Impact of Accounting Systems on Business

This assignment delves into the crucial role of accounting systems in businesses. It analyzes how computerized vs. non-computerized accounting systems affect small and medium enterprises (SMEs) in Lipa City, Philippines. The research explores factors like information quality, organizational performance, and the challenges faced by SMEs adopting modern accounting practices. Additionally, it investigates the impact of management accounting systems, R&D measurement within national economic accounting, and the integration of prediction markets in international accounting standard setting.

Running head: ACCOUNTING SYSTEMS AND PROCESSES
Accounting systems and Processes
Name of the Student:
Name of the University:
Author Note:

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ACCOUNTING SYSTEMS AND PROCESSES
Table of Contents
Question 1........................................................................................................................................3
Question 2........................................................................................................................................3
Question 3........................................................................................................................................4
Question 4........................................................................................................................................5
Question 5........................................................................................................................................6
Question 6........................................................................................................................................7
Formula View:...............................................................................................................................10
Question 7......................................................................................................................................13
Question 8......................................................................................................................................18
Revised Data:.................................................................................................................................19
Question 9:.....................................................................................................................................19
Question 10....................................................................................................................................20
Question 11....................................................................................................................................21
Question 12....................................................................................................................................21
Question 13....................................................................................................................................22
Reference List................................................................................................................................26

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ACCOUNTING SYSTEMS AND PROCESSES

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ACCOUNTING SYSTEMS AND PROCESSES
Question 1
Replacing cell references with name will help in automatically changing them to defined
terms. It becomes essential for users to give name to cells for easing the correlation of statements
and understanding. Structure can be easily drawn by referring cells with names. Formula used in
such cells would make sense when they are named properly (Arcega et al., 2015).
Question 2
Negative numbers in bracket can be displayed by using minus or negative sign or by
highlighting with color such as red. This is done for indicating and flagging up that figures used
here is of negative value. Accountant displays negative numbers in brackets because they want to
represent outflow of cash from business or credit of cash into any particular account (Hui &
Chang, 2016).

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ACCOUNTING SYSTEMS AND PROCESSES
Question 3:
Separation of spreadsheet into data entry area and report area is of great help to
accountants as well as users for minimizing the errors that is involved in financial study. One of
the significant mechanism is designing the spreadsheet that ensures long and short-term success
to organization and its business. Process of decision-making is enhanced in business as it has
power of enhancing, analyzing, providing, and parallel flexibility to operations of business.
Separation would help in generating appropriate and correct information to users. Systematic
entering of data is enhanced by creating separation and is regarded as an important tool (Watts et
al., 2014).

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ACCOUNTING SYSTEMS AND PROCESSES
Question 4:
If function facilitates logical comparing between what is expected by users and between a
values and is one of the most popular excel function. Under this function, users set a command
and if the command sets were met with conditions, this would give logical justification. There
are one value for each result that is true and false result (Liu, 2015).
PERIOD Particulars Amount Remarks
September'17
Sales Revenue, less,
Total Expenses 43200
=IF(C7>0,"NET
PROFIT","NET LOSS")
September'17
Sales Revenue, less,
-21908
=IF(C8>0,"NET

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ACCOUNTING SYSTEMS AND PROCESSES
Total Expenses PROFIT","NET LOSS")
Question 5:
Cost of goods sold under periodic inventory system is determined at end of year by
making physical count of merchandize. The cost of purchased merchandized is added with stock
balance at beginning of year and deducting the inventory balance at end of year. It is less
expensive for organization to make physical count of inventories, as it does not require
permanent employees. Organization dealing with wide variety of goods and services make use of
periodic accounting (Ghanem & Sulaiman, 2016). This can be explained with the help of an
instance, suppose UVW Corporation has made a purchase of inventory worth $ 45210 and has an
inventory balance at beginning period at $ 24321. The value of inventory at the end of period
stood at $ 65431. Then the cost of goods sold is $ 4100.
Periodic inventory system has both advantages and disadvantages and therefore while
following such system, an organization is required to gain some knowledge or conduct
preliminary analysis regarding its usefulness.
Question 6:
Normal view:

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ACCOUNTING SYSTEMS AND PROCESSES
Formula View:

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ACCOUNTING SYSTEMS AND PROCESSES
Normal view:
Formula View:

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ACCOUNTING SYSTEMS AND PROCESSES
Normal view:

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ACCOUNTING SYSTEMS AND PROCESSES
Formula View:

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ACCOUNTING SYSTEMS AND PROCESSES
Question 7:
Normal View:

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ACCOUNTING SYSTEMS AND PROCESSES
Particulars
Average
Cost FIFO LIFO
Beginning Inventory $3,420 $3,420 $3,420
Net Purchases $7,790 $7,790 $7,790
Cost of Goods Available $11,210 $11,210 $11,210
Ending Inventory $7,583 $8,075 $7,250
Cost of Goods Sold $3,627 $3,135 $3,960
Calculation of Gross Profit:-
Particulars
Average
Cost FIFO LIFO
Sales Revenue $25,000 $25,000 $25,000
Less: Cost of Goods Sold $3,627 $3,135 $3,960
GROSS PROFIT $21,373 $21,865 $21,040
Calculation of Gross Profit:-
Formula View:

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ACCOUNTING SYSTEMS AND PROCESSES
Particulars Average Cost FIFO LIFO
Sales Revenue 25000 =B6 =C6
Less: Cost of Goods Sold 3627 3135 3960
GROSS PROFIT =B6-B7 =C6-C7 =D6-D7
Particulars Average Cost FIFO LIFO
Beginning Inventory 3420 3420 3420
Net Purchases 7790 7790 7790
Cost of Goods Available =B17+B18 =C17+C18 =D17+D18
Ending Inventory 7583 8075 7250
Cost of Goods Sold =B19-B20 =C19-C20 =D19-D20
Calculation of Gross Profit:-
Calculation of Gross Profit:-
Workings:

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ACCOUNTING SYSTEMS AND PROCESSES

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ACCOUNTING SYSTEMS AND PROCESSES
Revised data:
Workings:

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ACCOUNTING SYSTEMS AND PROCESSES

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ACCOUNTING SYSTEMS AND PROCESSES
Question 8:
Original Data:
Normal View:

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ACCOUNTING SYSTEMS AND PROCESSES
Date Particulars Amount
30/4 Bank Balance as per Pass Book $19,670
Add:
Deposit in Transit $1,543
EFT Insurance Payment $300
Book Error Cheque 1419 $340
NSF Cheque from Customer $1,700
Bank Service Charge $40 $3,923
$23,593
Less:
Outstanding Cheques 2462
EFT Rent Receipt 600
Note Receivable $1,500
$4,562
30/04 Cash Account Balance as of 30th April $19,031
Bank Reconcilaition Statement
As on 30th April
Formula View:
Date Particulars Amount
30/4 Bank Balance as per Pass Book 19670
Add:
Deposit in Transit 1543
EFT Insurance Payment 300
Book Error Cheque 1419 340
NSF Cheque from Customer 1700
Bank Service Charge 40 =SUM(D8:D12)
=E6+E12
Less:
Outstanding Cheques =1532+700+230
EFT Rent Receipt 600
Note Receivable 1500
=SUM(D15:D18)
30/04 =IF(E20>0,"Cash Account Balance as of 30th April","Bank Overdraft Balance as of 30th April") =E13-E18
Bank Reconcilaition Statement
As on 30th April
Revised data:

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ACCOUNTING SYSTEMS AND PROCESSES
Question 9:
Question 10:
Allowance method-

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ACCOUNTING SYSTEMS AND PROCESSES
Written off method-
Question 11

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ACCOUNTING SYSTEMS AND PROCESSES
Question 12:
Question 13:
Business of Wesfarmers group:
One of the largest organization operating in Australian retail sector is Wesfarmers group
employing 220000 employees. Organization is engaged in diverse range of activities that involve
chemical, office suppliers, home improvement, liquor, supermarket, hotel and convenience,
departmental stores, industrial divisions having business in fertilizers, chemical, energy and
safety products (Xiangyang & Zengbiao, 2014).
Statement of comprehensive income
Statement of comprehensive income depicts information about retained earnings, foreign
currency translation reserve and cash flow hedge reserve. Total amount of comprehensive
income that is attributable to member of parent is recorded at $ 329 in financial year 2016 as
against $ 2248 in year 2015 respectively. There is no cash flow reserve in year 2016 and had
balance of $ 177 in year 2015.

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ACCOUNTING SYSTEMS AND PROCESSES
Commenting on several items of group
Dividend- The key component for providing return to shareholders is dividend payment.
Dividend payment to shareholders in year 2016 has considerably reduced. Total amount of
equity dividend paid is recorded at $ 40783 in year 2016 as against $ 40402 in year 2015. Group
seeks growth in dividend.
Risk and mitigation- The commitment, identification, monitoring, management and
importance of recognizing material risks associated with the activities of group is one of main
part of organization’s dealing with several issues. Wesfarmers as risk management framework
that is managed and approved by board on annual basis. Process of risk management of
organization is embedded with overreaching risk management control.
Earnings per share- The basic and diluted earnings per share of group for year 2016 and
2015 stood at 36.2 and 216.1. It is suggested by figure that there has been significant decline the
earnings per share of organization. Variance involved in basic and diluted EPS calculation is
attributable to in substance options.
Sustainability- Organization intends to have ling-term value creation by serving
communities well. The long-term responsible management helps in ensuring sustainability of
organization. Addressing significant issues that have a direct impact on finance outcome of
organization helps in providing sustainability to organization.
Return on equity- Return on equity is obtained by dividing net income by total value of
equity and the vale is calculated at 0.18.

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ACCOUNTING SYSTEMS AND PROCESSES
Corporate governance- Providing satisfactory return to shareholders is one of the long-
standing commitment of Wesfarmers and thereby fulfilling the obligations and responsibilities of
corporate governance that is in the best interest of stakeholders and organization. System of
corporate governance of group can be improved by reviewing of policies.
Income statement-Income statement of organization provides detail picture of expenses,
revenue, earning before income and tax and earning per share. Revenue has increased from $
62447 in year 2015 to $ 65981 in year 2016. There has been decline in profit after payment of
income tax from $ 3444 in ear 2015 to 1038 in year 2016. Significant decline as been witnessed
in figures of profit attributable to embers of parent company.
Balance sheet- The total value of current assets in current year was recorded at $ 9684
and total value of current liabilities stood at $ 10424. Other items included in balance sheet is
shareholder’s equity, non-current assets and non-current liabilities.
Working capital ratio calculation:
Working capital is calculated by dividing current assets by current liabilities and this
indicated the liquidity position of organization. Improving the efficiency of working capital is
one of the approach to deliver satisfactory return to shareholders (Zakaria et al., 2014). The
working capital ration for year 2016 is calculated at 0.93.
Particular Amount
Current liabilities $ 10424
Current assets $ 9684
Working capital ratio 0.93

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ACCOUNTING SYSTEMS AND PROCESSES
Net profit after tax:
Particulars
Amount ($
m)
Net profit after tax
2016 2353
2015 2440
2014 2689
2013 2,261
2012 2126
Net profit after
tax 2016 2015 2014 2013 2012
0
500
1000
1500
2000
2500
3000
2353 2440
2689
2261 2126
Amount ($ m)
Amount ($ m)

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ACCOUNTING SYSTEMS AND PROCESSES
2353; 20%
2440; 21%
2689; 23%
2261; 19%
2126; 18%
Amount ($ m)
Net profit after tax
2016
2015
2014
2013
2012
Advising Vikram regarding investment decisions:
The profit generated by operations of Wesfarmers has been improving continuously.
However, the earning per share has declined significantly but the business performance is stable.
Therefore, it is recommended to invest his $ 50000 in Wesfarmers business.

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ACCOUNTING SYSTEMS AND PROCESSES
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ACCOUNTING SYSTEMS AND PROCESSES
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