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assessor's handbook for further information if required.
Describe each of the six (6) steps of the accounting process required to record all of the
transactions that take place, and to organize and collate this information before finally
producing financial reports that are analyzed and used in decision making.
Provide a description of each of the 6 steps:
Transactions
Journals
General ledger
Trial balance
Balance day adjustments
Accounting reports
Transactions:
A transaction is an accord among a purchaser and a vendor to exchange goods, render
services or financial instruments (IFRS 09). The transactions that influence the finances of a
business should be recorded on the books and those accounting transactions should be
recorded in a different way if the company uses accrual accounting basis or cash accounting
basis .Transaction must be recognized when risk and rewards relevant to goods are also
transferred.
Journals:
A journal is a physical record or digital article kept as a book, spreadsheet or information
within accounting software.
General ledger:
it is used to species, store and sum up the transactions of entity or organization.
Examples of general ledger accounts are: assets accounts for instance, cash debtors,
inventory, reserves, land, and equipment. Liability accounts which include note payable,
creditors, accrued expenses payable, and customer deposits. Stockholders’ equity accounts
which include common stock, retained earnings, Shares, and accumulated other
comprehensive income.
Trial balance:
Trial Balances encompass all the general ledger accounts (revenue or sales and capital).
Every supposed or nominal ledger account will hold either a debit balance or a credit
balance. The Financial Statements like trading profit and loss statement, balance sheet and
other financial reports can then be formed using the ledger accounts planned on the same
balance.
Accounting reports:
Such accounting reports are corresponding to financial statements and it can be as brief or
comprehensive as we needed to issue toward the stock exchange and also towards the
board of directors. The most common accounting reports are: Income statements, Statement
of cash flows, Balance sheet, accounting reports
3) In 50 words or more, describe the difference between cash basis and accrual basis
accounting when recording transactions, producing financial reports.
The difference between cash and accrual accounting lies in the timing of when sales and
purchases are recorded in your accounts. Cash accounting records revenue and expenses only
when money change hands(means received or paid), but accrual accounting records revenue
when it’s earned even still not received, and expenses when they’re allocated as bill irrespective
of whether they are paid or not .
4)
Explain in 50 words or more the difference between the profit calculated in the trading account
compared with the profit calculated in the profit and loss account.
Trading and profit and loss account split in the following way: the trading account where you
can calculate gross profit and in the profit and loss account, where you calculate net profit (after
deducting expenses from gross profit). It is helpful for manager to know how the income is
made on the actual sales that take place before general expenses are deducted.
A shareholder or owner of entity must be aware of the following roles of the Australian Taxation
Office:
accumulating revenue
Administering the goods and services tax (GST) on behalf of the Australian states
and territories.
Administering the major portion of Australia’s superannuation system
Being guardian or withholding agent of the Australian Business Register.
The function of an audit is to confirm or verify the information presented in the financial report is
whether materially misstated or not that reflects the financial position of the company at a given
date. It also checks if the particulars regarding profits and losses are properly assessed or if
what is owned by the company is properly recorded in the balance sheet. When examining the
financial report, auditors must follow auditing standards which are set by a government body to
give opinion whether financial statements are presenting true and fair view or not.
8)
In 50 words or more, explain why it is important when monitoring budgets to make balance-day
adjustments at the close of an accounting period, before preparing financial statements.
9)
Give at least three (3) reasons why work teams need access to budgets and financial plans and
in 50 words or less, outline the ways financial information can be shared effectively with
relevant stakeholders.
10)
Identify at least five (5) signs that team members are under-performing and may need support in
their role to manage finances for the organization.
You as a manager may cope with bad performance of subordinate personnel and identify
poor performance at their work It can emerged because of
Lack of scrutinization, therefore employees can show poor discipline.
Cope with staff’s poor approach owed to employees believe related their lack
acknowledgment as a part of the firm.
At workplaces through observe their tasks. Monitoring also helps to identify if
there is a lack of skills in your personnel. Additionally,
If the assigned task are not completed within the given time period regardless of
of complete attendance
Importance of inducement at work in order to avoid indolence or low
enthusiasm of the employees.
11)
In 50 words or more, describe the process of monitoring actual expenditure, variance and costs
controls to avoid budget over runs.
In a regulation to avoid budget over runs you should check the costs with relevant
order that you can obtain from account balances. For a case in point, if you desire to
assess the direct as well as indirect labor costs, you must have to come across into
ledger account balances for the period you want to examine. Category of foundation
data include: Bank reconciliation statement, revenue, Tax invoices, Depreciation as well
as amortization, GST calculations and any credits, Wages/salaries books (including
PAYG, superannuation, etc.), Petty cash receipts and Balances, Job estimate,
Inventory, resources, finished goods records and all other relevant accounts based on
estimation of accountants along with opportunity costs
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12)
In 50 words or less for each, provide a description for the following types of resource data
commonly used by the work team for managing budgets and financial plans.
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GST calculations and If you are to allege GST for your industry, you will necessitate
any credits exercising the income tax invoices in array to argue any GST you have
remunerated on any purchases for the business. A comprehensive
system of proceedings must be reserved in order to claim GST paid
alongside GST collected.
Wages/salaries books
(including PAYG, Information concerning wage expenses should be front warded to
superannuation, etc.) relevant subdivision. Reports on account balances may be produce
from software secretarial systems.
In order to value your yield to cover your costs, you should attempt out
where the most important costs are. Keep in mind that job costing may
Job costing be accessed from budgeted financial statement reports or from the
personnel to blame for particular job castings.
13)
Using 50 words or less, outline the process of analyzing and documenting resource data, and
making recommendations for improvement.
To examine the troubles of a organization you should make bigger the following
steps:
prioritizing analysis
analyzing cost and expenditure variances
examine income variances with actual incomes
Explore problems relating to the budgetary control system itself.
To situate into maneuver your commendation or solutions you need
stakeholders to be persuaded using reports or other media to bear out them.
14)
Outline at least four (4) advantages of using software programs or electronic spreadsheets
when monitoring and analyzing budgets.
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Accounting Software can simple the process of accounting and turn the equipped
process into supplementary well-organized one. The advantage of using software is
the economy of time and
Without human intervention making the reports in a more rapidly way by just
putting journal entries in the software to monitor the company performance
relevant to its expenses and incomes to take decisions on time. in addition,
positive reception to electronic worksheet you can set up cross checks that
make sure everything “adds up”.
You can also deal out in an easy way your goods or get inputs smoothly.
15)
In 50 words or more, explain how planning, implementation and modifying contingency plans is
used to control financial risks for a business.
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Organization must have contingency plans regarding the reduction or elimination of the
risks of cash flow in risk management process. for implementation of such contingency
plans, there should be implementation plans and detailed action strategy along with its
accountability
This process of implementation needs continuous monitoring activities to ensure the
smooth implementation of such a contingency plans which requires to be monitored on
the regularly basis to permit the time to take corrective actions if necessary to ensure
the plan’s success. In addition, you will need to consider beforehand what corrective
actions may need to be taken if there are completion issues of some possible
implementation.
16)
In 50 words or less, outline the advantages of regular reporting of budgets and financial plans.
For facilitating the monitoring of budget and financial plans, the data regarding inspecting
is extracted from
Bank Reconciliation statements
Records of the petty cash by surprise visit.
Ledgers, journals and trail balance
List of invoices and reports
Spread sheet-Based reports
Statement of change in equity and Statement of financial position and.
The advantage of management reports(that is produced for internal purpose) with the
relevant data is make optimum decision making regarding the allocation of the natural
resources under constraints like production managers utilize the sales budgets to see the
performance of the inventory buffer stock and production level.
Standardization of reports is very important, It is important to follow organizational
requirements for preparing reports.
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17) In 50 words or less describe the budgeting process of analyzing and managing cash flow.
A Cash flow analysis is much important to ensure that how business is managing its
cash that will allow the business in managing the operating(daily expenditures),
financing (issuance or repayment of loans or shares) and investing
activities( purchase and sale proceeds of fixed assets, long term investments).The
information presented on the statement of financial position is reflection of the
company performance regarding its objective function.
Completing a ratio analysis will determine:
Debtor turn over days (a time lag regarding the credit sale and collection of
debts)
Creditors turn over days (a time lag regarding the credit purchase and
settlement of debts)
Inventory turnover days (a time lag for converting stock into cash)
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TASK 3: Project Portfolio of Financial Information
Table of Contents
Budget Report 13
Briefing: Retail Outlet Managers 15
Briefing: Sales Staff 16
Short Report 17
Blog Post 19
Staff email 22
Plan: Monitoring revenue and expenditure 17
Proposal submission: Board of Directors 28
Executive briefing 29
Revised Budgeting and Financial Planning Procedures 31
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Budget Report:
In the following graph we can see how the plan of the company is going to be developed. According to
the target of increasing income in 15%, the estimated expenditure would be 15% higher and the profits
are going to increase in the same magnitude. The figures illustrated in the bar graph shows how the
income is generating how the income will increase from 150.000,000 to 262.350,937, as consequence
expenditures will go up from 127.500,000 to 222.998, 297. Therefore, profits will rise from 22.500,000
to 39.352,640, all figures in Australian dollars.
A contingency plan always take into consideration of occurrence of negative events like theft, natural
disaster (Fire, Earthquakes) or spread of any viral diseases in future events like in 2020,employees
have to work remotely therefore they need an informational technology assets and infrastructures
which led to the implementation of enhanced safety actions for employees and clientele to prevent the
extend of the virus.
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300.000.000
250.000.000
200.000.000
150.000.000
100.000.000
50.000.000
0
2018-19 2019-20 2020-21 2021-22 2022-23
IncomeExpenditureProfitReinvest
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Briefing: Retail Outlet Managers:
Retail outlets mangers must be an effective as well as efficient store managers to have great leadership skills,
strong team selection to cope with the competition of its competitors to raise the goodwill of its organization
and must have data driven mentality. The best managers is that having capabilities o empower and take into
consideration of their staff protective roles and responsibilities to make their superiors confident that they are
doing well at their jobs.
1. These retail outlets managers must have following qualities to do their best
2. Decision making to achieve optimum results despite of scarce resources
3. Must have ability to do multi tasks
4. Having leadership qualities
5. Having passionate as well as motivational to motivate their staff during crises
6. Business development as well as goodwill generation.
7. Effective communication skills
In order to budgeting and elaboration of the financial plan properly, it is important to distinguish between broth
top-down and bottom-up styles of management.
Top-down is a way to rule from the top(strategic level) to the bottom(operational level). In this approach of
management communication hierarchy, the employees do not in shape into place the amplification of the plan,
therefore their suggestion and ideas are debarred. The General Manager is one who rule the company,
therefore he or she is responsible to elaborate the plan and take decisions about the company´s course and
instructions.
The perks of top-down approach make it widely utilized across many industries. One of this benefits is that the
risk decreases because the highest level of management is also usually the most informed and most
knowledgeable about the business. Another advantage is the strong organization owed to the fact that upper
organization in a company will be able to conclude best practice and reach goal easier with decision created and
obligatory at the upmost ranks of a business.
On the other hand, bottom-up approach also has many advantages. One of them is the increase in the
announcement within the company given that every employee actively involves yourself in the directorial
process. Furthermore, all members of the business community will feel included and valued, which fosters a
loyal and outgoing environment.
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Briefing: Sales Staff
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Short Report
Managing the budgeting process
The team goals are important and must be assessed and prioritized according to organizational financial
planning and budgets. The role of a manager is varied and as a person in change should consult with his or her
team to set individual and team targets and delegate duties.
The task of a manager is to set goals and control the process to achieve them. In that purpose the budgeting
process takes place and follows this steps:
1. Access data and prepare budget
2. Review budget
3. Post and report results
4. Monitor progress
5. Define budget objectives
6. Access historical and actual data
7. Develop a base budget
The cycle is repetitive and starts again. In that process the manager role can be break out as follows:
1. Planning
2. Organizing
3. Staffing
4. Leading
5. Monitoring
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Managing cash flow:
Cash flow is necessary for future investments, so the manager has to be sure that the internal cash flow is
working properly. It is necessary to follow the points below:
all cash is banked on the day of receipt or as soon as possible
all cash received is deposited into the organization’s bank account
no cash payments should be made from cash received
All receipts are documented.
On the other hand, monitoring cash flow entails the following activities:
collection of cash from all debtors
payment of bills relevant to expenditures
petty cash control by surprise visit
signatories on bank accounts by authorized person
Reimbursements of all expenditures.
Three fundamental control processes employed by most organizations are:
1. paperwork – paperwork with complete details must be provided as evidence of any receipt or payment
of cash
2. Secondary control – receipt of cash will have a secondary monitoring system like a cash register or a
second person.
3. Proper authority – all payments must be authorized by the person responsible for the department or
cost center.
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Interpreting profit and loss statements, Income statement
A company can modify the price of its products or services but it has to bear in mind the prices in the market
and overall the prices charged by its competitors. On the other hand, the manager of the company should know
the cost structure in order to do the required adjustments to improve the efficiency and competitiveness. In
other words, knowing the cost structure can allow the reduction or elimination of unnecessary costs. For this
purpose, the CVP (model of cost accounting) can be employed to make costing scenarios and take decisions in
that respect. It is remarkable that it will help the profit-making process, bearing in mind the equation below.
Total Revenue – Cost of Goods Sold = Gross Profit.
If for instance the cost of goods sold is reduced, then the gross profit increases. In other words, the reduction of
cost of goods sold reflects the increase in efficiency. This is also referred as the operating margin or gross
margin. Keep in mind that it is a key metric to benchmark against your industry.
However, it also important to calculate the Net Income, which takes into account expenses such as expenses,
related to bank-services and tax expenses deductions from Gross Profit.
Blog Post
This is a blog where you will find information related to accounting that is necessary for employees to
understand how a company works from an accounting point of view.
Cost accounting
The costs of production in a company is a very important factor that affects efficiency, therefore it is relevant to
know about how the costs can be analyses.
There are two types of costs: direct costs and indirect costs.
1. Direct Cost: Those costs incurred by a company which can be directly attributed to units of production.
For example, raw material that is used to product each unit of output. The latter, referred to
2. Indirect Cost are those costs incurred by the firm, but which cannot be attributed directly to a unit of
production. For example, rent is a cost but it is not related to the production of each unit of output. as
overheads,
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The difference between income, expenses, assets, liabilities and equity
A company has income and expenses during its commercial activity in the market. On the one hand, income is a
flow of resources that a company gets thanks to the sale of a good or service that customers want pay for. It is
the result of offering good times the price per unit. On the other hand, expenses are the resources used to
produce a good or a service. Examples of expenses can be wages paid to employees, raw material expenses,
rent, taxes, and the like.
A company also has assets, that entail all the productive or useful things that a company owns, for instance,
properties, machinery and equipment, facilities, and the like. Keep in mind that all those things that confirm the
assets of a company mean valuable things regarding liabilities and equity.
The first one means the amount of money the company has to pay in a certain moment, in other words, the
company is legally accountable about that money that own from others. On the other hand, equity means the
net worth of company.
Capital(Equity)=Total assets –Total Liabilities
The concept of a double entry financial system where every credit has a matching debit
In the double-entry accounting system, transactions are recorded in terms of debits and credits. Since a
debit in one account offsets a credit in another, the sum of all debits must equal the sum of all credits. The
double- entry system standardizes the accounting process and it is a input to improve the financial statements.
Accounting is a way of measuring, recording and communicating the financial information of a company. There
are seven different types of accounts, namely:
Assets
Liabilities
Equities
Revenue
Expenses
Gains
Losses
Those accounts are categorized into debits and credits entries. Both entries must be equal on sides, therefore
debits and credits for a transaction must be equal. For instance, doing credit decreases asset accounts but
increases liability and equity accounts, which supports the general accounting equation
Assets = Liabilities + Equity.
On the income statement, debits increase the balances in expense and loss accounts, while credits decrease
their balances. Debits decrease revenue and gains account balances, while credits increase their balances.
Petty cash:
Companies should have to pay a comparative small amount of money in cash to their employee in order to be
used for unexpected expenditures for items that can be needed at any time but are unexpected in the
operations of the company. For example, van wash, paid for fuel, paid for stationary expenses, a mop, among
others. these petty cash are inspected on surprise basis .
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Accrual accounting:
Accrual accounting is the conflicting of cash accounting, which record the transactions when there is delivery of
goods between two parties or services are rendered irrespective of any consideration is received or not. Accrual
accounting is almost always required for companies that carry inventory or make sales on credit.
When a company provides a service or a good to any customer, it is recorded in the accrual accounting
regardless the impediment of the payment, because this way of accounting takes it for granted that the
company will receive the cash at some point in the future because the services have been provided.
On the same time, the expenses are recorded when they are incurred irrespective of their payment under
accrual basis . A company that incurs an expense that it has yet to pay for will recognize the business expense on
operating basis arises.
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Staff emails:
Dear staff
The following is in sequence that is useful to be acquainted with in order to keep away
from material misstatements with the ATO requirements and to notify you about pertinent
information related to the following
topics:
Australian Taxation Office requirements for assessing revenue GST collection, payment and
reconciliation
Audit and record‐keeping requirements for financial records Pay as you go (PAYG) tax(like
withholding tax on hybrid Approach.)
As a big business most of the revenue is computable, so it is significant to assess the income of
the business. You must work out all gross profit before tax, and calculate all other incomes from
the business of the entity that is not included in the operating activities of business, together
with amendments in the value of trading stock like financial instruments, capital gains, isolated
transactions intended to make a profit, and cash prizes for your business or opportunity costs as
well as bad debts recovered during the intended period.
As a GST-registered business, the company requirements to provide tax invoices to its clients at
the time of sale as a withholding agent, collect GST and send it to ATO with your business
activity statement (BAS) by using business accounting software to produce tax invoices and
automatically produce information of your GST payables through information technology
software usage and credits at BAS time.
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6. withholding, superannuation and fringe benefits provided)
7. records of payments withheld from suppliers who do not quote an Australian business number
(ABN)
8. banking records (for example, bank statements, deposit books, cheque books, bank
reconciliation)
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9) Funding documentation (for example, when financial support will be received,
when acquittal need to be made, application time limit)
10) Registration, certificates and accompanying credentials to regulator (for
example, ATO, Australian charities and not-for-profits commission, and state
regulators)
11) Contracts and agreement (for example, cleaning, continuation and insurance
contracts, finance or lease agreements(ifrs16))
12) Copies of review of prerogative to tax allowance
13)Account to help practice tax statements and returns.
PAY AS YOU GO RECORDS
The information that the records of the business have to show is the amounts the
company withheld from payments to employees and directors such as:
Salary, wages, commissions, bonuses and allowances paid to employees
Remuneration to company directors
Retirement payments, termination of employment payments, annuities
and benefit or compensation payments
I hope it was helpful to introduce you to the ATO requirements.
Best regards,
Andrea Paulina
Finance Manager
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Plan: Monitoring revenue and expenditure
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Proposal submission: Board of Directors
The plan of managers is to focus on the most important as well as significant expenses and revenue(or
sales) on monthly or quarterly basis expenses because this is varying the plan in the budget. on the
other hand, for minor expenses, it is more capable examine annual basis as a substitute of doing it
each three months because it is not properly to focus on many items for trivial expenses(like meals and
entertainment ,travelling expenses) given the scarce time to managers, therefore it is convenient to
focus on major variances resulted from the difference from actual as well as budgeted as an alternative
of minor variances. Here below you can find reproduce example to show the variances for different
expenditure and revenue collection.
Mock-up examples:
Minor expense variances:
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Executive briefing
The department managers rarely have their Diminish superfluous tasks in each
preliminary budget projections submitted to department in order to make certain sector
the Budget Committee on time. managers to have their introduction budget
Consequently, the Budget Committee forecasting submitted on moment in time.
usually has to delay its review of all of the money department shares the worksheets on
subsidiary budgets by about two weeks. time in order to department managers do
their work on time to keep away from delays.
Training low- performance managers to keep
them more efficient.
Example: statement style departments, or
paper work (too a large amount paper to fill),
accounting software to knob the data.
The two-week delay puts enormous Give more prepared resources(like expert of
pressure on the finance department as the accounts, accounting software, material
production of the master budget overlaps )if it is needed in arrange to Finance
with other scheduled finance department Department does its household tasks
tasks such as GST activity reporting, payroll properly otherwise each department must
preparation and asset register updates. have to do their respective tasks.
Precedence to master budget to assure he
avoidance of discrepancies of different
outcomes as compared to projected results
The finance staff feel that the budget cycle Find more competent ways to position or
should commence two weeks earlier, but if organize the stocks in order to save time and
this were implemented it would clash with slash the time required for stocktaking.
the stocktake period in the retail outlets. The efficient ways are being in employment
by association looking to have superior the
stock managing control by.
Just-in-time Inventory
Seller Managed Inventory and Customer
Managed Inventory
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The budget consolidation is performed Stakeholders or Board of directors must
manually by entering information from hard have to investments to update the
copy forms into a database. It would require accounting system as well as do the
a major financial systems upgrade to management so efficient along with the
provide department managers with the competency (software) and strictly assist the
ability to enter this information directly. staff in order to get better their skills and
You do some research and find that if the faucet the new system.
department managers entered their forecast
budget data into a standard spreadsheet
template, it would then be relatively simple
to export data from this format into the
financial system for budget consolidation.
This approach would require resources for
setting up the
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spreadsheet templates and training department managers in using the spreadsheet templates.
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Task 4: Observation – Assessment Grade
Your assessor will record the result of your observation assessment in this section according to your
performance of the following assessment criteria. This grade will contribute to your overall assessment
outcome.
1. Presenting information on budgets and financial issues in line with BizOps policies and
procedures
a. matching a communication style to suit the meeting environment and budget committee
members
b. speaking in different vocal registers and tone
2. Clarifying budget information with Managing Director of financial operations and budget
committee members
5. Negotiating changes to budget and financial plans with Mike Booth, Managing Director
of financial operations and budget committee members
c. working with other committee members and the director to reach an agreeable solution
Date of assessment:
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The observation assessment has been graded:
Satisfactory ☐
Not satisfactory ☐
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