Manage Finances Within a Budget: Assessment 1 - Short Answers

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Assessment Tasks and Instructions
Student Name
Student Number
Course and Code
Unit(s) of Competency and Code(s) SITXFIN003 Manage finances within a budget
Stream/Cluster
Trainer/Assessor
Assessment for this Unit of Competency/Cluster Details
Assessment 1 Short Answers
Assessment 2 Project
Assessment 3
Assessment conducted in this instance: Assessment 1 2 3
Reasonable Adjustment
1. Has reasonable adjustment been applied to this assessment?
No No further information required
Yes Complete 2.
2. Provide details for the requirements and provisions for adjustment of assessment:
Student to complete
My assessor has discussed the adjustments with me
I agree to the adjustments applied to this assessment
Signature Date
2nd Assessor to complete
I agree the adjustments applied to this assessment are reasonable
Name
Signature Date
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Assessment Guidelines
What will be assessed
The purpose of this assessment is to assess your underpinning knowledge to complete the tasks outlined in the
elements and performance criteria for this unit of competency and relating to the following aspects:
 types of financial records:
o bank deposit documentation
o bank statements
o banking summaries
o business activity statements
o cheque books
o credit card transaction statements
o invoices
o journal entries
o labour and wages reports
o merchant statements
o merchant summaries
o transaction reports
 types of budgets:
o cash budgets
o cash flow budgets
o departmental budgets
o event budgets
o project budgets
o purchasing budgets
o sales budgets
o wage budgets
o whole of organisation budgets
 factors for consideration in the preparation of financial and statistical reports:
o cash flow
o commercial account activity
o commission earnings
o covers and financial return
o daily, weekly and monthly transactions
o expenditure
o income
o occupancy rates and financial return
o performance of department, project and/or products and services
o sales performance
o sales returns
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o staff costs
o stock levels
o variance in income and/or expenditure
o wastage
o yield
 use, contents of and formats for:
o budgets
o financial reports
o statistical reports
 budget terminology
 specific industry sector and organisation:
o use of budgets to control costs and enhance profitability
o importance of budget control
o techniques for maximising budget performance
o financial reporting procedures and cycles
o features and functions of accounting software programs used to manage budgets.
Place/Location where assessment will be conducted
RTO to complete
Resource Requirements
Pen, Paper or computer
Instructions for assessment including WHS requirements
You are required to address all questions to achieve competence. Your trainer will provide you with instructions
for time frames and dates to complete this assessment.
Once completed, carefully read the responses you have provided and check for completeness. Your trainer will
provide you with feedback and the result you have achieved.
Statement of Authenticity
I acknowledge that I understand the requirements to complete the assessment tasks
The assessment process including the provisions for re-submitting and academic appeals were explained
to me and I understand these processes
I understand the consequences of plagiarism and confirm that this is my own work and I have
acknowledged or referenced all sources of information I have used for the purpose of this assessment
Student Signature: Date: / /201
This assessment: First Attempt 2nd Attempt Extension – Date: / /
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RESULT OF ASSESSMENT Satisfactory Not Yet Satisfactory
Feedback to Student:
Assessor(s) Signature(s): Date: / /
Student Signature Date: / /
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Assessment 1
Your Task:
Answer the following questions below. All questions must be answered.
Question 1
List 8 examples for financial records
The 8 kind of records which are being used to maintain financial records are:
1. Transaction records: It is a kind of record which is being used to maintain daily transactions related with
overall operations in the business.
2.Records used to maintain wages: It maintain records regarding wages which are provided to the workers and
employees
3.Records used to maintain sales: Sales record helps business to maintain overall outgoing sales
4. Purchasing records: In purchasing record, all the raw materials which are being purchased by the business are
recorded.
5. Statements of bank: Bank statements cover all the transactions records related with purchase and supply.
6.Statements of credit card: It covers all the expenses, rewards and the due date
7.Cash records: It records the amount of cash which is being maintained by the business for carrying out
operations
8. Calculations, Tax records and GST: In this, record is being maintained related with GST and Tax.
Question 2
List 4 different types of budgets.
1. Operating Budget: In this budget, there is an analysis and forecast of the projected expenses and income in
the specified period of time.
2. Financial Budget: It presents strategy of the company to manage cash flow, expenses, income and assets.
3. Cashflow Budget: It is a means to project when and how cash flows out and come in a business.
4. Master Budget: It is an aggregate of the individual budget of the company being designed to show financial
health and activity of the business.
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Question 3
What is the purpose of preparing a draft budget?
The major aim related with the preparation of the draft budget is to save money and time by developing
appropriate plan regarding finance for the business as well as its ability to set goals related with profit, expense
and sales to get success in the business.
Question 4
What should you do with the feedback from the draft budget?
The feedback which is being received from the draft budget will be first used for the analysis in order to make
some changes required to use it as a final budget. At the time of analysing feedback, consultation must be taken
from other members as well to make changes.
Question 5
List 2 people the final budget might need to be distributed to.
1. Sales manager
2. Head of the department
Question 6
Why is it important for each department head to understand their part of the budget?
Each and every head of the department has the right to know the amount of cost associated with their
department. It is possible to achieve set aims and objectives related with the department but of if the
department goes beyond the prepared budget, there may be several problems related with the finance which
also make an impact on overall working.
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Question 7
Why should all staff have some knowledge of the budget for their area?
All staff must have proper knowledge related with the budget so that they will be able to achieve goals and
objectives in an effective manner and can also take proper decisions related with business goals. They can also
give support to the head of the department to increase performance.
Question 8
Once the final budget has been approved, how often should it be monitored?
After the preparation as well as approval of the final budget, it must be monitored by the company. It will
depend on the structure as well as size of the business; it can be monitored annually or monthly.
Question 9
As well as receiving the final budget the management team should be advised of their reporting duties. What
should their report contain?
In the report, entire report in regards with the budget in addition with the changes which are being done in the
draft budget. In the report, explanation regarding the changes has also been presented in a detailed form.
Report also contains allocation of the budget being done by considering each and every department.
Question 10
Name 2 financial reports you might generate from your accounting system to check your budget against
actual income or expenditure.
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1. Balance report: It is a type of reporting which is being provided by the bank to the customers generally
an organisation or company providing information regarding the balances in the account. This will
support them to know about the overall transactions which are being made by them so as to carry out
business activities.
2. Profit and loss statement: It is the financial statement of an organisation which presents expenses and
revenues at the particular time period. It makes indication that how the transfer of the revenues are
done in net income.
Question 11
Every revenue and expense item on the Profit and Loss Statement should be compared to what?
There is the requirement for each and every expense and revenue item being mentioned in the statement of
profit and loss must be compared with the financial budget. This will support business to find out the losses and
profits as per the prepared budget.
Question 12
When revenue variances occur, why should you talk to the staff to help identify, and find options to
address the issue?
There are many situations when there is the occurrence of the variances in the revenue and budget. These kinds
of variances may create several sorts of issues and problems in the business that may cause decrease in profit
and growth. Staff of the frontline always makes dealing with the customers, so they are aware of all the issues
and problems why the occurrences of the variances are there in relation with the customers. With the support of
the staff, issues and problems can be identified in an easy manner and they can also give necessary suggestions
required to deal with such situations.
Question 13
List 2 factors that can cause variances in staff budgets.
1. Sick or annual leaves: Leaves which are being take by the employee’s makes differentiation in the budget
of the staff.
2. Wages: Wages of each and every worker is different from one another and it creates variance in the budget.
Question 14
List 3 colleagues you may advise if you noticed that there were deviations between your budget and your
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targets.
1. Budget and financial controller
2.Senior managers
3.Head of different departments
Question 15
List 2 ways you might research new approaches to managing your budget.
1. Appropriate staff rostering
2. Finding of better suppliers that can also provide extra services
Question 16
List 3 things you need to include in your budget report, to give the decision maker enough information to do a
clear cost versus benefit analysis of the budget request.
1. There must be provision of the reasons for which the change has been made in the draft of the budget
to make it is a final budget.
2. It must also make inclusion of the different kinds of benefits which are being provided to the
business
3. There must also be explanation of the amount of money which can be saved.
Question 17
If you are cutting expenditure, why must you be careful that the cuts do not cause the level of service and
product to fall?
When the expenditure is being cut down, we must be careful in regards with the various long term issues and
problems that may give problem in the planning of the budget and can lead business to the situation in which
there will be no profit. At the time of cutting expenditure, a financial and budget planner must make analysis of
all sorts of factors that may cause loss to the business.
Question 18
Name an accounting program you can use to help manage budgets.
Businesses can make use of MYOB accounting program in order to manage budgets.
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