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BSBFIM501 Manage Budgets and Financial Plans - Desklib

   

Added on  2020-03-16

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Financial Management[Type the abstract of the document here. The abstract is typically a short summary of the contentsof the document. Type the abstract of the document here. The abstract is typically a short summary of the contents of the document.]
BSBFIM501 Manage Budgets and Financial Plans - Desklib_1

Part AQuestion 1Record keeping is very important for a business in order to work efficiently, to meet the necessary legislative requirements and to keep a track of the income and expenses of the business.The record keeping requirements of a business in Australia include the following:a) Keeping records of all sales and purchases receipts and invoices made for business purposes.b) Necessary documents related to GSTc) Records of salary and wages paidd) Tax invoicese) Documents relating to sale or purchase of assets for the business like land, building, machinery or equipment and also records of any costs associated with the same.f) Records of returns filed for tax, fringe benefit tax (FBT), and employers’ contribution to employee super.The above records should be kept for a minimum period of five years and the records may be in electronic or paper form [ CITATION ATO17 \l 16393 ]Question 2An audit is the inspection of books of accounts of a business followed by physical examination of the inventory to ensure the company is following the documented system of recording transactions [ CITATION The171 \l 16393 ].The financial statements are evaluated to see that the records present a true and fair view of the financial transactions. Audit can be done by an external auditor or employees of the company.A business can be audited for up to three years after the return has been files, however if the returns were not filed on time the audits can go for up to six years [ CITATION Dep17 \l 16393 ]
BSBFIM501 Manage Budgets and Financial Plans - Desklib_2

Question 3The Australian Tax Office requires a business to keep all records for auditing purposes if theyarise. A business must keep the records for a period of five years from the day the tax returns have been filed to the ATO [CITATION ATO16 \t \l 16393 ] The various records to be kept by a business include the following:a) All income and sales records – this includes all sales invoices along with tax invoice, receipt books, cash sales records, and cash register tapes.b) Purchase and expenses records – all business expenses should be recorded inclusive of cash purchases. The records may be in the form of receipts, cheque butt, tax invoices, credit card vouchers, petty cash expenses records etc. In case something is purchased for business but some part of it has been used for private use, a record of how the private use has been calculated should be kept.c) Year-end records – year-end records include records of debtors and creditors, expenses related to buying, selling, repair and maintenance of business assets and stocks. The capital gains made and the taxes on the same should be recorded and stocktake sheets and depreciating assets worksheets should be maintained.d) Bank records – it is mandatory for a partnership or a company to have separate bank accounts for business. Even a sole proprietor is encouraged to do so. Banking records includedeposit slips, cheque butt, bank statements, credit card statements, and loan or lease agreements.e) Other records – depending on the tax requirements of a business, a business may be required to keep records of GST which includes invoices from suppliers. Other records include fuel tax records, employee and contractor records. The employee records include wages and salaries paid to them, tax deducted at source, contributions to the superannuation fund, and fringe benefits given to the employees.Question 4
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