Accounting System and Process - Finance Homework Solution

This document presents a comprehensive solution to an accounting system and process assignment. It starts with explanations of spreadsheet applications, including the use of named ranges and negative number representation, and then moves on to the segregation of data and report areas within spreadsheets. The assignment includes examples of IF functions within Excel, and a discussion on periodic inventory systems. The solution further covers the preparation of adjusted spreadsheets, income statements, and balance sheets, alongside an analysis of the advantages of using spreadsheets for accounting. It also includes an inventory analysis, bank reconciliation, and journal entries for accounts receivable and bad debts. The document evaluates financial position through receivables, provides journal entries for a given scenario, and analyzes the business operations of Wesfarmers, including its financial statements, dividends, return on equity, earnings per share, risk mitigation strategies, and sustainability. Finally, it offers investment advice based on Wesfarmers' financial performance and working capital ratio.

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

1ACCOUNTING SYSTEM AND PROCESS
Table of Contents
Question no. 1.........................................................................................................................................................2
Question no. 2.........................................................................................................................................................2
Question no. 3.........................................................................................................................................................3
Question no. 4.........................................................................................................................................................3
Question no. 5.........................................................................................................................................................4
Question no. 6.........................................................................................................................................................5
Question no. 7.........................................................................................................................................................9
Question no. 8.......................................................................................................................................................11
Question no. 9.......................................................................................................................................................13
Question no. 10.....................................................................................................................................................13
Question no. 11.....................................................................................................................................................13
Question no. 12.....................................................................................................................................................14
Question no. 13.....................................................................................................................................................14
References.............................................................................................................................................................18

2ACCOUNTING SYSTEM AND PROCESS
Question no. 1
Under spreadsheet, names replace the cell references so that the users can calculate and use the formulas
to make it convenient and useful. Examples of spreadsheet that represents the liabilities as well as the owner’s
equity are represented below –
Question no. 2
The negative numbers are put in brackets rather than showing it through putting the minus sign facing
the negative numbers to present the negative numbers clearly and make it more visible to the users (Golyagina,
& Valuckas, 2016). One example of putting the negative numbers in bracket is as follows –

3ACCOUNTING SYSTEM AND PROCESS
Question no. 3
The spreadsheet makes is easier to enter various entries in proper way under separate colums
particularly at the time of recording inventory. The spreadsheet must show the data area distinct from the report
area as the data area includes the entire data that are not yet processed whereas, the report area includes that
data which are processed. It helps the users to extract the processed as well as unprocessed data as per his
requirement. The below presented image is an example of segregating the report area and data area –

4ACCOUNTING SYSTEM AND PROCESS
Question no. 4
IF function performs the logical test and returns True value on fulfilling the specific condition,
otherwise returns the false value. Under excel, IF functions is considered as logical function.
IF function example –
Normal view –
Formula view –
Question no. 5
Periodic systems for inventory

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Under the periodic system, the inventories are updated at the end of the each period rather than after
each transaction of purchase or sales (Hoggett et al., 2015). Goods available for the purpose of sales are
calculated through adding the purchases with opening balance and the closing balance is calculated through
physical count of inventory.
Example –
Question no. 6
Adjusted spreadsheet of fancy Footwear – Normal view

6ACCOUNTING SYSTEM AND PROCESS
Adjusted spreadsheet of fancy Footwear – Formula view
Income statement under Normal view –

7ACCOUNTING SYSTEM AND PROCESS
Income statement under Formula view –

8ACCOUNTING SYSTEM AND PROCESS
Balance sheet under normal view –

9ACCOUNTING SYSTEM AND PROCESS
Balance sheet under Formula view –

10ACCOUNTING SYSTEM AND PROCESS
Spreadsheet as the accounting tool –
 It makes the calculation simple and easier through various formulae
 The cells can be made visible or hidden as per the requirement of the user (Drury, 2013).
 The sheet can be formatted through specified font, size, text and numbers as per requirement
 Various graphs and charts can be prepared under spreadsheet using the data
Question no. 7
Inventory under normal view –
Calculation of gross profit under normal view –

11ACCOUNTING SYSTEM AND PROCESS
Inventory under formula view –
Calculation of gross profit under formula view –
Inventory after changes in data –
Gross profit after changes in data –