Manage Budget and Financial Plans

Running head: MANAGE BUDGET AND FINANCIAL PLANS
Manage budget and financial plans
Name of the student
Name of the university
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1MANAGE BUDGET AND FINANCIAL PLANS
Table of Contents
Assessment task 1......................................................................................................................2
Assessment task 2 – Budget planning project............................................................................9
Assessment task 3 – Monitor and control finances project......................................................13
Assessment task 4: Profit and loss review project...................................................................15
Assessment 5: Aged Debtor Report.........................................................................................18
Reference..................................................................................................................................22

2MANAGE BUDGET AND FINANCIAL PLANS
Assessment task 1
Answer 1
Basis principle of the double entry bookkeeping system is there shall always be 2
entries for each transaction. One of the entries is known as credit entry and another entry is
known as the debit entry (Dudin et al., 2015).
Answer 2
The principle of cash accounting is that the entities shall record the expenses when the
expenses are actually paid rather than recording it when it is incurred.
Advantage – while paying tax under cash accounting basis, it is ensured that the taxes are not
paid for the monies that has not been received yet. It improves the cash flows and ensures that
the funds are available for the tax expenses.
Disadvantage – as it is very simple method it does not allow tracking of the accrual dates of
purchase and sales. In addition, it does not provide matching the transaction with specific
inventory items (Dzhandzhugazova et al., 2015).
Answer 3
Under accrual basis of accounting it requires recording of the accounting transaction
under the period in which they are occurred actually and not under the period to which the
cash flow associated to it takes place.
Advantage – it produces more faithful, more accurate financial statement which is turn
constitutes the better representation of the actual circumstances as compared to the cash basis
of accounting.

3MANAGE BUDGET AND FINANCIAL PLANS
Disadvantage – it requires transactions to be recorded at the time when it takes place.
However, as the invoices do not match with the actual event, this method requires estimation
from the accountant’s end (Kumar, 2017).
Answer 4
Matching principle –depreciation reduces the income of that accounting period though the
expenses do not require any credit or cash payment. Reason behind this expense is complying
with matching principle that is required by the accrual accounting.
Calculation of depreciation expenses – expenses for depreciation can be calculated through
different methods based on the type of the assets, estimated useful life of the asset, expected
business use of the asset and its residual value. Various methods are straight line method,
sum of year’s digit method, units of production method and double declining balance method
(Sofat & Hiro, 2015).
Answer 5
A. Tax periods – tax invoice – purpose of this part is prescribing additional information
required to be included under tax invoices issued for purposes of GST.
B. Financial supplies – this part provides meaning of the term Financial supply. The
financial supplies are the input that is taxed under GST Act.
C. Reduced input tax credits – this part sets out the list for reduced credit acquisitions
that generates an entitlement for reduced input tax credits (Ato.gov.au, 2019).
Answer 6
 Goods and services tax – GST is the broad based tax at the rate of 10% that is
imposed on most of the services, goods and different other items sold over Australia.
Based on the turnover, the business required to be registered for GST

4MANAGE BUDGET AND FINANCIAL PLANS
 Pay as you go – PAYG system allows paying expected tax liability through
instalments. ATO will notify the PAYG obligations
 Fringe benefit tax – if certain benefits are provided to the employees or the people
related to employees by the employer the employer will be liable to FBT
 Superannuation guarantee obligation – as the employer either minimum level for
superannuation can be set for each of the eligible employees or charge can be paud to
the ATO (Ato.gov.au, 2019).
Answer 7
 Some heath and care and medical services
 Most basis foods
 Precious metals
 Farmland (Ato.gov.au, 2019).
Answer 8
If the business is registered under GST, Business activity statement (BAS) shall be
lodged that will help to report and pay GST. If the business is registered with ABN
(Australian business number) and GST, BAS will be automatically sent when it is required to
be lodged
GST reporting shall be one of the following –
 Monthly – if the GST turnover amounted to $ 20 million or more
 Quarterly – if GST turnover is lower than $ 20 million and no obligation is there to
report monthly
 Annually – if voluntarily registered for the GST.

5MANAGE BUDGET AND FINANCIAL PLANS
Based on the circumstances, cycle can be changed for reporting and paying GST (Ato.gov.au,
2019).
Answer 9
Tax equivalent of top marginal rate in addition to medicare shall be withheld from the
payment to the supplier unless the invoice is provided that is quoted with ABN. From 1 st July
2017 the rate is 47% (Ato.gov.au, 2019).
Answer 10
Non-profit organization shall be registered for GST if its turnover exceeds $ 150,000
(Ato.gov.au, 2019).
Answer 11
 The document is intended to be the tax invoice
 Identity of the seller
 ABN number of the seller
 Date of invoice issue
 Brief description of items sold with the quantity and price
 GST amount payable, if any
 Extent to which the sales included in invoice is taxable sale (Ato.gov.au, 2019).
Answer 12
 Profit and loss statement – it represents the income and expenses of the company and
profit or loss generated from incomes after charging the expenses
 Balance sheet – it represents the details regarding assets, liabilities and equities of the
company.