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Q1. Describe the purpose, format and components of the following financial
reports;
Cash Flow - The purpose of the cash flow statement is to show where an entities
cash is being generated (cash inflows), and where its cash is being spent (cash
outflows), over a specific period of time (usually quarterly and annually). It is
important for analysing the liquidity and long-term solvency of a company.
Cash flow statement consists of Cash flow from operating activities, cash flow from
investing activities and cash flow from finance activities.
Balance sheet
Statement of Financial Position, also known as the Balance Sheet, presents the
financial position of an entity at a given date. It is comprised of three main
components: Assets, liabilities and equity.
Income Statement, also known as Profit & Loss Account, is a report of income,
expenses and the resulting profit or loss earned during an accounting period.
The components are Revenue, Cost of Sales, other income, Distribution Cost,
expense.
Q2. Explain four (4) advanced functions of MS Excel that can be used to
analyse financial data.
1. VLOOKUP
2. Sum Function
This function is used to pull the maximum and the minimum values from the
selected set of data. To get the maximum value you have to enter ‘MAX’ in
the function tab and to get the minimum value you have to enter ‘MIN’. The
function will automatically draw the values from the primary data table.
4. IF Function
IF(Criteria,True,False value)
After the criteria are lodged in the selected column then the answers are used
to check out for the forecast to give results accordingly.
Asset: It is a resource with future economic value for individual, company or country.
Inventory: It is a finished good held by the company.
Liability: It is company’s legal financial obligation or debt that occurred during the
business operation.
Expense: It is a cost that is paid or remitted.
Owner’s equity: It is the owner’s investment in the business.
Invoice: Invoice or bill records the credit transactions related to sale or purchase.
This is prepared when a firm purchases or sells the goods on credit. At the time,
when the goods are sold by the business enterprise on credit, sales invoice is
prepared in which all details of the credit sales viz. the quantity, rate and total
amount etc. are mentioned.
Pay in Slip: This document serves the purpose of providing an evidence that on
particular date, a specific amount has been deposited in the bank. When a depositor
deposits money in the bank account, he fills up a form provided by the bank
containing the information about the date, amount to be deposited and the name of
the depositor etc.
Q5. Give examples of at least two organisational policies and procedures that
may be relevant to management of accounting systems in an organisation
Q6. What are the key benefits of double entry system of accounting data in
Australian accounting systems?
The difference between cash and accrual accounting lies in the timing of when sales
and purchases are recorded in company accounts. Cash accounting recognizes
revenue and expenses only when money changes hands, but accrual accounting
recognizes revenue when it’s earned, and expenses when they’re billed (but not
paid).
Income Statement
A firm's revenues, gains, expenses and losses are listed on the income statement.
Revenue is money earned from a company’s normal business operations. The
expenses on the income statement are the costs associated with earning the
revenue. When a company sells one of its assets, it can experience a capital gain or
loss.
Balance Sheet
The balance sheet includes the elements of the accounting equation: assets equal
liabilities plus shareholders’ equity. The assets on a balance sheet are classified as
either current or fixed assets. Current assets are the most liquid, meaning they easily
convert to cash. Fixed assets are long-termed assets. Similar to assets, liabilities are
also classified as current or long-term. Current liabilities include money owed to
creditors in less than a year.
This statement shows the changes in the shareholders’ equity account. The first line
item is the beginning balance for common stock. The amount of newly issued
common stock is added to the beginning balance to get the ending balance. The
same goes for preferred stocks. Listed next is the beginning balance to retained
earnings, which is also listed on the balance sheet.
Q10. Describe the following types of financial reports and their purpose.
Q11. Describe the purpose and different types of reconciliation including bank
charges and direct debits and credits, and explain the impact of unpresented
cheques
Bank charges
The term bank charge covers all charges and fees made by a bank to their
customers. In common parlance, the term often relates to charges in respect of
personal current accounts or checking account. These charges may take many
forms, including: monthly charges for the provision of an account.
Unpresented cheque
Q12. Briefly explain the key purpose, functions and features of the following
accounting software;
Works online
Calculate & track GST
Manage quotes, invoices, and statements
Accept payment from invoices (via PayDirect Online)
Sell items, services, or both
Track and pay expenses
Manage customers and suppliers
Bank feeds (syncs with your bank accounts and credit card)
ATO SuperStream compliance
Payroll with automatic leave calculation and real-life timesheets access for
employees
Inventory management
XERO
Xero offers a cloud-based accounting software platform for small and medium-sized
businesses. Its key features are
Bank reconciliation
Keep track of suppliers and customers
Simple dashboard
Track and organize expenses
Attach documents to your financial data
Financial reporting
Free, unlimited email support
Inventory management
Create and send invoices automatically
Mobile apps (Android, iPhone/iPad)
Multi-currency support
Payroll processing (free up to five employees)
Purchase orders
Quick and easy 1099s
Pay bills and invoices
Track and manage projects
Give out estimates and quotes
13. Describe the concept of costing, and fixed and variable costs in your own
words and understanding.
Costing is the system for the business to assign cost to the elements of their
business. It includes assigning variable cost and fixed cost.
Variable cost
It is the cost of the company which is associated with the amount of good or service
produced. The production volume affects the variable costs.
Fixed cost
It is a cost incurred to the business. The company fixed cost does not vary with the
volume of the product produced, unlike variable cost.
Goods and services tax (GST) is a broad-based tax of 10% on most goods, services
and other items sold or consumed in Australia.
The GST-registered entities reporting could be
Reference
http://www.arborinvestmentplanner.com/cash-flow-statement-analysis-purpose-
components-and-format/
https://accounting-simplified.com/financial/statements/statement-of-financial-
position.html
https://accounting-simplified.com/financial/statements/income-statement-profit-and-
loss.html
https://www.educba.com/advanced-excel-formulas-and-functions/
http://www.yourarticlelibrary.com/accounting/documents/top-8-types-of-documents-
used-in-accounting/63112