Accounting System and Process: Finance Homework Solution

This document provides a detailed solution to an accounting system and process assignment. The solution covers various aspects of accounting, including spreadsheet cell naming, negative number representation, data area and report area segregation in spreadsheets, and IF functions. It further explains periodic versus perpetual inventory systems, the advantages and disadvantages of spreadsheets, and the application of inventory flow assumptions. The assignment also includes bank reconciliation, journal entries for accounts receivable, and methods for estimating bad debts, along with the impact of computers on accounts receivable in the e-commerce industry. Finally, the solution analyzes a scenario involving credit sales and partial payments, along with an overview of Wesfarmers, including its sustainability issues, financial performance (net profit, working capital ratio, and earnings per share), and a conclusion with recommendations for investors. This assignment offers practical examples and explanations to aid in understanding accounting principles.

Running head: ACCOUNTING SYSTEM AND PROCESS
Accounting system and process
Name of the university
Subject code and name
Student name and student ID number
Assignment task number
Author note

ACCOUNTING SYSTEM AND PROCESS 1
Table of Contents
Answer 1.................................................................................................................................................................2
Answer 3.................................................................................................................................................................4
Answer 4.................................................................................................................................................................5
Answer 5.................................................................................................................................................................6
Answer 6.................................................................................................................................................................7
Answer 7.................................................................................................................................................................7
Answer 8.................................................................................................................................................................8
Answer 9...............................................................................................................................................................10
Answer 10.............................................................................................................................................................11
Answer 11.............................................................................................................................................................11
Answer 12.............................................................................................................................................................11
Question 13...........................................................................................................................................................12
References and Bibliographies..............................................................................................................................16

ACCOUNTING SYSTEM AND PROCESS 2
Answer 1
Naming the cells of spreadsheet
If the user uses the names for spreadsheet cell it will enable him to use the sheet in easier way and input
the formulas easily. It will also allow editing and updating the cells easily and can be used for putting various
ranges, functions, table and analysis (Hoyle, Schaefer & Doupnik, 2015).
Example
Normal view –
Formula view –

ACCOUNTING SYSTEM AND PROCESS 3
Answer 2
Negative numbers
Negative numbers are shown in bracket rather than putting minus sign in front of the number to make it
more visible and showing it distinctly from the positive numbers. It will help the users to identify the negative
numbers more easily (Drury, 2013).
Example of showing negative numbers in bracket

ACCOUNTING SYSTEM AND PROCESS 4
Answer 3
Data area and report area
The data area and the report in the excel spreadsheet must be segregated to present it more clearly and
useful manner for the users. All the raw data are put into the data area and all the processed data are put into the
report area. This enables the user to make difference between the processed data and unprocessed data
(Armitage & Webb, 2013).
Normal view –

ACCOUNTING SYSTEM AND PROCESS 5
Formula view –

ACCOUNTING SYSTEM AND PROCESS 6
Answer 4
IF functions
YouTube video reference explaining IF functions - https://www.youtube.com/watch?v=iKN-QpBLkyM
IF function – it signifies whether the particular function is fulfilled or not. When the condition satisfied it
returns TRUE value and when the condition is not satisfied it returns FALSE value (Carraher & Van Auken,
2013).
Example
Normal view –

ACCOUNTING SYSTEM AND PROCESS 7
Particulars Amount Result
Sales revenue 100000
Less: Expenses
Salary and wages 35000
Interest expenses 15000
Depreciation 10000
Total expenses 60000
Net profit before tax 40000
Less: Tax expenses 12000
Net profit after tax 28000 Profit
Formula view –
Particulars Amount Result
Sales revenue 100000
Less: Expenses
Salary and wages 35000
Interest expenses 15000
Depreciation 10000
Total expenses =SUM(C7:C9)
Net profit before tax =C5-C10
Less: Tax expenses =C11*30%
Net profit after tax =C11-C12 =IF(B13>0,"Profit","Loss")
Answer 5
Periodic versus perpetual inventory
Periodic system of inventory takes the count of inventory and measures the COGS occasionally rather
than tracking and measuring the inventory on continuous basis like perpetual system of inventory (Bebbington,
Unerman & O'Dwyer, 2014). The stock under the perpetual system is updated automatically as the inventories
are measured on continuous basis. Food video used the periodic system of inventory (Chołodowicz &
Orłowski, 2015).
Example of the periodic inventory –
COGS = Opening inventory + Purchases – Closing inventory
If, Opening balance on 01-01-2017 = $ 1,000
Purchases made = $ 5,000
Closing balance on 31-12-2017 = $ 4,000
Then, COGS = $ 1,000 + $ 5,000 - $ 4,000 = $ 2,000

ACCOUNTING SYSTEM AND PROCESS 8
Example of perpetual inventory –
In a school library stock of books are updated whenever there is issue of any book purchase of any new book.
Answer 6
Financial report and the worksheet
Introduction – spreadsheet is the electronic document under which the data is input and arranged in columns
and rows of the grid that can be updated, edited, manipulated or used for the purpose of calculations.
Discussions – the spreadsheet has various disadvantages and disadvantages to the users as follows –
Advantages – users of the spreadsheet can easily maintain and keep a track of large number of data through
spreadsheet. It also helps the users to make calculations using formulas very easily and the user further can
easily edit, update, delete and add data in the spreadsheet as per his requirements. Moreover the cells of the
spreadsheet can be copied to the doc file, if required. Further, the templates included in the spreadsheet contain
formulas that can be used for repetitive type of task which in turn enhance the productivity.
Disadvantages – the main disadvantage of spreadsheet is that generally one sheet is used by individual person
and if more than one person is working on same assignment then every person will make their individual report
that may lead to data duplication. It will waste the time and effort of the people. Further, using the spreadsheet
efficiently needs special training and knowledge (Golyagina & Valuckas, 2016).
Conclusion – from the above analysis it is concluded that the spreadsheet can be used as a important tool for
carrying out daily business operation. Irrespective of some disadvantages the spreadsheet can be a useful tool
for maintaining business data if used by a person with appropriate knowledge.
Answer 7
Application of inventory flow assumption
Requirement 1
Calculation of ending inventory and cost of goods sold (Bragg, 2013).
Requirement 2
Calculation of Gross profit

ACCOUNTING SYSTEM AND PROCESS 9
Answer 8
Bank reconciliation
Normal view
Formula view

ACCOUNTING SYSTEM AND PROCESS 10

ACCOUNTING SYSTEM AND PROCESS 11
With changed data –
Normal view –