Accounting Systems and Process Application

This assignment delves into the practical applications of accounting systems and processes. It covers topics such as inventory valuation, income statement and balance sheet analysis, bank reconciliation, and risk mitigation strategies within a corporate context using Wesfarmers group as a case study. Students are required to demonstrate their understanding of these concepts through calculations, interpretations, and recommendations for investment decisions.

Running head: ACCOUNTING SYSTEM AND PROCESS
Accounting system and process
Name of the university
Subject code and name
Student name and student ID number
Assignment task number
Author note

1ACCOUNTING SYSTEM AND PROCESS
Table of Contents
Question 1...............................................................................................................................................................2
Question 2...............................................................................................................................................................2
Question 3...............................................................................................................................................................3
Question 4...............................................................................................................................................................3
Question 5...............................................................................................................................................................4
Question 6...............................................................................................................................................................4
Question 7...............................................................................................................................................................8
Question 8...............................................................................................................................................................9
Question 9.............................................................................................................................................................11
Question 10...........................................................................................................................................................11
Question 11...........................................................................................................................................................12
Question 12...........................................................................................................................................................12
Question 13...........................................................................................................................................................12
Reference...............................................................................................................................................................16

2ACCOUNTING SYSTEM AND PROCESS
Question 1
To enable the user to use various formulas the cell references are given the names. Example of liabilities
+ owner’s equity = assets are as follows
Question 2
Negative numbers are shown with bracket to make it more visible and clear. Example for negative
number in bracket is as follows –

3ACCOUNTING SYSTEM AND PROCESS
Question 3
Data area and report area are separately presented to differentiate the processed data and the
unprocessed data (Odar, Kavčič & Jerman, 2015).
Example showing the report area and data area is as follows –
Question 4
IF functions are utilised to set a command for recognizing that whether a particular condition is satisfied
or not (Song & Joo, 2015)
Example of IF function in trial balance is as below –
Normal view -

4ACCOUNTING SYSTEM AND PROCESS
Formula view –
Question 5
The periodic system of inventory does not update the record after each transaction of sales or purchase,
rather it updates the transaction at the end of every closing period (Drury, 2013).
For example,

5ACCOUNTING SYSTEM AND PROCESS
Question 6
Ten column adjusted worksheet
Normal view –
Income statement – normal view

6ACCOUNTING SYSTEM AND PROCESS
Balance sheet – normal view

7ACCOUNTING SYSTEM AND PROCESS
Ten column adjusted worksheet – formula view
Income statement – formula view

8ACCOUNTING SYSTEM AND PROCESS
Balance sheet – formula view

9ACCOUNTING SYSTEM AND PROCESS
Spreadsheet can be used for various accounting purposes like –
 Formatting the data
 Correlating data
 Formulate data
Question 7
Inventory as per normal view –
Gross profit as per normal view –

10ACCOUNTING SYSTEM AND PROCESS
Inventory as per formula view –
Gross profit as per formula view –
After changing the data
Gross profit calculation -
Question 8
Bank reconciliation under normal view –

11ACCOUNTING SYSTEM AND PROCESS
Formula view –
With revised data –

12ACCOUNTING SYSTEM AND PROCESS
Question 9
Account receivable – journal entries
Question 10
Allowance method – uncollectible amounts at closing period are estimated
Example –
Write – off method – if the amount is uncollectible, then bad debts shall be adjusted against the receivables.
Example –

13ACCOUNTING SYSTEM AND PROCESS
Question 11
To assess the solvency of the company, the account receivables are analysed
Question 12
Scenario –
Journal entries –
Question 13
1. Wesfarmers group’s businesses are –
 Liquor and food
 Office essentials
 Home improvement
 Safety and industrials
 Departmental stores
 Resources

14ACCOUNTING SYSTEM AND PROCESS
2. Comprehensive income statement – other comprehensive loss amounted to $ 78 million.
3. Dividends, EPS, ROE, Risk and mitigation
Dividends –.Dividends payment for 30th June 2016 was for $2,600 million.
Earnings per share –The basic and diluted EPS both for 30th June 2016 were 36.2 cents
Return on equity –
ROE = Net income / Shareholder’s equity
ROE = $407 / $22,949 = 0.018
Risk and mitigation – company does not provide any guarantee that are not free from omission or errors or it is
complete, reliable, accurate, suitable or contemporary for the intended use of the users To mitigate this risk, the
company presents the information as per the AASB conceptual framework and accounting standards.
Corporate governance – the company is under compliance with the third edition of ASX corporate Governance
council’s principle for corporate governance and the recommendations issued dated 27th March 2014.
Income statement –the expenses are reduced from revenue to get EBIT
Balance sheet – the balance sheet includes (i) assets which is further divided in current assets and non- current
assets (ii) liabilities which is further divided in current liabilities and non- current liabilities
(Wesfarmers.com.au, 2017).
5. Net profit after tax
Particulars Amount ($ m)
Net profit after tax
2016 2353
2015 2440
2014 2689
2013 2,261
2012 2126

15ACCOUNTING SYSTEM AND PROCESS
Net profit
after tax
2016 2015 2014 2013 2012
0
500
1000
1500
2000
2500
3000
Amount ($ m)
Amount ($ m)
2353
2440
2689
2261
2126
Amount ($ m)
Net profit after tax
2016
2015
2014
2013
2012

16ACCOUNTING SYSTEM AND PROCESS
6. Advice regarding investment decision
As the company is performing consistently, Vikram can invest in the company.

17ACCOUNTING SYSTEM AND PROCESS
Reference
Drury, C. M. (2013). Management and cost accounting. Springer.
Odar, M., Kavčič, S., & Jerman, M. (2015). The role of a management accounting system in the decision-
making process: evidence from a post-transition economy. Engineering Economics, 26(1), 84-92.
Song, H. N., & Joo, C. A. (2015). A Study on Elementary School Teachers' Awareness about School
Accounting Budget System Operation. Journal of Fisheries and Marine Sciences Education, 27(1), 83-
97.
Wesfarmers.com.au. (2017). Retrieved 16 September 2017, from
https://www.wesfarmers.com.au/infodetail/about/investors/2015AnnualReport.pdf

18ACCOUNTING SYSTEM AND PROCESS