ACC 566 Account Systems and Processes Assignment

Added on - 28 May 2020

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Running head: FINANCIAL ANALYSISSubject Code: ACC 566Subject: Financial AnalysisName of the Student:Assignment Task Number 2Number of Questions Attempted: 13Number of Question Not Attempted: 0
FINANCIAL ANALYSISTable of ContentsQuestion 1..................................................................................................................................2Question 2..................................................................................................................................2Question 3..................................................................................................................................3Question 4..................................................................................................................................3Question 5..................................................................................................................................4Question 6..................................................................................................................................5Question 7..................................................................................................................................6Question 8..................................................................................................................................9Question 9................................................................................................................................13Question 10..............................................................................................................................14Question 11..............................................................................................................................14Question 12..............................................................................................................................15Question 13..............................................................................................................................15Reference..................................................................................................................................19NAMESTUDENT NO Page1
FINANCIAL ANALYSISQuestion 1One of the main reasons for replacing cell references with names is to describe what thatparticular cell wants to display. Naming a particular cell allows the users to identify the cellwith what calculations it is associated with and the technique is used for the basicconvenience of the user. One instance of replacing cell references with names is brieflyillustrated as follows:ParticularsAmount (in $)EBIT100,000Interest10000Tax30000EAT/PAT60000Figure 1: (Chart showing Calculation of EAT/PAT)Source: (Author Made)Question 2In most cases any negative figures which arises in any calculations are shown inbrackets or is highlighted. The main reason for this is to ensure that the user of the excel sheetis aware of the fact that the figure is negative whenever the user see the figures in brackets.The main purpose of putting brackets or highlighting the figure is basic identification anddifferentiation of the negative figures from the positive ones.Figure: (Excel Sheet showing negative figure)Source: (Ahmed, 2015)NAMESTUDENT NO Page2
FINANCIAL ANALYSISQuestion 3The accountant main responsibility is effective calculation and presentation of financial data.In an excel sheet, accountant normally inputs data in another area and for reporting purposesanother sheet or area is used. This is mainly done in order to keep the calculations and thereporting part from getting mixed up and moreover for the sake of simplicity of the wholereporting framework. If any of the calculations and reporting area are mixed up than mistakesor miscalculations are bound to happen. A spreadsheet generated instance has been depictedas follows:Figure 3: (Separate areas of data entry and report in spreadsheet)Source: (Bogale, 2013)Question 4IF function is one of the most popular functions which is used in excel. IF functionprovide the users with an opportunity to make comparison among values in an excelworksheet(Liengme, 2015). IF function a technique which helps to check whether acondition is accomplished or not. The function returns a single value if it is true and anothervalue if it is false. An instance of spreadsheet generated IF function is depicted as follows:NAMESTUDENT NO Page3
FINANCIAL ANALYSISFigure 4: (Excel Sheet showing IF function)Source: (Okeniyi & Okeniyi, 2012)Question 5Perpetual Inventory SystemPeriodic Inventory SystemThis system traces every single movementof inventory as and when they arise. Thesystem analyses the book records forkeeping track of inventories (Berlemann &Wesselhöft, 2014).As per this system of inventory the recodingmethod of inventory involves updating theinventory records at periodic intervals. Thesystem analyses by using physicalverification of inventories (Qin et al. 2014).In this system the inventory and cost ofgood sold are continuously updatedUnder the periodic inventory system, thereis no need for continuous updating howeverboth inventory and cost of good sold areupdated at the end of the year.In the perpetual inventory system there is noneed for closing entries to be recorded.In the periodic inventory system as thesystem updates inventories and cost of goodsold therefore the system requires closingentries to be recorded.NAMESTUDENT NO Page4
FINANCIAL ANALYSISPerpetual Inventory SystemDateParticularsDebitCreditAmount (in $)Amount (in $)01-01-2017Purchase Account......Dr10,000To Bank Account10,00005-01-2017Bank Account..........Dr15,000To Sales Account15,000Periodic Inventory SystemDateParticularsDebitCreditAmount (in $)Amount (in $)01-01-2017Inventory Account.......Dr4,000To Bank Account4,00005-01-2017Bank Account......Dr3,900To Sales Account3,90007-02-2017Cost of Goods Sold Account......Dr3,000To Inventory Account3,000Question 6Any individual who is starting off with accounting background will be definitelyusing excel worksheets for the various calculations. Spreadsheet helps in keeping tracks ofvarious data such as accounts of small as well as large businesses. The owners of smallbusiness are new to accounting and may not be able to maintain proper records, spreadsheethelps offering easy solution to such a problem. Spreadsheet helps in commonly using theanalysis of money which is spent and income that has been received. Spreadsheet enables anindividual to split the amount of cash that business has received and received (Zhu, 2014).Another advantage of using the spreadsheet is that business can link the worksheets togetherand it is very helpful in generating cash flow of a company. However a disadvantage whicharises while using spreadsheets is that such spreadsheets can be manipulated easily and thusthere is an increased chance of occurrence of frauds.NAMESTUDENT NO Page5
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