Comprehensive Accounting System and Process Homework Assignment

This document provides a comprehensive solution to an accounting system and process assignment. It addresses plagiarism, methods for pasting spreadsheets, and provides resources for accounting terms. It also covers an organization's accounting standards, computing systems, and the four main components of financial statements. The assignment includes a case study analysis of ABC learning, identifying ethical issues and lessons learned. Furthermore, it covers topics like the balance sheet equation, accounts with debit and credit balances, trial balance, crossword puzzle, end-of-period adjustments, current and non-current liabilities, and the current ratio. The solution includes manual and spreadsheet solutions with relevant formulas and references.

Accounting System and Process
STUDENT ID
[Pick the date]

Question 1
Plagiarism
The process or act when one person is copping the work of any other students/expert and then
submitting that work as his/her work then it is known as plagiarism. In regards to check
plagiarism, many universities have adopted “National Plagiarism Detection Service (Turnitin).
Yes, it can be said that plagiarism/ collusion is unfair to honest students because of the following
reasons:
 One student is getting an advantage of the hard work done by an honest student by stealing
their work
 When the first student (fraud) has submitted the work before the submission made by honest
student then the original work is named as first student’ work. Also, when the honest student
submits the work then it causes high percentage of plagiarism and it seems that this student
has copied work from other student. But in actuality the work is completed by honest student.
It is apparent that it results unfair means with the honest students.
Question 2
The two methods to paste computer spreadsheets into a word document are as given below:
 First method is to select the desire area of the spreadsheet and then CTRL+C, and then paste
in the word document by using paste special – formatted text.
 Second method is to select the desire area of the spreadsheet and then CTRL+C, and then
paste in the word document. In this type, one can edit in the copied spreadsheet.
Normal view
Returns (%) Returns (%) Returns (%) Excess
Returns Excess Returns
Yahoo Google S & P Market Yahoo (Preferable
Stock)
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0.0632 8.7274 1.2519 -0.2401 -1.4288
-7.8098 7.9127 1.9571 0.3951 -9.3718
8.6898 9.6505 2.3947 0.7577 7.0528
5.2419 -10.3521 -1.9988 -3.6848 3.5559
10.8503 2.6215 0.2843 -1.3217 9.2443
5.8460 1.2819 0.7043 -1.0517 4.0900
Formula view
Select the desire portion of spreadsheet – Go to formula – show formula
Returns (%) Returns (%) Returns (%) Excess
Returns Excess Returns
Yahoo Google S & P Market Yahoo (Preferable
Stock)
=100*LN(B3/B2) =100*LN(C3/C2) =100*LN(D3/D2) =J3-E3 =H3-E3
=100*LN(B4/B3) =100*LN(C4/C3) =100*LN(D4/D3) =J4-E4 =H4-E4
=100*LN(B5/B4) =100*LN(C5/C4) =100*LN(D5/D4) =J5-E5 =H5-E5
=100*LN(B6/B5) =100*LN(C6/C5) =100*LN(D6/D5) =J6-E6 =H6-E6
=100*LN(B7/B6) =100*LN(C7/C6) =100*LN(D7/D6) =J7-E7 =H7-E7
=100*LN(B8/B7) =100*LN(C8/C7) =100*LN(D8/D7) =J8-E8 =H8-E8
Question 3
Accounting Term Resources
1 This website was started for
extending help to key
stakeholders in the form of
accounting skills thereby
increase the knowledge
level. However, the focus is
http://www.accountingcoach.com/
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mainly on those
stakeholders which have
limited resources.
2 The group is more than two
decades old and based out
of California. The central
objective is to educate not
only small business owners
but also accountants.
http://www.sleeter.com/
3 This is a forum meant for
accounting professionals
where they can discuss and
resolve various issues and
queries. Thus, it helps in
bringing reforms in the
field.
http://www.deardrebit.com/
4 This resource lists down the
various developments in
financial reporting which
the executives need to keep
them familiar with as these
are likely to have a
significant impact on the
business in the near future.
http://daily.financialexecutives.org/financial-reporting/
5 Accounting is one just
aspect of economics. It
covers the various
dimensions of accounting
which has widespread
implications and not limited
http://www.economist.com/topics/corporate-accounting
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to only business.
Question 4
The organisation selected is CPA Australia. One resource which is useful is in the form of
accounting professional and ethical standards that need to be followed by professionals. This has
immense relevance in the present day as ethics in the accounting field is increasingly becoming
more valuable.
Reference: https://www.cpaaustralia.com.au/professional-resources/accounting-professional-and-
ethical-standards
Question 5
One of the computing systems which were deployed in my last organisation was Microsoft
dynamics. This is leading ERP software which is quite helpful in building organizational process
chains along with underlying processing of information in real time and report generation. It has
namely three key modules namely in the form of module dedicated to fixed asset, procurement
along with project based accounting. Collectively, the ERP system insured that stock accounting
fixed asset accounting coupled with profitability computations of the various businesses is taken
care of. The underlying system was capable for producing reporting on various dimensions
taking key information related to management and financial parameters into consideration. This
not only included the established financial statements such as cash flow, income statement &
balance sheet but also included reports related to resource utilization (Weyganth , Kimmel&
Kieseo, 2009).
The given system also deploys statutory reporting which is meant for management reporting
coupled with audit. However, analytical reports are primarily produced for key internal
stakeholders such as the top management. The inputs to the system were received by various
employees working at various levels with varying responsibilities. Besides, the system could also
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produce two separate financial statements where one was meant for audit while the other for tax
as essentially the driving rules for the two are different. Also, a one click feature was available
for generation and viewing of income statement and balance sheet in real time rather than
waiting till month or period end (Kinney & Rainborn, 2012).
Question 6
Part 1
There are four main components of financial statements which have been discussed as
highlighted below (Drury, 2006).
 Balance Sheet – The balance sheet reflects the financial position of the company at a
respective date and is useful for a host of stakeholders in taking decisions related to
extension of short term & long term credit by lenders and suppliers. Further, ratio
analysis is a key tool which is used by the shareholders in order to analyse the strength of
the financial position coupled with capital structure.
 Cash Flow Statement – While the profitability is indicated by income statement, the cash
flow statement indicates the cash inflows and cash outflows and thus enables the
organisation along with the stakeholders with regards to cash liquidity and also to make
arrangements for incremental cash.
 Income Statement- The profitability of operations is reflected in the income statement
which in-turn is used to compute the earnings per share which has an impact on the share
price. Further, the various expenses particularly the interest charges are also captured in
the income statement.
 Change of equity statement – This essentially reflects any changes in the equity which
may be on account of change in outstanding shares caused through issue of fresh equity
or buyback. Further, the retained earnings available as internal accruals are also reflected
in this statement (Boyns & Edwards, 2013).
Part 2
The key lessons from ABC learning case study are highlighted below (Arens, et.al., 2013).
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 It is imperative that the company should grow in a controlled manner so that the growth
is sustainable. This is especially true for increasing the geographical presence.
 The essential thing is that management while pursuing expansion and growth must focus
on the strength of the organization.
 The related party transactions should be minimised by the form as it tends to adversely
impact the credibility of the company particularly the corporate governance.
 The role of the management coupled with external auditor is highly relevant in order to
cause or prevent financial discrepancy.
 Further, quality of services is usually more significant in comparison to the reach.
Part 3
The three ethical issues as identified from the case study are highlighted below(Kinney &
Rainborn, 2012).
 In order for investor to have a complete picture of the financial performance, it is
essential to disclose the related party transactions to the various stakeholders as it could
be potentially significant.
 The financial structure should be kept simple only as over complication of the same could
potentially be detrimental to the organisational interest as complicated financial structure
leads to higher incidence of fraud.
 It is imperative for owners to bring in their own money as it gives confidence to the
minority shareholders and also the debt providers that all requisite measures would be
undertaken to further the interests of the company.
Question 7
PALER
(A) Manual Solution
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Excel solution
 Normal view
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 Formula view
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Question 8
Balance Sheet Equation
(A) Manual solution
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(B) Spreadsheet solution
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Question 9
Accounts with normal debit balances are accounts receivables, prepayments, cash at bank and
stock in hand. Accounts with normal credit balances are share capital, deferred income, loans &
borrowings and drawings (Heisinger, 2009).
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Question 10
Trial Balance
Given data
(A) Manual Solution
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Scanning app used: Camscanner
(B) Spreadsheet solution
 Normal view
 Formula view
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(C) Trial balance when three numbers has changed (yellow highlighters)
 Normal view
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 Formula view
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Question 11
Cross word puzzle
Blank copy of crossword puzzle
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Completed copy of crossword puzzle
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Question 12
The two end of period adjustments examples are stated below (Heisinger, 2009).
 Unearned Revenues – This refers to revenues which are received in advance while the
requisite service or product would be delivered later. Thus, till the time product or service
delivery happens, this needs to be recorded as liability,
Journal Entry
Assume that 80% of $ 10,000 income has been earned, hence the relevant adjustment entry is
indicated below.
Particulars Debit ($) Credit ($)
Unearned Revenue 2000
To Service Income 2000
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 Prepayment – This typically is visible in case of insurance payments which are made
typically for 6 months or 12 months. Thus, it is quite possible that a period of this
insurance may extend to the next financial year. Thus expense for the time period
extended in the next year should be recorded as a current asset and not as expense.
Journal Entry
Assume $ 360 insurance premium has been made for a period of 12 months out of which only 10
months lie in the current financial year and remaining 2 months in the next year. The relevant
adjustment entry is indicated below.
Particulars Debit ($) Credit ($)
Insurance Expense 60
To Prepaid Expense Asset 60
Question 13
Current Liabilities are those liabilities which would have to be settled or which would arise in the
current operating cycle or within one year only. Examples include accounts payables and short
term borrowings.
Non-current liabilities are those liabilities which would not have to be settled or which would not
arise in the current operating cycle or within one year only. Examples include long term lease
obligations and term borrowings (Drury, 2006).
Question 14
Current ratio is a pivotal indicator of short term liquidity of the company and numerically
computed using the following formula.
Current Ratio = Current Assets/Current Liabilities
Assume that the current assets and current liabilities of a company are $ 250 million and $ 200
million respectively.
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Thus, current ratio = 250/200 = 1.25
Question 15
Given data
(A) Manual solution
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Scanning app used: Camscanner
 The three financial reports are shown below:
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(B) Spreadsheet solution
 Normal views
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 Formula views
Data
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(C) Spreadsheet with three chnages
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Reference
Arens, A., Best, P., Shailer, G. & Fiedler,I. 2013. Auditing, Assurance Services and Ethics in
Australia, 2nd edn., Pearson Australia, Sydney.
Boyns, T. & Edwards, R. J. (2013) A History of Management Accounting: The British
Experience (12th ed.). London: Routledge Publication.
Drury, C. (2006) Cost and Management Accounting: An Introduction (6th ed.). New York:
Cengage Learning.
Heisinger, K. (2009) Essentials of Managerial Accounting (4th ed.). London: Cengage Learning.
Kinney, R. M. & Rainborn , A. C. (2012) Cost Accounting: Foundations and Evolutions.( 9th
ed.). New York: Cengage Learning.
Weyganth, J.J., Kimmel, D. P. & Kieso, E. D. (2009) Managerial Accounting: Tools for
Business Decision Making (5th ed.). Sydney: John Wiley & Sons
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