ACC 566: Accounting System and Procedure: Detailed Analysis

This assignment, prepared by a student, addresses various aspects of accounting systems and procedures. The solution begins with spreadsheet analysis, including the use of "IF" functions, and then delves into the differences between perpetual and periodic inventory systems. It covers how spreadsheets are used in accounting, including their advantages and disadvantages. The assignment includes a bank reconciliation exercise, providing both normal and formula views. Furthermore, it explores bad debt methods, comparing the direct write-off and allowance methods. The assignment also touches on the role of computers in online retailing and concludes with an analysis of the balance scorecard, using Qantas as a case study to evaluate its financial performance and non-current assets.

Running head: ACCOUNTING SYSTEM AND PROCEDURE
Subject Code: ACC 566
Subject Name: Accounting System and Procedure
Name of the Student
Assignment Task Number 2
List of Questions Attempted- 13
List of Questions Not Attempted - 0

ACCOUNTING SYSTEM AND PROCEDURE
Table of Contents
Answer to question 1:.................................................................................................................2
Answer to question 2:.................................................................................................................2
Answer to question 3:.................................................................................................................2
Answer to question 4:.................................................................................................................3
Answer to question 5:.................................................................................................................4
Answer to question 6:.................................................................................................................5
Answer to question 7:.................................................................................................................5
Answer to question 8:...............................................................................................................10
Answer to question 9:...............................................................................................................15
Answer to question 10:.............................................................................................................16
Answer to question 11:.............................................................................................................16
Answer to question 12:.............................................................................................................17
Answer to question 13:.............................................................................................................17
Reference List:.........................................................................................................................21
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ACCOUNTING SYSTEM AND PROCEDURE
Answer to question 1:
In the below stated computations the reference of the spread sheet is replaced with the
names in each of the specific cells in the spreadsheet. The primary objective of these
replacement is the to facilitate the ease of convenience and association with the calculations
of the numbers in the excel spreadsheet. The below stated tabular representations provides the
illustrations of replacement of the cell with reference to the names;
Particulars Amount (in $)
Sales 125,000
Cost of goods sold 95,000
Gross Income 30,000
Answer to question 2:
The numbers that are negative is generally exemplified in the spreadsheet with the
help of brackets in red and the same is particularly executed in the below stated illustrations
Figure 1: Figure representing illustrations of negative numbers
(Source: Williams, 2014)
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Answer to question 3:
For the accountants in the spreadsheet a separated bookkeeping or entry of data is
required and the reason for this is that it helps in depicting single view of every single row.
Consequently, for report a distinct area for report is necessary to help the accountants in
preparing the detailed reports along with the required data source (Williams, 2014). The
range of data entry is put into use to record the raw data, whereas the portion of report is put
into use for converting the record into a meaningful information.
An important assertion in this regard is that a distinct area for record keeping is
required to be created so that incorrect bookkeeping of the raw data is recorded in the
spreadsheet. Hence, the procedure of creating a parting enables stress-free recording of the
raw data together and helps in eliminating the needless information. The below stated
spreadsheet illustrations is provided below;
Figure 2: Figure representing separate data entry areas and reports in the spreadsheets
(Source: Williams, 2014)
Answer to question 4:
The “IF” functions helps in providing anticipated intelligence to the program with the
help of which the program would be able to take the decision in respect of the developed
criteria and determining course of the program. As stated by Deegan (2016), the “IF”
function can be defined as the function that assist in examining whether or not the conditions
is attained. Most importantly the “IF” functions helps in returning the singular value and
satisfies the criteria then it will be true and alternatively if the criteria is not met then the
value will be false. An example of spreadsheet is obtained with the help of “IF” functions
which is stated below;
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ACCOUNTING SYSTEM AND PROCEDURE
Figure 3: Figure illustrating the IF functions
(Source: Warren & Jones, 2018)
Answer to question 5:
Perpetual Inventory System Periodic Inventory System
Under the perpetual inventory system there
is constant updates in the general ledger or
the inventory journal because inventory
related transactions take place (Warren &
Jones, 2018).
Under the periodic inventory system, cost of
goods sold accounting entry is not recorded
during the accounting period till the
physical count takes place which is later
derived to compute the cost of goods sold.
It is not possible to physically maintain the
records for the perpetual inventory system
because there could be numerous
transactions at the unit level during the
accounting period.
Under the periodic inventory system, it
enables the users to manually record the
accounts for each small inventories.
In the perpetual inventory system there is a
constant updates to the cost of goods sold
when each unit of the sales is made.
In the periodic inventory system the cost of
goods sold is computed in lump sum at the
end of the accounting period (Henderson et
al., 2015).
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Answer to question 6:
Under any form of accounting role an individual can obtain the benefit from using the
spreadsheet in day to day task. Spreadsheet helps in easy tracking of payment for small
business owners. The owners of small business are new to accounting and may find it
difficult in tracking the payments, spreadsheet helps offering easy solution of tracking
payments. Spreadsheet helps in commonly using the analysis of money which is spent and
income that has been received (Pratt, 2016). Spreadsheet enables an individual to split the
amount of cash that business has received and received during the time period and source.
Additional advantage of using the spreadsheet is that business can link the worksheets
together and it is useful in determining cash flow. However, one of the disadvantage of
spreadsheet in accounting is that it is vulnerable to fraud which might result in million dollar
losses and also it lacks control.
Answer to question 7:
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ACCOUNTING SYSTEM AND PROCEDURE
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ACCOUNTING SYSTEM AND PROCEDURE
Formula View:
Average Method
Date Purchase Cost of Sales Balance Inventory
Un
it
Co
st
pe
r
Un
it
(in
$)
Total
Amou
nt (in
$)
Unit Co
st
per
Uni
t
(in
$)
Total
Amou
nt (in
$)
Unit Cost
per
Unit
(in $)
Total
Amount (in
$)
='Q2-
11-
NV'!
C7
80 57 =K6*L6
='Q2-
11-
NV'!
C8
10 65 =E7*F
7
80 =L6 =K7*L7
10 65 =K8*L8
=SUM(K7:
K8)
=M9/
K9
=SUM(M7:
M8)
='Q2-
11-
NV'!
C11
30 70 =E10*
F10
=K9 =L9 =K10*L10
=E10 =F10 =K11*L11
=SUM(K10:
K11)
=M12/
K12
=SUM(M10:
M11)
='Q2-
11-
NV'!
C14
70 72 =E13*
F13
=K12 =L12 =M12
=E13 =F13 =K14*L14
=SUM(K13:
K14)
=M15/
K15
=SUM(M13:
M14)
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ACCOUNTING SYSTEM AND PROCEDURE
='Q2-
11-
NV'!
C17
=K1
5-
K16
=L
16
=H16*
I16
115 =L15 =K16*L16
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ACCOUNTING SYSTEM AND PROCEDURE
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ACCOUNTING SYSTEM AND PROCEDURE
Answer to question 8:
Normal View
Bank Reconciliation
31-07-2017
Account Description General Cash Prepared
By
GL Account Number Reviewed
By
Bank Account Number
Balance Per Bank
Statement 24,009.00
Add: EFT Rent Received 700
EFT Insurance payment 400
Deposits in Transit 4567.00
NFS Cheque from
customers
2300.00
Bank Service charges 78.00
Note Receivables 2345.00
9,690.00
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ACCOUNTING SYSTEM AND PROCEDURE
Subtract:
Checks Issued Not Cleared 1789.00
Checks Issued Not Cleared 650.00
Checks Issued Not Cleared 320.00
(2,759.00)
Other:
A
Book error cheque 78.00
78.00
Balance Per Bank Ledger
31,018.00
Bank Reconciliation
31-07-2017
Account
Description
General Cash Prepare
d By
GL Account
Number
Reviewe
d By
Bank Account
Number
Balance Per Bank
Statement 25,000.00
Add: EFT Rent
Received
750
EFT Insurance
payment
500
Deposits in Transit 6587.00
NFS Cheque from
customers
2500.00
Bank Service
charges
90.00
Note Receivables 3545.00
13,222.00
Subtract:
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ACCOUNTING SYSTEM AND PROCEDURE
Checks Issued Not
Cleared
2100.00
Checks Issued Not
Cleared
700.00
Checks Issued Not
Cleared
300.00
(3,100.00)
Other:
B
Book error cheque 95.00
95.00
Balance Per Bank
Ledger 35,217.00
Bank Reconciliation Statement Formula View:
Bank Reconciliation
31-7-2017
Account
Description
General Cash Prepa
red
By
GL Account
Number
Revie
wed
By
Bank
Account
Number
Balance Per
Bank
Statement
24009
Add: EFT Rent
Received
700
EFT
Insurnace
payment
400
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Deposits in
Transit
4567
NFS Cheque
from
customers
2300
Bank Service
charges
78
Note
Receivables
2345
=SUM(OFFSET(J19,-1,-
1,MATCH("Add:",E$1:E$104,0)-ROW()
+1))
Subtract:
Checks
Issued Not
Cleared
1789
Checks
Issued Not
Cleared
650
Checks
Issued Not
Cleared
320
=-SUM(OFFSET(J24,-1,-
1,MATCH("Subtract:",E$1:E$104,0)-
ROW()+1))
Other:
A
Book error
cheque
78
=SUM(OFFSET(J28,-1,-
1,MATCH("Other:",E$1:E$104,0)-ROW()
+1))
Balance Per
Bank
Ledger
=SUM(OFFSET(J30,-
1,,MATCH("Balance Per Bank
Statement",E$1:E$104,0)-ROW()))
Bank Reconciliation
31-7-2017
Account
Description
General Cash Prepa
red
By
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ACCOUNTING SYSTEM AND PROCEDURE
GL Account
Number
Revie
wed
By
Bank
Account
Number
Balance Per
Bank
Statement
25000
Add: EFT Rent
Received
750
EFT
Insurnace
payment
500
Deposits in
Transit
6587
NFS Cheque
from
customers
2500
Bank Service
charges
90
Note
Receivables
3545
=SUM(OFFSET(R19,-1,-
1,MATCH("Add:",M$1:M$104,0)-ROW()
+1))
Subtract:
Checks
Issued Not
Cleared
2100
Checks
Issued Not
Cleared
700
Checks
Issued Not
Cleared
300
=-SUM(OFFSET(R24,-1,-
1,MATCH("Subtract:",M$1:M$104,0)-
ROW()+1))
Other:
A
Book error
cheque
95
=SUM(OFFSET(R28,-1,-
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1,MATCH("Other:",M$1:M$104,0)-ROW()
+1))
Balance Per
Bank
Ledger
=SUM(OFFSET(R30,-
1,,MATCH("Balance Per Bank
Statement",M$1:M$104,0)-ROW()))
Answer to question 9:
Answer to question 10:
The two different method of determining the bad debts are the direct write off method
and the allowance method.
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Direct write off method:
In the direct write off method when it is understood that the particular account would
become as uncollectable then the loss will be charged to the “Bad Debt Expenditure
Account” (Marshall, 2016). For example, an organization has considered that a debtor’s
balance of $2500 would become uncollectible on 31 January 2018 and the journal entry is
provided below;
Allowance method:
Under the allowance method, the expenditure arising out of the bad debt is stated in
the comprehensive income statement as the operating expense. The bad debts that are written
off is debited to the allowance account rather than debiting bad debt expenditure expense
account.
Answer to question 11:
In the modern era of technology computers have become an essential element in
online retailing. For example, E-bay has used the potential of computers as the vehicle for
promoting the goods and bagging the sales. More specifically it is argued that E-bay with the
correct mixture of technology and organizational culture would be able to make appropriate
offering of product by contemplating the retail market (Hoskin et al., 2014). Use of
computers for E-bay have become essential because it helps in keeping records products that
have greater growth for potential.
Answer to question 12:
Example Scenario
T-Accounts
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Answer to question 13:
According to Marshall (2016), balance scorecard can be defined as the metric of
assessing the performance that is used a strategic administration procedure for locating and
improving the different forms of integral functions along with the results obtained. Hence, it
is obligatory in offering quantities result because the managers usually interpret the financial
information for making efficient decision making. With the effective of balance scorecard,
Qantas has managed to make sure that the net benefit for its shareholders. Therefore, the use
of balance score card helps in attaining the long term objectives of the Qantas and assist in
improving the financial performance of the firm during the long run.
An extract from the Qantas 2017 report have been taken from the remuneration report
of the company;
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Figure 4: Figure representing Remuneration Report of Qantas
(Source: Investor.qantas.com, 2018)
The total amount of remuneration for the year ended 2016 and 2017 for Qantas stood
$21,649 and $20,460 respectively. With the appointment of the Gareth Evans Qantas as the
CEO of the company has helped in increasing the marketing strategies of the company.
Additionally, on analysing the financial report of Qantas it is understood that Qantas has been
delivering stellar revenue growth and the company is becoming into the profitable unit.
Additionally, non-current assets for the Qantas has been selected and the figures are
presented in the following form with the help of charts and data entry;
Particulars 2016 2017
Non-Current Assets:
Receivables 134 123
Other financial assets 46 43
Investments accounted for under the equity method 197 214
Property, plant and equipment 11,670 12,253
Intangible assets 909 1025
Deferred tax assets 39 -
Other 252 444
Total Non-Current Assets 13,247 14,102
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Receivables
Other financial assets
Investments accounted for under the equity
method
Property, plant and equipment
Intangible assets
Deffered tax assets
Other
0% 20% 40% 60% 80% 100%
Items of non-current assets of
Qantas
2016
2017
Figure 5: Figure representing the Non-Current Assets of Qantas
(Source: As Created by Author)
134; 1%46; 0%197; 1%
11670; 88%
909; 7%39; 0%252; 2%
Items of non-current assets of Qantas
in 2017
Receivables Other financial assets
Investments accounted for under the
equity method Property, plant and equipment
Intangible assets Deffered tax assets
Other
Figure 6: Chart representing the Non-Current Assets of Qantas
(Source: As Created by Author)
As per the analysis performed above, the share of the non-current assets has increased
and it is advised that the investors should make an investment in the shares of Qantas.
Additionally, the organization has reported a better liquidity position as understood from the
figures reported by the firm (Investor.qantas.com, 2018). Qantas has also reported the
underlying profit before tax of $1,401 million during the year 2016-17 and the company rates
the profit as the second highest performance over the last 97 years’ history operations. The
result states that the company has maintain the advantage over the local and the global
competitors that has been underpinned by the completion of the three year of transformation
program. In addition to this, the international operations of the firm have experienced higher
degree of capacity growth and also witnessed an improvement in the EBIT of $327 million.
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It is noticed that Qantas sells air miles to the supermarkets and other retail partners.
Each unit of the Qantas sells generates profit for the company since its cost less to the
company to redeem these points and selling them. Qantas has also witnessed increasing
growth in the tourist numbers and rise in revenue from the loyalty business. The airline
industry has of late been very attractive and the analyst have predicted their $4.30 price target
on the shares of Qantas. This kind of price target reveals that there is a potential of increase in
34% of the current share price. With the price of oil remaining low it its believed that
investors would benefit from boom in the international tourism. Overall, an assertion can be
bought forward by stating that Qantas is a good investment prospect at the present price for
the investors.
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Reference List:
Deegan, C. (2016). Financial accounting. McGraw-Hill Education Australia.
Henderson, S., Peirson, G., Herbohn, K., & Howieson, B. (2015). Issues in financial
accounting. Pearson Higher Education AU.
Hoskin, R. E., Fizzell, M. R., & Cherry, D. C. (2014). Financial Accounting: a user
perspective. Wiley Global Education.
Marshall, D. (2016). Accounting: What the numbers mean. McGraw-Hill Higher Education.
Pratt, J. (2016). Financial accounting in an economic context. John Wiley & Sons.
Qantas | 2017 Annual Report. (2018). Investor.qantas.com. Retrieved 15 January 2018, from
http://investor.qantas.com/annual-report-2017/
Warren, C. S., & Jones, J. (2018). Corporate financial accounting. Cengage Learning.
Williams, J. (2014). Financial accounting. McGraw-Hill Higher Education.
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