpresented cheque #324856 for $934.02

(c) Provide 3 examples that would give rise to a difference between a bank statement and the bank ledger account of a business.

The following questions are based on the material in Chapter 12:

14. Joshua Owen commenced business on 1 September, and had several special transactions during the month:

Date	Transactions
Sept 01	Owen contributed the following to the business: Premises $85,000, Cash $4,000, Mortgage on Premises $30,000 and Shop Fittings $3,000.
Sept 09	Owen gave the business a Motor Vehicle valued at $5,000 to be used for delivering goods to customers.
Sept 11	Stock costing $80 plus $8 GST was taken by Owen's children.
Sept 14	Surplus shelving, valued at $50 plus $5 GST, was taken by Owen for storing tools in his home garage.

Required: General Journal entries to record these transactions.

The following questions are based on the material in Chapter 13:

15. Please find below a Trial Balance from the ledger of E. Norman, as well as Income Statement and Balance Sheet templates per its policies and procedures:

Required: (a) Complete the worksheet.

(b) Prepare an Income Statement for year ended 30 June.

(c) Prepare a Balance Sheet at 30 June.

(d) Identify features of interim reports.

The following questions are based on the material in Chapter 14:

16. A motor vehicle was purchased on 31 March 2016 for $42,000 plus GST. It has an expected useful life of 5 years and is being depreciated using the straight-line method to a residual value of $10,000 plus GST.

Assuming balance day is 30 June:

Required:

(a) How much is depreciation each year? (Show your workings)

(b) How much is depreciation on 30 June 2016? (Show your workings)

(c) Prepare a journal entry to record depreciation on 30 June 2016.

(d) Prepare a depreciation schedule to 30 June 2018.

17. On 30 November 2015 a finishing machine was sold.

Its capital cost was $25,000 and accumulated depreciation was $13,000 at date of sale. Tip: Accumulated depreciation has been provided up to the date of sale. Thus no further depreciation is required to be recorded.

The machine was sold on credit to Jake Strong for $14,300 (including GST) with the purchaser paying a $1,000 deposit.

Balance date is 30 June 2016.

Required:

(a) Record General Journal entries to account for the sale of the finishing machine and post to the relevant ledger accounts.

(b) Transfer the profit or loss on disposal to the Profit and Loss account at 30 June.

18. Monarch Manufacturing purchased a new forklift. A check of Monarch's records revealed that an Asset Register record for the forklift vehicle had not been created. The Manager has now asked you to prepare the Asset Register record for this forklift. She has provided you with the following information regarding the forklift:

A forklift, a Toyota Hi-Lift, was purchased for $80,000 (excluding GST) on the 1 July 2016 from Queens Street Toyota.

The forklift was registered for road use with registration no. ABC-123.

The forklift was located at Monarch's Melbourne factory.

The estimated life of the forklift was set at 5 years.

Our internal asset number FORK16 was assigned to the asset.

The company accountant has instructed that straight line depreciation method will be use and estimated the residual value at the end of the effective life to be $5,000.

Due to a change in requirements, the forklift was sold on 1 January 2018 for $44,000 (excluding GST) giving a profit/loss on disposal.

Required: Prepare the Asset Register record for the forklift.

The following questions are based on the material in Chapter 15:

19. Ledger Account balances (prior to any Balance Day Adjustments) as at 30 June 2016:

Insurance	$ 2,400
Rent	1,800
Interest Income	1,400
Plant	10,000
Accumulated Depreciation - Plant	6,000
Accounts Receivable (before bad debts write off - see info. below)	5,550
Allowance for Doubtful Debts	200

Additional Information:

On 1 December 2015 a one-year insurance premium was paid, for $2,400 plus GST.

Insurance cover starts on 1 December.

Rent paid in advance $150 at 30 June 2016.

Interest earned but not received $350 at 30 June 2016.

Depreciation to be provided $1,000 at 30 June 2016.

Bad Debts to be written off $500 plus $50 GST at 30 June 2016.

Allowance for Doubtful Debts to be adjusted to 5.5% of Accounts Receivable.

Tip: In your calculation, remember to consider the bad debt amount to be written off and the existing Allowance for Doubtful Debts balance.

Required:

(a) General Journal entries for the Balance Day Adjustments.

(b) Reversing General Journal entries on 1 July 2016.

The following questions are based on the material in Chapter 16:

20. You are provided with the General Ledger with balances (in part (b) below) of E. Norman after balance day adjustments have been posted.

Required:

(a) Prepare the closing general journal entries.

(b) Post entries to the General Ledger.

(c) Post-closing Trial Balance.

The following questions are based on the material in Chapter 17:

21. You are provided with the following Trial Balance at 30 June 2019 for Maloney Co. This company uses the perpetual inventory system.

Required:

(a) Prepare a Ten Column Worksheet.

(b) Prepare the Income Statement for the year ended 30 June 2019.

(c) Prepare the Balance Sheet as at 30 June 2019.

(d) What checks have you undertaken to ensure that the Income Statement and the Balance Sheet are correct?

(e) What steps would you undertake if you believe the Income Statement or the Balance Sheet are not correct, or if the Balance Sheet does not balance?

22. The following role play video activities are required to assess your communication skills based on the material covered in this module.

General instructions:

Students must perform with at least 1 other person. Using just 1 other person to play multiple roles is completely OK. Alternatively, you can use as many other persons as there are roles.

The other person(s) can play multiple roles except for the role required to be played by the student.

There is no requirement for the other person(s) to be visible in the video, so if your partner(s) would prefer not to be visible, that's OK.

The student must be visible throughout the video.

All persons must be audible throughout the recording.

Using a camera phone is often a quick and easy way to record the video.

For these activities, you'll need to:

Read the activity instructions carefully.

Find someone to act as the customer and as the Receptionist. These characters can be played by your partner, friend, colleague, etc.

Record a video file of the role play. If in doubt, look at the tips (on the LMS) for video recording instructions.

Upload the video file of the role play at the same time as you submit your assignment document.

Please name your roleplay file with your surname followed by mod 1.1. For example, Smith Mod1.1

For the role play, we suggest the following:

Have a quiet, private space where you can effectively record the video. This could be your spare room at home, an office at your workplace, or even a study room at your local library.

Be appropriately dressed.

When you're conducting the role play, don't forget about:

Using appropriate body language and gestures, including eye contact

Speaking professionally, and at the appropriate pace

Using plain English

Listening without interrupting

Respond appropriately to what is said.

Role Play -

Roles:

This role play has three roles:

You: bookkeeper

Receptionist (at James Bond's office)

James Bond: the customer

Scenario: You are processing financial transactions to prepare reports for your client. You notice an overdue sales invoice issued to a customer, James Bond.

Organisational process dictates you must attempt to recover the debt before writing it off.

James Bond is a regular customer and has an overdue invoice from February for the amount of $1,650.

You need to ring or meet with the customer and find out why he is late in paying and when this amount will be paid.

The receptionist at James' office answers your call. You request to speak with James. The receptionist transfers your call to James.

During your conversation with James, he states that he thinks the invoice was already paid.

However, because he is uncertain, he provides you with his credit card details and agrees to allow you to take the payment if the amount was not in fact paid.

You obtain his credit card details and his authorisation to process the credit card payment.

You promise to refer the matter to the Senior Accountant to be checked.

Required Task: You will need to find a friend to role play James Bond.

You will need to video record the role play and upload the file to the LMS.

Conduct a brief telephone call with James Bond.

You must obtain his credit card details and seek his authorisation to process the credit card payment.

You will be assessed on the following:

You must first speak with the Receptionist.

You must ask at least two questions of James about the invoice in question.

You must seek James' authorisation for processing the credit card transaction.

You must tell James that the matter will be referred to the Senior Accountant.

You have greeted appropriately and spoken professionally and courteously with all parties.

Note: Your video recording should only be a couple of minutes in length.

Attachment:- Accounting and Bookkeeping Assignment File.rar