Semester: Essay Example

Table of Content

University/College:

Semester:

ACTIVITY 1

  1. What are the differences between data and knowledge?

  • Data is the unprocessed data which can be structured and unstructured while knowledge is an understanding of the information and can be inform of reports.

  • Data can be a measure of a fact while knowledge is the interpretation and understanding of that measure.

  • Data is raw materials of knowledge while knowledge is a result of information.

  • Data can be meaningless while knowledge is meaningful[ CITATION edu06 l 1033 ]

2). What do information systems capture and why are they important?

Information systems are used to capture the internal data from the organization and the external data from the environment.

Importance

  • Communication: The information systems gather information and distribute it to various sections in the organization, enabling managers to effectively communicate.

  • Operations: Information systems provides both the past, current and future information for the organization thus helping in ensuring that the company operations are in order.

  • Making decisions: Information systems can deliver to you all the information that you need in models and this will enable one in making decisions.

  • Storage of records: Information systems have data bases that help in the storage of the company information for future use.

3). Using these variables create a coding system that could be used to input data.

Variable

Month Of Birth

Marital Status

Annual Income

Highest Academic qualification

4). Describe a process that could be used for collating, coding, and classifying accounts data in preparation for processing

Collating: Under this part sometimes the data that is gathered from the field through the use of questionnaires may lack uniformity thus requiring some modifications that will help in removing errors and making the data relevant and appropriate for the study and care should be taken more especially when editing the open –ended questions.

Coding: This the act of translating the answers of the questionnaires into numeric or assigning some numeric code to the variable collected from the field making it ready for data analysis. This can be done by the use of either code book, code sheet or computer card. For qualitative methods manual processing is used while in quantitative sampling applies[ CITATION Gai13 l 1033 ].

Classification: In classification one can use the various distributions in grouping or classify data basing on the frequency distribution, percentage distribution, cumulative distribution and statistical distribution[ CITATION Mel07 l 1033 ].

ACTIVITY 2

  1. Why might it be necessary to consolidate and/or convert financial data to allow it to be analysed in accordance with organisational requirements?

  • Simplification: Consolidation software helps in easy update of transactions that affect the parent company, subsidiary, joint venture and associate company in real-time thus making the maintenance of accounting records simple.

  • Reducing paperwork: Consolidation helps in reducing the huge paperwork since all the relevant investments of the parent company are put together.

  • Complete overview: Consolidation enables the users of the financial statements to be able to view the parent company at a glance in order to see how health it is in its industry of operation ranging from profitability, efficiency and debt levels[ CITATION Pan15 l 1033 ].

2. Explain (50–100 words) how data might be consolidated or converted to allow it to be analysed.

This will entail the importation of financial data from the various sources, mapping the general ledgers relating to all businesses owned by the group company for purposes of coming up with the chart of accounts and then closing the relevant accounts so as to come up with the consolidated financial statement of the company[ CITATION Pan15 l 1033 ].

ACTIVITY 3

1.).What are the advantages of using a computerised system for recording financial data?

    • Accuracy: Computerized systems are known for high levels accuracy with minimal errors that will hinder the proper computation and analysis of data.

    • Speed: Computerized systems helps in speedy input and computation of data that has been recorded because it’s automated will high computation speeds.

    • Security: The computerized systems have high security control systems which help in controlling the entry of data to ensure complete entry of data in their respective fields.

    • Cost-effective: This system is cost effective since it reduce the bulky work load of manual entry, computation and output of data that will require huge labour costs.

    • Data access: A computerized systems helps in storage of recorded data and can be accessed by very many people who are linked to the system.

    3.)Demonstrate the procedures that should be followed to record financial data in a computerised system. You will need to negotiate a time and place for the demonstration with your assessor

    • Collect any relevant paper work relating to the business transaction that you are just about to record.

    • Create different accounts are appropriate for each transaction in the system

    • Decide which account is to be debited or credited depending on the kind of transaction that one is handling.

    • Check the journal entry in the system to be sure whether everything has been successful debited or credited in the appropriate account with the right amount since in a computerised accounting system the ledger is closed and balanced by the system[ CITATION Chi l 1033 ].

    ACTIVITY 4

    1.)Use the retail inventory method to calculate the value of ending inventory for an organisation

    RETAIL INVENTORY METHOD

    Opening inventory

    $ 850,000.00

    $ 2,100,000.00

    Purchases

    $ 650,000.00

    $ 1,000,000.00

    Cost of goods sold

    $ 1,500,000.00

    $ 3,100,000.00

    $ (2,650,000.00)

    $ 450,000.00

    Closing inventory

    $ 196,875.00

    cost to retail ratio

    2.)Using the diminishing value method and the prime cost method, detail the cost each year to be allocated for reporting purposes and show the book value during each year

    Depreciation

    Diminishing

    Prime cost

    Book value

    Book value

    Purchases

    10038.33

    0

    Assume the depreciation rate to be

    Prime cost deprecation method

    3.)On the 1st of July 2012 an organisation purchased a vehicle for company use. The price was $60,000 and has a useful life of six years. It was depreciated using the straight line method and the vehicle was traded in for its book value on the 30th of June 2016. Complete the calculations and provide the details in this table

    Ledger Account

    Accumulated depreciation

    Book value

    1st July 2012

    30-Jun-13

    Depreciation

    1st July 2013

    30-Jun-14

    Depreciation

    1st July 2014

    30-Jun-15

    Depreciation

    1st July 2015

    30-Jun-16

    Depreciation

    1st July 2016

    1st July 2016

    vehicle-trade in

    Useful life

    Depreciation per year

    ACTIVITY 5

    1.) How will you ensure that sufficient and current records are maintained to comply with lodgement requirements?

    The company should establish and maintain a process for managing business tax returns byadopting an accounting system for taxation, keeping adequate records to supporting the taxation accounting system and complying with the specific taxation requirements of the business[ CITATION Chi l 1033 ].

    Maintaining the accounting records for taxation purposes by using the adopted accounting system to manage taxation lodgement process and using the sufficient and current records maintained in the system as a compliment with lodgement requirements to establish lodgement schedule requirements.

    Processing of the business tax returns and lodgements by identifying the required returns and lodgements, processing accounting data to comply with the lodgement requirements and then reviewing the returns and lodgements for authorization[ CITATION Ali16 l 1033 ].

    2).In short sentence explain where a business will obtain the lodgement dates for the up-coming fiscal year.

    One can phone Australian Taxation Office on 1800 815 886 between 8.00am and 6.00pm, Monday to Friday to get the lodgement dates for the up-coming fiscal year.

    3.)A business purchases 10 digital televisions for use in its offices. When the televisions arrive at the workplace the owner of the business decides that one will be taken home. The total cost of the acquisition was $16,500 (GST inclusive).

    I will first identify the GST rate of 10% that applies to all supplies made to any business. Since the price quoted is for the 10 television I will have to find the GST inclusive of the one television that was taken home by dividing the total cost by 10. I will then find the 10% of the GST inclusive cost of one television in order to determine the amount of credit in put that he is entitled to claim from the Australian Tax Office.

    Number of Televisions=10

    Credit claim=16500/10(10%/110%) =$150

    4).how you would process this to comply with taxation reporting requirements. How much input tax credit could be claimed and why?

    The television that was taken home for personal use will be exempted from GST as per the taxation rules on the returns and lodgement set by the Australian Tax office[ CITATION Chi l 1033 ].

    5.)How will a business determine the correct lodgement requirements for its particular circumstances?

    Number of Televisions=10

    Credit claim=16500/10(10%/110%) =$150

    6.)Why is it necessary to establish an accounting system to manage the taxation lodgement process?

    • Storage and retrieval: Accounting systems are equipped with large data bases that can keep large volumes of information for future retrieval.

    • Accuracy: Accounting systems are known to be error free thus will help in ensuring accuracy in the financial reports of the organisation.

    • Up to date information: Accounting systems keep up to date financial records of an organization unlike the manual accounting

    • Quality reports:Due to accuracy and up to date advantage, the accounting systems produce quality reports.

    • Real-time user interface: These systems can allow different users such as managers to access the financial records in real time for easy communications.

    • Reliability: This system is reliable since it’s operates at a very high speed and can be used in carrying out accounting activities for a long time[ CITATION Cha08 l 1033 ].

    Activity 6

    1.)Why is it necessary for organisations to collect, index, file and maintain accurate financial records?

    1. It helps in ensuring that there is accuracy in the financial reports of the organization.

    2. It helps in easy and systematic storage and retrieval of data for future use.

    3. It highly contributes to the preparation of quality financial reports of the organization.

    4. It’s a requirement that organizations must index, file and maintain accurate financial records and thus they have to comply.

    2)Undertake your own research to collect three pieces of financial data. Each piece of data must come from a different source. Submit a copy of the data and your comments in response to these activities to your trainer/ assessor.

    A). Summarise

    • Bank statement: This will contain the payments and receipts that were made by the use of banks in form of checks and loans

    • Cashbook: This will contain all cash transactions.

    • Sales day book: This will give us the full lists and total of sales made by the business.

    B.) Evaluate the usefulness of the data to those who might be required to provide a report on financial activity

    Bank statement will help in the determination of the bank balance which is current asset in the balance sheet and at the same time this statement will help in the identification of the expenses and other incomes of the company in that particular financial period for use in the income statement preparation.

    Cashbook will help in the determination of the bank statement and reconciliation of the bank and cash balances which are used in the preparation of the balance sheet[ CITATION Pan15 l 1033 ].

    Sales day book will be used in the determination of the total sales that the company was able to make in a given financial period and are used in the preparation of the income statement[ CITATION Lea10 l 1033 ].

    C.) Describe how you could index the data to ensure it can be quickly located and referred to later. Be specific.

    The income statement data sources will start with a 1.0 index meaning that the sales day book will take the index of 1.1 meaning that sales will the first sub item of the income statement items. The bank and cash book will be balance sheet sources of items and the balance sheet will take index2.0 meaning the bank and cash being current assets they will be 2.1.2. Which is the index of current assets. The bank statement then be index 2.1.2.1 while the cash book will take index 2.1.2.2 which is the immediate follower of bank statement[ CITATION edu06 l 1033 ].

    3.)How can accurate coding help an organisation to ensure consistency and quality in financial analysis? Discuss

    Accurate coding promotes high efficiency and effectiveness levels in an organizations since the errors associated to data are minimized in order to avoid affecting the outcome of the data analysis and interpretation. At the same time accurate coding contributes to propers and systematic storage and retrieval of data and information in any given organization since things are in order. There is also accuracy in accuracy in data analysis and data interpretation that is brought about by the accurate coding and at the end it results in the making of better decisions of the organization in relation to the data analysis[ CITATION Chi l 1033 ].

    4)You have been asked to provide an accurate and up-to-date profit and loss report on work in process for a particular job. What data might you draw on, what reports might you need to access and how would you ensure that the information you provide is error free and comprehensive?

    I would like to have the end year trial balance report, cashbook statement, previous year income statement and other contingent items report from the management. I will ensure that the information is correct by preparing the suspense account if the trial balance is not correct and at the same time go through all accounting entries to verify whether they were correctly posted as per the generally accepted accounting principles. I will also confirm whether there is accurate computation of expenses and incomes and also check the completeness in the recording of the relevant transactions associated to the company[ CITATION Cha08 l 1033 ].

    Activity 7

    1.) Why is it important to report actual income and expenditure figures against budget figures at regular intervals?

    It helps in monitoring the budgeted income and expenditure so as to see whether they follow the budget and cash flow projections of the organisation.

    • It helps in identification of ways in which the budget performance of the organisation or project investment can be improved for better budget results.

    • It’s important in controlling the expenditure of the organization or project investment so that are disbursements are done according to the set rules and the budget.

    • It helps in the preparation and presentation of income and expenditure reports in relation to the budgets.

    • It helps in keeping the key personnel of the budget updated on the status of the budget of the organization.

    2.)Complete the table using the figures provided for the three products: A, B and C.

    Gross Profit Budget ($)

    Gross profit actual ($)

    Variance

    3.)Explain each variance calculated in question 2

    Product A has a favorable variance of $675 meaning that it made a higher actual gross profit than it was budgeted. Product B had a favorable variance of $2500 which means that the budgeted gross profit was higher than the actual gross profit and this is an advantage to the company. Product C had an adverse variance on the gross profit since the actual profit was lower than the budgeted profit .The total gross profit variance of the company was $1175 which is more advantageous to the company since the actual gross profit exceeds the budgeted gross profit.

    4.)Explain why reports must be made to:

    1. Management: The management needs the financial reports for purposes of assessing their performance generally in order to be able to make sound managerial decisions that will see the company improve its sales and profits as much as wealth creation[ CITATION Lea10 l 1033 ].

    2. Investors: The investors need the company reports in order to be able to see the efficiency of the management in managing the wealth of the shareholders, they want to know the profitability of the company, the solvency of the company and also to look at the debt levels of the company in order to see whether they will be able to control a large share of the company[ CITATION Lea10 l 1033 ].

    3. Creditors: The creditors that do business with the company are interested in the reports in order to be able to see the liquidity of the company so that they can know whether the company will be able to meet its obligations fully when they fall due, they also need to know the profitability of the company in order to be able to know whether the company will be able to cater for its expenses[ CITATION Pan15 l 1033 ].

    4. The government: The government needs the reports so as to know whether the company is operating legitimate business and it complying with the government regulations such as the filling of tax returns and complying to the company Act requirements[ CITATION Lea10 l 1033 ].

    5.)What is the importance of collecting, maintaining and providing accurate financial/ resource allocation records and reports?

    It is important because adequate and accurate records and reports helps in the making of sound decisions that are for the betterment of the company operations and growth.

    1. It helps in the storage of the relevant information that can be used for future references relating to the company.

    2. It helps in attracting new investors to the company since they can easily access the records and reports of the company and be convinced to invest their money in the company[ CITATION Pan15 l 1033 ].

    3. It helps in proper keeping of the records of the company for easy future coordination and operations.

    Activity 8

    1.)How will a business determine the correct establishment of lodgement schedules?

    Need for the lodgement schedule is identified and then now the decision for establishment of a lodgement schedule is made.Gathering and analysis of taxation related data is identified and collected from the accounting reports for use in the lodgment schedule. Then processing of data and preparation of tax returns and lodgments in relation to the relevant taxation formatas per the requirements of Australian Taxation Office (ATO) requirements. Finally a review on taxation lodgement compliance is made after submission of the returns, assessment of the efficiency and effectiveness is made as well as recommendations made on the same[ CITATION Mel07 l 1033 ].

    2.)Would the business need to make any payments?

    The business will not need to make any payment since all the activities do not qualify for taxation

    3.)Explain (80–100 words) the difference between a cash flow statement and a cash flow projection.

    Cashflow statements are not detailed since they generalise incomes and expenses and changes in the financial statement while the cash flow projections are more details such as a list of all relevant expense and income accounts.

    Cash flow statements are end year financial statements that must be prepared to give a report on cash inflows and outflows of a given financial year while cash flow projections are forecasts giving the cash flow and cash outflow targets of an organization in a given financial period.

    Cash flow statement use historical and current information while the cash flow projections use future information[ CITATION Cha08 l 1033 ].

    A).hat is the closing cash balance at the end of the fifth month?

    Opening Balance

    $35,000 $40,000 $15,000 ($10,000)

    Cash revenue

    Cash Payments

    Closing Balance

    ($10,000)

    B). Are there any months when the business is likely to have a cash shortfall?

    The business will have a cash shortfall in the 4th month

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