Accounting System Assessment 2: Financial Accounting Concepts

This document is an assessment solution that covers various aspects of financial accounting. It begins by explaining cell naming conventions in spreadsheets and how they facilitate formula usage. It then addresses the representation of negative numbers in financial reports, including different formatting options. The solution emphasizes the importance of separating data and report areas for clear financial statement presentation, illustrated with examples. The role of IF functions in spreadsheet calculations is explained with examples. The differences between perpetual and periodic inventory systems are discussed, along with related spreadsheet applications. The assessment also explores the creation of worksheets and financial reports, including an executive summary, introduction, body context, and conclusion. Additionally, the solution covers inventory flow assumptions, bank reconciliation processes, journalizing accounts receivable entries, estimating bad debts, evaluating a firm's financial position, and the handling of dishonored notes receivable. Finally, a work-integrated assessment is included. The solution is a comprehensive guide to financial accounting concepts and practices.

RUNNING HEAD: Accounting system 1
Accounting System
Assessment 2
[Pick the date]
Student’s Name

Accounting system 2
Contents
Que 1..........................................................................................................................................4
Naming cells in spreadsheet...................................................................................................4
Spreadsheet.............................................................................................................................4
Que 2:.........................................................................................................................................4
Negative numbers.......................................................................................................................4
Spreadshee..............................................................................................................................5
Que 3..........................................................................................................................................5
Separation of data and report areas............................................................................................5
Que 4..........................................................................................................................................7
IF functions................................................................................................................................7
Spreadsheet:............................................................................................................................7
Que 5:.......................................................................................................................................13
Perpetual versus periodic system.............................................................................................13
Spreadsheet:..........................................................................................................................13
Perpetual inventory system......................................................................................................13
Periodic Inventory system:.......................................................................................................14
Que 6:.......................................................................................................................................14
Worksheet and financial reports:.............................................................................................14
Introduction..........................................................................................................................14
Body context.........................................................................................................................14
Conclusion:...........................................................................................................................14
Que 7:.......................................................................................................................................19
Application of inventory flow assumptions:............................................................................19
Que 8:.......................................................................................................................................26
Bank Reconciliation:................................................................................................................26

Accounting system 3
Changes................................................................................................................................27
Que 9:.......................................................................................................................................28
Journalizing accounts receivable entries:.................................................................................28
Que 10:.....................................................................................................................................29
Estimating Bad debts:..............................................................................................................29
Que 11:.....................................................................................................................................30
Evaluation of firm’s financial position:...................................................................................30
Que 12:.....................................................................................................................................30
Dishonor of a note receivable:.................................................................................................30
Que 13:.....................................................................................................................................31
Work integrated assessment:....................................................................................................31
References:...............................................................................................................................32

Accounting system 4
Que 1:
Naming cells in spreadsheet:
In case of spreadsheet, a tool is there to make change in the cell references. The cell
references could be changed by any name. It depends on the user that what name s easier and
suitable for the spreadsheet. On the basis of this naming tool, it is easier for the user to use
formulas and calculate the figures (Stratton, SAS Institute Inc., 2009). Naming tools assist the
user to reduce the level of error. This tool could be used in auditing, administrating, updating
etc the figures and the calculations in good manner. It also assists in calculating the normal
values and accounting values easily. Few examples have been given below of naming cells
on the basis of which naming cells could be understood:
Example Type Example with no name Example with a name
Table C4:G25 =TopSales06
Constant =Product(C5, 10.4) =Product(Price,
WASalesTax)
Spreadsheet:
Normal view:
Statement of profit
(Amt in
$)
Sales 1000
Expenses 500
Profit 500
Formula view:
3
4
5
6
7
B C
(Amt in $)
Sales 1000
Expenses 500
Profit =(Sales-Expenses)
Statement of profit

Accounting system 5
Que 2:
Negative numbers:
Negative numbers explains about the numbers which have values in minus. Negative
numbers could be presented in various manners in a spreadsheet such as in brackets, in red
color and with minus mark. Negative numbers basically explains about the credit amount of
an organization. To represent the negative numbers in the report, accountant normally prefers
to use “ ()” (brackets) form as it makes the report attractive as well as it makes the report
more competitive (Snyder and Davenport, 2013). Though, red color also reflects about the
better financial report. In red color transition, it becomes easy to find the negative number.
Spreadsheet:
Negative values in minus sign
(amt in
$)
Sales 10000
Less: expenses -5000
gross Profit 5000
Less: operating
expenses -2000
Operating profit 3000
Less: interest -500
Net profit 2500
Negative values in ()
(amt in
$)
Sales 10000
Less: expenses (5,000)
gross Profit 5000
Less: operating
expenses (2,000)
Operating profit 3000
Less: interest (500)
Net profit 2500
Que 3:
Separation of data and report areas:

Accounting system 6
Report and spreadsheet, both are essential files and tool for an auditor and the
accountant of an organization. Both the files offer different information to the related parties
and the usefulness of both the files are also different. Spreadsheets are mainly prepared by the
accountants to calculate the accounting figure and prepare the financial data of the company
whereas the report part analyzes the financial statement and briefs about the performance of
the company. Spreadsheet is used by the accountant to reduce the level of errors and present
better financial reports (Hoque, 2002).
A report and spreadsheet file must be prepared separately as it is quite helpful for all
the internal and external stakeholders to evaluate the financial statement or analyze the
statements in a better way.
Tendulkar Manufacturing Company
Manufacturing Account
For the year ended 30 September, 2017
Particular
Amount
($) Particular
Amount
($)
Direct Material Closing Stock:
Opening Stock: Raw Material 16000
Raw Material 110000 Work in Progress 7000
Work in Progress 15000
Purchases:
Cost of Goods
Sold 1026000
Raw material 500000
Carriage Inward 22000
Direct labour 130000
Direct Expenses
Depreciation 9000
Factory Insurance 3000
Manufacturing overhead
Manufacturing Expense 60000
Factory Salary 200000
1049000 1049000
Tendulkar Manufacturing Company
Income Statement

Accounting system 7
For the year ended 30 September, 2017
Particular
Amount
($) Total
Revenues
Sales 1696000
Other Income 0
Total Income (A) 1696000
Expenses
Cost of goods sold 1026000
Salary 100000
Accrued Salary 700
General expenses 23000
Audit Fee 3000
Advertisement 12000
Light and Power 12000
Cartage Outwards 5000
Insurance 750
Rates 2250
Sales Commission 40000
Tax 50000
Discount 6000
Total operating expenses
(B) 128000
Net Income (A-B) 415300
Formula view:

Accounting system 8
Particular Amount ($) Particular Amount ($)
Direct Material Closing Stock:
Opening Stock: Raw Material 16000
Raw Material 110000 Work in Progress 7000
Work in Progress 15000
Purchases: Cost of Goods Sold =D21-(D7+D8)
Raw material 500000
Carriage Inward 22000
Direct labour 130000
Direct Expenses
Depreciation =12000*0.75
Factory Insurance =4000*0.75
Manufacturing overhead
Manufacturing Expense 60000
Factory Salary 200000
=SUM(B8:B20) =B21
Tendulkar Manufacturing Company
Manufacturing Account
For the year ended 30 September, 2017

Accounting system 9
24
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33
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36
37
38
39
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41
42
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49
50
51
A B C
Particular Amount ($) Total
Revenues
Sales =1700000-4000
Other Income 0
Total Income (A) =B31+B32
Expenses
Cost of goods sold =D10
Salary 100000
Accrued Salary 700
General expenses 23000
Audit Fee 3000
Advertisement 12000
Light and Power 12000
Cartage Outwards 5000
Insurance =(4000*0.25)-(1000*0.25)
Rates =9000*0.25
Sales Commission 40000
Tax 50000
Discount 6000
Total operating expenses (B) =SUM(B36:B48)
Net Income (A-B) =IF(C33=C49,"no profit no loss",IF(C33>C49,
For the year ended 30 September, 2017
Tendulkar Manufacturing Company
Income Statement
Que 4:
IF functions:
“IF”, function is a spreadsheet’s tool that is used to identify and calculate some
logical calculations in spreadsheet. This function assists a user to use own logics and put it in
formula. This function makes it easier for the user to get different results in different
situation. “IF”, function could be generated on the basis of an individual, below is an example
of the function:
IF (Something is False, then do this, otherwise do something else).

Accounting system 10
Spreadsheet:
Profit:
Normal view:
Tendulkar Manufacturing Company
Income Statement
For the year ended 30 September, 2017
Particular
Amount
($) Total
Revenues
Sales 1696000
Other Income 0
Total Income (A) 1696000
Expenses
Cost of goods sold 1026000
Salary 100000
Accrued Salary 700
General expenses 23000
Audit Fee 3000
Advertisement 12000
Light and Power 12000
Cartage Outwards 5000
Insurance 750
Rates 2250
Sales Commission 40000
Tax 50000
Discount 6000
Total operating expenses
(B) 1280700
Net Income (A-B) Profit/415300
Formula view:

Accounting system 11
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42
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51
A B C
Particular Amount ($) Total
Revenues
Sales =1700000-4000
Other Income 0
Total Income (A) =B31+B32
Expenses
Cost of goods sold =D10
Salary 100000
Accrued Salary 700
General expenses 23000
Audit Fee 3000
Advertisement 12000
Light and Power 12000
Cartage Outwards 5000
Insurance =(4000*0.25)-(1000*0.25)
Rates =9000*0.25
Sales Commission 40000
Tax 50000
Discount 6000
Total operating expenses (B) =SUM(B36:B48)
Net Income (A-B) =IF(C33=C49,"no profit no loss",IF(C33>C49,
For the year ended 30 September, 2017
Tendulkar Manufacturing Company
Income Statement
Loss:
Normal view:
Tendulkar Manufacturing Company
Income Statement
For the year ended 30 September, 2017
Particular
Amount
($) Total
Revenues
Sales 140000

Accounting system 12
Other Income 0
Total Income (A) 140000
Expenses
Cost of goods sold 0
Salary 100000
Accrued Salary 700
General expenses 23000
Audit Fee 3000
Advertisement 12000
Light and Power 12000
Cartage Outwards 5000
Insurance 750
Rates 2250
Sales Commission 40000
Tax 50000
Discount 6000
Total operating expenses
(B) 254700
Net Income (A-B)
loss-
114700
Formula view: