Financial Management in Business

Accounting
1

Table of Contents
Task 1: Written activity...................................................................................................................6
Q1................................................................................................................................................6
Q2................................................................................................................................................6
Q3................................................................................................................................................6
Q4................................................................................................................................................6
Q5................................................................................................................................................6
Q6................................................................................................................................................7
Q7................................................................................................................................................7
Q8................................................................................................................................................7
Q9................................................................................................................................................7
Q10..............................................................................................................................................8
Q11..............................................................................................................................................8
Q12..............................................................................................................................................8
Q13..............................................................................................................................................8
Q14..............................................................................................................................................8
Q15..............................................................................................................................................9
Q16..............................................................................................................................................9
Q17..............................................................................................................................................9
Q18............................................................................................................................................10
Q19............................................................................................................................................10
Q20............................................................................................................................................10
Q21............................................................................................................................................11
Q22............................................................................................................................................11
Q23............................................................................................................................................11
Q24............................................................................................................................................12
Task 2: Workplace activity............................................................................................................13
Q1..............................................................................................................................................13
Q2..............................................................................................................................................13
Q3..............................................................................................................................................14
Q4..............................................................................................................................................15
Q5..............................................................................................................................................15
Q6..............................................................................................................................................15
Q7..............................................................................................................................................16
Q8..............................................................................................................................................17
Q9..............................................................................................................................................17
(a)...........................................................................................................................................17
(b)...........................................................................................................................................17
(c)...........................................................................................................................................18
Q. 10..........................................................................................................................................18
Q11............................................................................................................................................19
Q12............................................................................................................................................21
Q13............................................................................................................................................22
Q14............................................................................................................................................22
Q15............................................................................................................................................23
Q16............................................................................................................................................23
2

Q17............................................................................................................................................23
Q18............................................................................................................................................24
Q19............................................................................................................................................25
Q20............................................................................................................................................26
Q21............................................................................................................................................26
Q22............................................................................................................................................26
Task 3.............................................................................................................................................28
Q1..............................................................................................................................................28
Q2..............................................................................................................................................28
Q3..............................................................................................................................................29
Q4..............................................................................................................................................29
Q5..............................................................................................................................................30
Q6..............................................................................................................................................30
Q7..............................................................................................................................................30
Q8..............................................................................................................................................31
Q9..............................................................................................................................................32
References:-...................................................................................................................................34
3

Task 1: Written activity
Q1.
The expenses when are allowed then the tax is not applicable to those expenses i.e. they are
reduced from the taxable income like the expenses for day to day operation like advertisement,
bank charges, etc. while disallowed expenses are liable to taxation i.e. they are not reduced from
the taxable income like donations, amortization of expenses, etc. (Australian Government, 2017).
Q2.
The income of the trust is distributed to the adults then the trust is not liable for the tax, while if
the income is distributed to the minor or non-residents then the trustee will be liable on their
behalf. The trust income is accumulated and liable for the highest rate of tax (Australian
Government, 2017).
Q3.
The forecast returns show the expected cash flows of the future from the business. The returns
which predict the future taxable income with the help of the historical information and the
forecast returns help to the company to make an estimate of the position of the company in
future. The past trends of the expenses and the income will help in making the forecast returns
(Masturzo, 2016).
Q4.
The organization which is incorporated is required to fulfill the objectives for which it has been
incorporated. The organizations do not focus on earning the profits. While preparing the
statutory returns the not for profit organization will be required to abide by the applicable
legislation (Australian Government, 2017).
4

Q5.
The client objectives can be presented with the help of methods for quantitative objects such as
preparing various reports for performance evaluation like sales, accounting, etc., budget, etc. For
qualitative objects, the performance can be evaluated by following the methods like observing,
feedback, etc.
Q6.
The cash flow for an organization is mainly through the trade receivables, payables or any
shortfalls (Driver, 2018). The cash flow can be controlled by following the below-mentioned
methods:
1. Maintain reserves for cash which can be used to meet the shortfalls.
2. The customers of an organization should be encouraged to pay fast.
Q7.
The legislative acts which a business organization is required to follow are:
1. Taxation Act, 2003
2. Occupational Health and Safety Act, 1989
There is much more legislation which the organization is required to follow as per the structure
and business that the company is doing (Australian Government, 2017).
Q8.
The financing information can be provided by various means i.e. through consulting the financial
consultants, taxation consultants, etc. The information can be referred to the applicable
regulations which the company is required to follow the taxation act, 2003 and the auditing and
assurance standards board, Australian Financial Security Authority, etc.
5

Q9.
The client is following the business of veterinary services and the main objective of the client is
to provide the financial management regarding the GST and the reduced taxation on income and
various other reports of legislation.
Q10.
The business assets of Anthony Bowman are building, equipment, inventories, and vehicles.
These assets are necessary for an organization to run and achieve success and the objective
which it desires.
Q11.
The size of the business can be evaluated by determining the staff size or the size in terms of the
quantity. In terms of staff, the size of the business is 5 who are in full-time employment. If the
size is determined in terms of quantity then the size of the business will be:
1. Balance sheet basis- $ 550,000- $ 50,000= $ 500,000.
2. Income basis- $ 1,000,000- $ 680,000= $ 320,000.
Q12.
Anthony Bowman, who is a director, is currently in a sole proprietorship business where the sole
proprietor alone will be responsible for all the acts and the liability. The veterinary services are
being provided by Anthony Bowman. The business can be termed as a small business since the
revenue of the business is less than $ 2Million.
Q13.
The information which is provided is that the business the client is operating since five years and
the administrative staffs that are part-time are providing the internal reports about the payment
which is required to be done to the accounts and banking people including the payment which is
paid for fortnightly.
6

Q14.
The financial options available to the company are:
1. The company can consider the factoring method.
2. The company can obtain a loan from the bank to increase the performance of the
business.
3. The company can raise the finance with the help of accelerators and incubators.
4. Crowdfunding is the best way in today’s world to raise the finance.
Q15.
Bowman Company
Operational Project
Forecast Returns Vs. Actual Returns
Quarter Forecast Actual
Amount ($) Amount ($)
September 5000 5500
December 5000 9000
March 5000 3000
June 5000
Total 20000 17500
Summary:
Until the year-end, the company has an actual return of $ 16,500 which is $ 2,500 more than the
estimated forecast returns. The returns are more due to the reason the peak time in the Quarter of
December. The estimations of the company will be reached at the end of the financial year.
Q16.
The review point in financial management will be analyzing the results from the budget. The
budget that has been prepared and the results when compared to the actual, then the actual results
are more and the company is expecting that the company will reach the budget estimation.
7

Q17.
Bowman Company Financial Management
Quarterly Questionnaire
Current Objective Change to Comments
Financial Statements
Reporting
No Change Satisfied
BAS Preparation No Change Satisfied
IT Return Preparation No Change Satisfied
Q18.
The company is a need to change the objectives. The new objective of the company is to provide
more responsibilities to the secretary so that the financial authority duties are also fulfilled. This
objective will include providing the information regarding BAS. The secretary will also be
responsible to prepare the financial statements at the meeting.
Q19.
The following ratios are to measure the stability of the business:
1. Debt-Equity Ratio
2. Interest Coverage Ratio
The above ratios will be computed and accordingly, the stability of the business will be
understood. Since, on the basis of the debt-equity ratio, the company will be able to understand
whether there are more debts than the assets (Basu, 2018).
8