(Solved) Accounting Systems and Processes - Assignment

Running head: ACCOUNTING SYSTEM AND PROCESS
Subject Code: ________
Subject Name: Accounting Systems and Processes
Assignment Task Number: 2
List of Questions Attempted: 13
List of Questions Not Attempted: 0

1ACCOUNTING SYSTEM AND PROCESS
Table of Contents
Answer to question 1:.................................................................................................................3
Answer to question 2:.................................................................................................................3
Answer to question 3:.................................................................................................................4
Answer to question 4:.................................................................................................................5
Answer to question 5:.................................................................................................................6
Answer to question 6:.................................................................................................................8
Answer to question 7:...............................................................................................................10
Answer to requirement 1:.........................................................................................................10
Answer to requirement 2:.........................................................................................................11
Answer to question 8:...............................................................................................................11
Answer to A:............................................................................................................................11
Answer to B:............................................................................................................................12
Answer to question 9:...............................................................................................................12
Answer to Question 10:............................................................................................................13
Answer to question 11:.............................................................................................................13
Answer to question 12:.............................................................................................................14
Answer to question 13:.............................................................................................................14
Reference List:.........................................................................................................................18

2ACCOUNTING SYSTEM AND PROCESS
Answer to question 1:
The orientation of the spreadsheet is replaced by their names in each of the cells. The
main objective of substituting the cell names is to facilitate an easy understanding of the
convenience and association with the computations performed with declaration provided in
each of the spreadsheet (Chak & Fung, 2015). Below stated is the example of spreadsheet
with reference to the names of the spreadsheet;
Normal View

3ACCOUNTING SYSTEM AND PROCESS
Formula View:
Answer to question 2:
The negative numbers in the spreadsheet are presented in the form of brackets that are
in red colour. The below stated example provides the illustrations of negative numbers;

4ACCOUNTING SYSTEM AND PROCESS
There is no such rule that states that an accountant cannot represents the negative
numbers in bracket. Therefore presenting the negative numbers in bracket is regarded as
standard practice (Schaltegger & Burritt, 2017). The primary reason for accountant to show
the negative numbers in bracket is to emphasize that figure represents loss or expenditure and
does not constitute a gain.
Answer to question 3:
According to Fayard, (2015) it is vital for the accountants to have a separate
accounting or bookkeeping data. The main objective of having a separate bookkeeping data is
facilitate the representation of the single view for every single row. Similarly for accounting
reports, a distinct area is required as this would enable the accountant to create a detailed
report that covers the required source of information. A wide range of data entry is employed
for recording the raw data whereas the part of report is employed for transmitting the record
to important information.
A relevant affirmation can be made in this regard is that having a separate record
keeping is necessary for recording incorrect accounting records of raw figures in the
spreadsheet (Eldenburg et al., 2016). Therefore the procedure involved in the creation of
separate data entry area provides the facilities of easy recording of data together with the
elimination of unwanted records. The below stated example of spreadsheet provides a better
understanding of the above stated declaration;
Normal View:

5ACCOUNTING SYSTEM AND PROCESS
Formula View:

6ACCOUNTING SYSTEM AND PROCESS
Answer to question 4:
According to Taleb et al., (2015) the “IF” functions is referred as the form of
functions that provides assistance in determining single value. On noticing that “IF” function
criteria is met, the result would be depicted as “True” while on non-fulfilment of the criteria
the result would be stated as incorrect. The “IF” functions helps in rendering the predictable
intellect to the computer database with the assistance of the database and is capable to
execute the decisions in respect of the established conditions together with the ascertainment
of the program sequence. An example of spreadsheet is given below where the “IF” functions
is applied;
Answer to question 5:
As evident from the foot video the resources represents that a periodic method of
inventory system has been followed. The primary reason for such assumption is that the
physical count of each unit is depicted in the video. The differences between the perpetual
and the periodic inventory system are stated below;
Basis of Distinctions Perpetual Inventory System Periodic Inventory System
Accounts In the Perpetual inventory
system a continuous informs
is made either to the general
ledger or the inventory
While under the periodic
inventory system there is no
recording of the cost of
goods sold during the

7ACCOUNTING SYSTEM AND PROCESS
journal since the inventory
connected dealings happen
(Jermias, 2017).
accounting period unless
there is a physical count of
inventory which is later used
to derive the cost of goods
sold (Uyar & Kuzey 2016).
Computer system Under the perpetual
inventory system it is not
possible to manually keep
the record of track for the
reason that there might be
abundant dealings at unit
level in each bookkeeping
period.
Under the period inventory
system it permits the manual
recording of transactions for
a very minor inventories.
Accounting cycle In the perpetual inventory
system it is possible to
obtain the correct counts of
inventory in the real time
(Otley, 2016).
In the periodic inventory
system it is not probable to
implement the sequence
calculation since there is no
such method of gaining
correct inventory sums
during actual time.
Answer to question 6:
Introduction:
Computer spreadsheets which is usually referred as the copy format of the paper
based sheets have been of late used by the accountants and bookkeepers. It is necessary for an

8ACCOUNTING SYSTEM AND PROCESS
organization to separate the spreadsheet complexities and issues of use as the requirements
for control varies from one business to another (Chenhall & Moers, 2015).
Use of Electronic Spreadsheet:
The benefit of using the electronic spreadsheet is that it provides a combination of
rigid layout which is used to keep records of the accounts with an inbuilt adding machine.
Companies are using the spreadsheet as the tracking and monitoring tool of workflow
that helps in supporting the operational processes. This includes unpaid invoices, open claims
and other forms of information that was previously retained in the paper or manual folders
(Titman et al., 2015). Spreadsheets help in implementing control by monitoring and
controlling the financial transactions which is captured by the spreadsheet accurately and
completely. The spreadsheet act as the analytical management information system. The use of
spreadsheet in accounting is regarded as the analytical review and management process of
decision making. This is used to assess the reasonableness of the financial totals (Bekaert &
Hodrick, 2017). Spreadsheets are used by the companies to directly determine the
transactions of financial statements or the balance amounts that are recorded in the general
ledger or the fiscal statements. Spreadsheet generally has wide variety of use and
complexities.
Advantages of Spreadsheet:
The advantages of spreadsheet includes the making easier calculations. With the
application of spreadsheet financial calculations becomes very easy to understand as it
displays the stages of development of sum with the capability of writing the notes and
explaining each of the lines (Lau, 2016). The grid that encase the spreadsheet cells be either
made visible or the same can be hidden at the time of printout which enables the report to be
formatted according to the display of the spreadsheet.
Spreadsheet templates that comprises of the formula for constantly using the
spreadsheet for the purpose of increasing the productivity by eliminating the need for highly
educated operators (Barr, 2018). Spreadsheet forms can be used as the source of interactions
with the database to fill up the required fields, automating most of the overall creation of the
spreadsheet.
Disadvantages of Spreadsheet:
In spite of the several uses and advantages spreadsheet has also surrounded numerous
criticism as well. One of the disadvantages of spreadsheet is that it is deskilling. Workers
would not be required to possess the skills of expert of specialist and may compete with the
inexpensive unskilled labour (Brooks, 2015). Individual spreadsheet are installed in almost
most of the computers in an office and as result it would enable persons to hoard the data and
project their own forecasts without the cooperation of the colleagues. Such phenomenon
results in duplication of data as well as the efforts across the organization. The structure of
spreadsheet forces an increase in the requirements of storage over the necessities of the raw
data.
Conclusion:
With the development made to the spreadsheet it has enhanced its abilities to
exchange the information with the other application which ultimately improves the
advantages of spreadsheet and eliminating the disadvantages (McKinney, 2015). Integrating
the spreadsheet with the graphic and word processing packages helps in raising the

9ACCOUNTING SYSTEM AND PROCESS
productivity of the reports, graphs and enabling figures easier to describe in the spreadsheet.
Integrating the spreadsheet into the data base helps in reducing the disadvantages of hording
data and creates a format overhead to store the raw information in the spreadsheet.
Answer to question 7:
Answer to requirement 1:
Average Method
Unit Cost per Unit (in $) Total Amount (in $) Unit Cost per Unit (in $) Total Amount (in $) Unit Cost per Unit (in $) Total Amount (in $)
01-10-2018 60 57 3,420
03-01-2017 10 65 650
70 58 4,070
12-10-2018 30 70 2,100 100 62 6,170
18-10-2018 70 72 5,040 170 66 11,210
31-01-2017 55 66 3,627 115 66 7,583
Average Method
Date
Purchase Issued Balance Inventory
FIFO Method:
Unit Cost per Unit (in $) Total Amount (in $) Unit Cost per Unit (in $) Total Amount (in $) Unit Cost per Unit (in $) Total Amount (in $)
01-10-2018 60 57 3,420
03-10-2018 10 65 650 10 65 650
12-10-2018 30 70 2,100 60 65 3,900
10 65 650
30 70 2,100
18-10-2018 70 72 5,040 60 65 3,900
10 65 650
30 70 2,100
70 72 5,040
31-10-2016 55 65 3,575 5 65 325
10 65 650
30 70 2,100
70 72 5,040
31-10-2016 55 3,575 115 8,115
FIFO Method
Date
Purchase Cost of Goods Sold Balance Inventory
LIFO Method:
Unit Cost per Unit (in $) Total Amount (in $) Unit Cost per Unit (in $) Total Amount (in $) Unit Cost per Unit (in $) Total Amount (in $)
01-10-2018 60 57 3,420
03-01-2017 10 65 650 10 65 650
12-10-2018 30 70 2,100 60 57 3,420
10 65 650
30 70 2,100
10-10-2018 70 72 5,040 60 57 3,420
10 65 650
30 70 2,100
70 72 5,040
31-01-2017 55 72 3,960 60 57 3,420
10 65 650
30 70 2,100
15 72 1,080
55 72 3,960 115 7,250
Date
Purchase Cost of Goods Sold Balance Inventory
LIFO Method
Answer to requirement 2:

10ACCOUNTING SYSTEM AND PROCESS
Answer to question 8:
Answer to A: Normal View
Formula View:

11ACCOUNTING SYSTEM AND PROCESS

12ACCOUNTING SYSTEM AND PROCESS
Answer to B: Normal View
Formula View:

13ACCOUNTING SYSTEM AND PROCESS
Answer to question 9:

14ACCOUNTING SYSTEM AND PROCESS
Answer to Question 10:
The methods of approximating the bad debts that is given below;
Direct Write-off Methods:
In the direct write-off methods of writing off bad debts any form of specific amounts
that turns out to be uncertain or uncollectible the loss from such amount owing to is allotted
in the bad debt expenditure account (Scott, 2015). As an example, a business having the
debtors balance of $4500 that would turn out to be uncollectible on 30th June 2017, therefore
the journal entry for the same is state below
Allowance Methods:
Under the allowance method of writing off the bad debt the expenses that results from
the bad debt is written off to the statement of profit and loss account or income statement of
the business as the operating expenses (Williams, 2014). The bad debt which is written off is
debited to the “Allowance A/C” somewhat debiting the bad debt expenditure account.
Allowance Method
JG 64
Date Account Title and Description Ref. No Debit Credit
30-06-2017 Bad Debt Expense 452 6500
Allowance for Bad Debt 425 6500
Estimate of Bad Debt
452
Date Account Title and Description Ref. No Debit Credit Balance
30-06-2017 Estimate of Bad Debt JG 64 6500 6500
425
Date Account Title and Description Ref. No Debit Credit Balance
30-06-2017 Estimate of Bad Debt JG 64 6500 6500
General Journal
Bad Debt Expense
Allowance for Bad Debt
Answer to question 11:
In the present age technology computers have evolved as the vital constituents of the
online retailing. Taking into the account the example of E-Bay that have used the computers
as the tool for launching the promotional products to the online customers so that a demand
among the customers is created (Macve, 2015). An argument can be bought forward in favour

15ACCOUNTING SYSTEM AND PROCESS
of E-Bay that having the correct business culture and technology in place can help in
stimulating sales since computers as the promotional tool can contemplate the retail market.
Therefore, the use of computers is regarded as the vital tool for keeping the records for the
goods and products sold that possess the prospect of serving the increased consumer base.
Answer to question 12:
Debit Credit
Amount (in $) Amount (in $)
05-01-2018 3,000
3,000
Accounts Receivables A/c - James
Notes Receivables A/c
(Being Notes receivable dishonored)
Journal Entries
Date Particulars
Debit Credit
Date Particulars Amount Date Particulars Amount
05-01-2018 Sales 10,500 05-01-2018 Accounts Receivable 10,500
Total 10,500 Total 9,500
Cash Account
Debit Credit
Date Particulars Amount Date Particulars Amount
05-01-2018 Cash Account 3,000 05-01-2018 Accounts Receivable 3,000
Total 3,000 Total 3,000
Sales Account
Answer to question 13:
Introduction
Taking in to the account the performance of the Wesfarmers the company has
recorded a highest level of earnings and reported a strong operating cash flow with higher

16ACCOUNTING SYSTEM AND PROCESS
increase in the return on equity for the Wesfarmers. This defines the strength of Wesfarmers
group structure and places emphasis on the cash generating capacity of the company.
Performance Overview
Wesfarmers has recorded a substantial amount of rise in their net profit during the
financial year of 2017. Apart from excluding the significance items, the underlying NPAT
rose to 22.1% to $2,873 million. From the investors point of view the earnings per share of
the company increased to 21.6% to stand at a record $2.55 each share and the ROE for the
company increased to 9.6% to stand at 12.4%. Wesfarmers has declared a fully franked final
dividend that amounted to $1.20 each share which ultimately lifted the entire year dividend to
$2.23 from the previous figures of $1.86 in 2016. Evidences gained suggest that the emphasis
of the management has been in the direction of providing the long run shareholder return.
Strong Free-Cash Flow:
The Wesfarmers management of cash flow was considerably higher for the year with
the operating cash flow of the company increasing to $861 million to $4,226 million. An
important assertion can be stated that the instances of higher cash flow is mainly because of
the growth in earnings along with enhanced inventory management through the retail division
to partially offset the requirements of higher working capital in the company.
Taking into the account the free cash flow of the Wesfarmers the company reported a
free cash flow of $4,173 million which was previously $2,940 million in 2016. This reflects
Wesfarmers has higher operating cash flow with reduced net capital spending and profits of
$947 million from the divestment of Cole’s credit card receivables. In addition to this,
Wesfarmers has reported a strong balance sheet throughout the financial year of 2017. The
net debt of Wesfarmers along with the interest rate swap assets was $4,321 million which is
$2,321 lower from the figures of previous year.
Sustainability Approach:
Considering the approach of sustainability of Wesfarmers, the company sufficiently
addresses the range of issues that is important in their own way and eventually creates an
effect on the monetary results. Wesfarmers lends its support on the climate related financial
disclosure to review the annual risk of climate in its business.
Improved Non-Current Assets:

17ACCOUNTING SYSTEM AND PROCESS
Investments in associates and joint venture
Deferred tax assets
Property
Plant and equipment
Goodwill
Intangible assets
Intangible assets
Other
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
605
1042
2396
7216
14448
4625
565
202
703
971
2195
7245
14360
4576
246
152
Items of non-current assets of Wesfarmers
2016 2017
Figure 1: Figure representing Non-Current Assets of Wesfarmers
(Source: As Created by Authors)
605; 2%1042; 3%
2396; 8%
7216; 23%
14448; 46%
4625; 15%
565; 2%202; 1%
Items of non-current assets of Wesfarmers
in 2017
Investments in associates and joint
venture
Deferred tax assets
Property
Plant and equipment
Goodwill
Intangible assets
Intangible assets
Other
Figure 1: Figure representing Non-Current Assets of Wesfarmers
(Source: As Created by Authors)
As evident from the above stated assessment of the Wesfarmers the share of non-
current assets has augmented over the years and a recommendations can be provided to the
investors to make an investment in the shares of Wesfarmers. In addition to this, Wesfarmers
has strong balance sheet with efficient position of liquidity that can be evidently understood
from the figures reported by the company.

18ACCOUNTING SYSTEM AND PROCESS
Strong Dividend Growth:
The outcome obtained suggest that Wesfarmers has upheld the competitive advantage
both in respect of domestic as well as the international operations over the years. In
accordance with the year’s present record incomes and robust cash flow the Wesfarmers
board has declared a final ordinary dividend of 120 cents each share that takes the ordinary
dividend to 223 cents each share.
Conclusion:
On a conclusive note it can be observed that the Wesfarmers has reported a better
future prospect for investment and making an investment in shares of Wesfarmers could be
considered as the viable options. The investors would be able to maximize their return from
their shares and would also be able to earn a higher dividends.

19ACCOUNTING SYSTEM AND PROCESS
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