Prepare Financial Report For Corporte Entities Assessment 1 Essay Example

Financial statement

  1. What are a BAS and IAS?

BAS is the business activity statement and it is used for businesses registered for GST and GST monthly or quarterly. It is also important for PAYG income tax, withholding tax and fringe benefits tax. It is d being issued by ATO either quarterly or monthly. It is a form needs to be lodged with the ATO and the payment made to the ATO by the due dates as follows: First for the BASs monthly within 21 days of the end month on the form and for the quarterly BASs is also being issued within 21 days of the end of the quarter.

IAS on the other hand is the instalment activity statement which is issued and used for all the above activity items except for the GST tax. Both IASs and BASs can be useful in managing business finance due to the fact that you need to track your income and expenses to help in calculating GST and other liabilities on your BAS.

  1. What is the general ledger?

Ledger can be described as a record boo for a chronological transaction data from the journal and preparing them by an accountant. It helps in providing current balances in every accounting system throughout the accounting period. General ledger therefore, can be describes as the double entry bookkeeping method which is used to record double entry concept in accounting. All postings in ledgers are listed in general ledger which is then transferred into trial balance.

  1. Describe the place of ethical principles, behaviours and codes in the financial services industry.

The codes and ethical principle exist in the financial industry and the role of codes of conduct is to help in establishing best practices and standards for the meeting the requirements of the law. The role of ethical behaviour also is to help protect consumers in the market. The industry based code of behaviour in financial service industry help in delivering quality services and standardized services to the people. They help in regulating the behaviour of players in the market. For instance, banking sector, it help in ensuring full disclosure of fees and other costs incurred by customers. Code of ethics sets out elements like integrity, accountability, transparency among other rules which should govern the industry.

  1. There are several ways organisations maintain financial records. They include manual systems (hard copy) and computer-based (electronic) systems. How do computer and manual systems operate? 150 180 words.

The manual accounting system involve recording accounting transactions using hard copy books but following the same systems of debiting and crediting of the transactions. Computerized accounting system on the other hand uses computer based software’s and systems to help in keeping the accounting records. They are stored in soft copy and in most cases they can be generated and be stored in hard copy. They have backup system and the transaction is online based meaning the main accountant is able to access all the transactions at the same time. Using computerized based system, there is point of entry where the transaction are entered and the rest of recording takes place automatically.

  1. Describe (150–180 words) the information which will be contained in typical financial reports.

The financial reports contains four major components. First, it contain comprehensive income statement which is the information on revenue and cost of revenue normally known as cost of goods sold. It provides information on the company overhead expenses and the net profit or loss the company has realized at the end of financial period. The second component of the report is comprehensive financial position statement of the company which contains the net assets of the company, liabilities of the company, the capital of the company and the total equity of the company. The third component is the cash flow statement of the company which contains cash in and cash out. The last component the statement of change on the shareholders equity of the company. The report also have the accounting principles used in the preparation of financial statements.

  1. Describe the following

  1. Budgets: It is a financial statement that shows the estimate of income and expenditure of a given period

  2. Cash flows: Cash flow statements is one of the financial statements which shows how the money flows in and out of the business.

  3. General ledgers: Records all the transactions from the other accounts ledger and ready for trial balance posting

  4. Profit and loss statements: This is a financial statements which indicates the company revenue, expenses and the difference which can either be profit or loss. It is one of the final books of account.

  1. What are the main reports generated using the information on the balance sheet?

  • Reports include:-

  • Asset report

  • Liability reports

  • Owner’s Equity Report

  • Depreciation report

  1. How can a report be used to explain a situation to the reader?

Reports can be used to calculate the company profitability, trend analysis which can be very useful to the end users. By calculating these ratios, the end user is able to understand the activities which is going on in the business, situational analysis among other analysis which can help the end user to understand the business in a more detailed manner.

  1. What will determine how often you generate reports?

The frequency of producing the reports is determined by nature of the company and the need for use for that particular reports. For instance, law requires that public companies must produce annual reports for tax purposes and audit purposes. The management may also require weekly reports to help in establishing the long term and short term objectives of the company.

  1. What is double entry bookkeeping?

Double entry concept in accounting is where for each and every debit entry there must be a corresponding and similar credit entry hence double entry concept.

  1. What would influence your decision to use cash accounting or accrual accounting? 80–100 words.

The business specifics will dictates that type of accounting method to be used in a business as there are business which will require accrual basis of accounting while others will require cash basis of accounting hence the decision of which type lies which each business specifics and law.

  1. What are the possible consequences of taxpayers failing to correctly report an amount they are required to pay or meet other tax obligations?

This can result into over or double taxation or under taxation depending with each situation. Another consequence of inaccurate tax declaration is closure of the business as this amount to violation of accounting principles and country. It might also lead to hefty fines