Accounting Systems and Processes

This assignment delves into the fundamental concepts of accounting systems and processes. It covers various aspects such as cell naming in spreadsheets, displaying negative numbers, using IF functions, periodic inventory systems, and spreadsheet applications for economic reports. The document also explores bank reconciliation, accounts receivable, allowance method vs. direct method for bad debts, analyzing company performance with examples like Wesfarmers Limited, and discussing risk management and corporate governance principles.

Running head:SYSTEMS AND PROCESSES OF ACCOUNTING
SYSTEMS AND PROCESSES OF ACCOUNTING
Name of the Student:
Name of the University:
Author Note:

2ACCOUNTING SYSTEMS AND PROCESSES
Table of Contents
Answer of Question 1......................................................................................................................4
Answer of Question 2......................................................................................................................4
Answer of Question 3......................................................................................................................5
Answer of Question 4......................................................................................................................6
IF Functions Importance..................................................................................................................6
Answer of Question 5......................................................................................................................7
Periodic inventory systems..............................................................................................................7
Answer of Question 6......................................................................................................................7
Spreadsheet and economic reports...................................................................................................7
Answer of Question 7....................................................................................................................14
Answer of Question 8....................................................................................................................18
Bank reconciliation........................................................................................................................18
Answer of Question 9....................................................................................................................20
Accounts receivable.......................................................................................................................20
Answer of Question 10..................................................................................................................21
Answer of Question 11..................................................................................................................22
Answer of Question 12..................................................................................................................22
Dishonor of a note receivable........................................................................................................22

3ACCOUNTING SYSTEMS AND PROCESSES
Answer of Question 13..................................................................................................................22
References......................................................................................................................................26

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Answer of Question 1
Cells naming in spreadsheets
To avoid misunderstandings in a spreadsheet, it is necessary to give name to each cell of
a spreadsheet. Thus naming each cell will help to recognize and link it with the case which is
important to crack calculations.
Answer of Question 2
Negative numbers
Spreadsheets show the numbers which are considered as negative one, shown by brackets
with minus sign or with a red color.

5ACCOUNTING SYSTEMS AND PROCESSES
Answer of Question 3
Spreadsheet of data and report areas
Spreadsheets used by accountant’s in a different manner with entirely different data
entry area along with different report area to trim down error that crop up while analyzing
financial study. Design of spreadsheets is a significant mechanism because it helps to achieve
sustainable success in both short term and long term. Usage of spreadsheets usually help
accountants to reach flexible results, it also helps in analyzing, enhancing and optimizing the
performance level of business organization. Although, risks is also associated with spreadsheet
because it can arise incorrect information that leads to weak decision making activities. In order
to reduce risk, accountants should follow design and developmental practices. Spreadsheets, thus
regarded as important tool since it makes works easier and for this reason they enter into the
entries in different report area in organized manner. This tool also helps in recording of a record
in a suitable manner.

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Answer of Question 4
IF Functions Importance
IF function, is mainly recognized as command that highlight statements that are true or
false. Function mainly explores condition which matches the validity of the command or not. If
condition matches the command then the conclusion reached will be regarded as per the logical
value. On the other hand, if condition does not matches the command then outcome reached is
different from logical values (Sandberg & Wright,2014).

7ACCOUNTING SYSTEMS AND PROCESSES
Answer of Question 5
Periodic inventory systems
Periodic inventory systems generally records inventory on a periodic basis which means
the end of accounting period.
Answer of Question 6
Spreadsheet and economic reports
Normal view

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Formula view shown

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Particulars Amount Amount
Current Assets:
Cash =J8
Accounts Receivable =J9
Closing Inventory =F40
Supplies =J11
TOTAL CURRENT ASSETS =SUM(C95:C98)
Non-Current Assets:
Building =J12
Less: Accumulated Depreciation =-K13 =B102+B103
Furniture =J14
Less: Accumulated Depreciation =-K15 =B104+B105
TOTAL NON-CURRENT ASSETS =SUM(C103:C105)
TOTAL ASSETS =C99+C106
Current Liabilities:
Accounts Payable =K16
Salary Payable =K17
Interest Payable =K18
Unearned Sales Revenue =K19
TOTAL CURRENT LIABILITIES =SUM(C111:C114)
Non-Current Liabilities:
Notes Payable, Long Term =K20
TOTAL NON-CURRENT LIABILITIES =SUM(C116:C118)
TOTAL LIABILITIES =C119+C115
NET ASSETS =C108-C121
Equities:
Capital =K21
Add: Net Profit =K41
=B126+B127
Less: Drawings =-J22 =B128+B129
TOTAL EQUITIES =SUM(C125:C129)
for the period ended….
In the Books of Fancy Footwear
Balance Sheet

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Answer of Question 7
Original data
Normal view shown
Particulars
Average
Cost FIFO LIFO
Beginning Inventory $3,420 $3,420 $3,420
Net Purchases $7,790 $7,790 $7,790
Cost of Goods Available $11,210 $11,210 $11,210
Ending Inventory $7,583 $8,075 $7,250
Cost of Goods Sold $3,627 $3,135 $3,960
Calculation of Gross Profit:-
Particulars
Average
Cost FIFO LIFO
Sales Revenue $25,000 $25,000 $25,000
Less: Cost of Goods Sold $3,627 $3,135 $3,960
GROSS PROFIT $21,373 $21,865 $21,040
Calculation of Gross Profit:-
Formula used

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Particulars Average Cost FIFO LIFO
Sales Revenue 25000 =B6 =C6
Less: Cost of Goods Sold 3627 3135 3960
GROSS PROFIT =B6-B7 =C6-C7 =D6-D7
Particulars Average Cost FIFO LIFO
Beginning Inventory 3420 3420 3420
Net Purchases 7790 7790 7790
Cost of Goods Available =B17+B18 =C17+C18 =D17+D18
Ending Inventory 7583 8075 7250
Cost of Goods Sold =B19-B20 =C19-C20 =D19-D20
Calculation of Gross Profit:-
Calculation of Gross Profit:-
Workings
Date Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount
1-Oct 60 $57 $3,420
3-Oct 10.00 $65 $650 60 $57 $3,420
10 $65 $650
70 $58 $4,070
12-Oct 30 $70 $2,100 70 $58 $4,070
30 $70 $2,100
100 $62 $6,170
18-Oct 70 $72 $5,040 100 $62 $6,170
70 $72 $5,040
170 $66 $11,210
31-Oct 55 $66 $3,627 115 $66 $7,583
Inventory Ledger (Average Method):
Purchase Cost of Goods Sold Balance Inventory

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Date Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount
1-Oct 60 $57 $3,420
3-Oct 10 $65 $650 60 $57 $3,420
10 $65 $650
12-Oct 30 $70 $2,100 60 $57 $3,420
10 $65 $650
30 $70 $2,100
18-Oct 70 $72 $5,040 60 $57 $3,420
10 $65 $650
30 $70 $2,100
70 $72 $5,040
31-Oct 55 $57 $3,135 5 $57 $285
10 $65 $650
30 $70 $2,100
70 $72 $5,040
31-Oct 55 $3,135 115 $8,075
Inventory Ledger (FIFO Method):
Purchase Cost of Goods Sold Balance Inventory
Date Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount
1-Oct 60 $57 $3,420
3-Oct 10 $65 $650 60 $57 $3,420
10 $65 $650
12-Oct 30 $70 $2,100 60 $57 $3,420
10 $65 $650
30 $70 $2,100
18-Oct 70 $72 $5,040 60 $57 $3,420
10 $65 $650
30 $70 $2,100
70 $72 $5,040
31-Oct 55 $72 $3,960 60 $57 $3,420
10 $65 $650
30 $70 $2,100
15 $72 $1,080
31-Oct 55 $3,960 115 $7,250
Inventory Ledger (LIFO Method):
Purchase Cost of Goods Sold Balance Inventory
Revised

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Answer of Question 8
Bank reconciliation
Original view

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Normal view
Date Particulars Amount
30/4 Bank Balance as per Pass Book $19,670
Add:
Deposit in Transit $1,543
EFT Insurance Payment $300
Book Error Cheque 1419 $340
NSF Cheque from Customer $1,700
Bank Service Charge $40 $3,923
$23,593
Less:
Outstanding Cheques 2462
EFT Rent Receipt 600
Note Receivable $1,500
$4,562
30/04 Cash Account Balance as of 30th April $19,031
Bank Reconcilaition Statement
As on 30th April
Formula used shown
Date Particulars Amount
30/4 Bank Balance as per Pass Book 19670
Add:
Deposit in Transit 1543
EFT Insurance Payment 300
Book Error Cheque 1419 340
NSF Cheque from Customer 1700
Bank Service Charge 40 =SUM(D8:D12)
=E6+E12
Less:
Outstanding Cheques =1532+700+230
EFT Rent Receipt 600
Note Receivable 1500
=SUM(D15:D18)
30/04 =IF(E20>0,"Cash Account Balance as of 30th April","Bank Overdraft Balance as of 30th April") =E13-E18
Bank Reconcilaition Statement
As on 30th April
Revised

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Answer of Question 9
Accounts receivable

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Answer of Question 10
Direct method
Allowance method

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Answer of Question 11
Companies operations matches with that of bank and this is because bank inquire
individuals for a assurance and information about their personal belongings and liabilities and
the same operations are true for companies. While undertaking in investments, investors must
gather information about the company that is considered for investment. Trend analysis and
usage of other tools can be considered to predict future in a optimal way for predicting how the
company will perform in the coming 5 to 10 years (Jarzabkowski & Kaplan,2015)..
Answer of Question 12
Dishonor of a note receivable
Answer of Question 13
The discussion that evolve here is on Australian retail giant, Wesfarmers Limited that
functions in various areas such as retail and energy. Earnings earned by the companies are a

23ACCOUNTING SYSTEMS AND PROCESSES
matter of attribution to their member and the condition holds in case of Wesfarmers. It is seen
that company involved in foreign currency usage for their operations that amount $15 million
and represent cash hedging activities and reserve hedge. Moreover, it is recognized that the
company incurs a loss of around $78 million. The company thus need to pay dividend sum of
$2600 on time.
Equity return is regarded as profitability ratio which show the profitability condition of
business enterprise. The above table shows that Wesfarmers Limited has low return on equity
which is 0.018, this is regarded as poor financial or profitable condition for the company.
Earnings per share of Wesfarmers Limited reaches 36.2% and this is measured by using
weighted average numbers for the ordinary share.
While representing the characteristic of risk and mitigation management it is viable that
companies do not reveal information about thier financial statements Wesfarmers Limited had
not allotted any of the individual who can set up financial statements that complies with AASB
conceptual framework.
Now the concept of Corporate Governance, Wesfarmers Limited is in the third edition of
ASX Corporate Governance.

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Working capital ratio
Net profit after tax

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Vikram thus is encouraged to undertake investment in Wesfarmers Limited as the company is in
steady condition and there is continuous flow of net profit from the year 2012 to 2016.

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References
Jarzabkowski, P., & Kaplan, S. (2015). Strategy tools‐in‐use: A framework for understanding
“technologies of rationality” in practice. Strategic Management Journal, 36(4), 537-558.
Sandberg, K., & Wright, G. (2014). Introduction to MATLAB. University of Colorado.
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