Accounting Systems and Processes Assignment A - Student Solutions

This document provides a comprehensive solution to an Accounting Systems and Processes Assignment (Assignment A). It addresses various aspects of accounting, including plagiarism, methods of pasting Excel data, and resources for accounting education. The solution covers topics such as financial statements (balance sheet, income statement, cash flow statement), ethical issues in accounting, and the selection of an ERP system (Microsoft Dynamics). It also includes examples of journal entries for adjusting entries (prepayments and unearned revenues), the difference between current and non-current liabilities, and the calculation of the current ratio. The assignment incorporates both handwritten and spreadsheet solutions, providing a detailed analysis of accounting concepts and practical applications, along with a crossword puzzle and relevant references.

ACCOUNTING SYSTEMS AND PROCESSES
Assignment A
Student _id
[Pick the date]

Table of Contents
Question 1........................................................................................................................................1
Question 2........................................................................................................................................2
Question 3........................................................................................................................................3
Question 4........................................................................................................................................4
Question 5........................................................................................................................................4
Question 6........................................................................................................................................5
Question 7........................................................................................................................................7
Question 8......................................................................................................................................13
Question 9......................................................................................................................................16
Question 10....................................................................................................................................16
Question 11....................................................................................................................................21
Question 12....................................................................................................................................23
Question 13....................................................................................................................................25
Question 14....................................................................................................................................25
Question 15....................................................................................................................................26
Reference.......................................................................................................................................34
1

Question 1
When an individual person has copied the work of another person and then submitted in the
university in the name of their own work and then when the honest person has submitted their
work then his/her solution gets caught in plagiarism with the help of plagiarism checking
software /tools. Hence, it can be concluded that stealing some one’s work and pretend it as their
own work is term as plagiarism. It is unfair to honest student because the honest student is not
aware about the fact that before his/her submission someone has already used his/her work.
Question 2
Methods of pasting excel into work
 Select the portion in the excel > press ctrl+c > go to word doc > press ctrl +v >
 Select the portion in the excel > press ctrl+c > go to word doc > right click > select paste
option (based on need such as values, formulas, formatted text and so forth)
Normal view
Formula view
Part a
Parameter observation
s
Mean Standard deviation
2
Part a
Paramete
r
observation
s
Mean Standard
deviation
Total 91 565.05 407.79
Small
size
32 212.88 48.33
Medium
size
39 529.28 134.17
Large
size
20 1198.3
0
338.05

Total 91 =AVERAGE(B3:B9
3)
=STDEV(B3:B93)
Small size 32 =AVERAGE(D5:D3
6)
=STDEV(D5:D36)
Medium size 39 =AVERAGE(E5:E4
3)
=STDEV(E5:E43)
Large size 20 =AVERAGE(F5:F24
)
=STDEV(F5:F24)
Question 3
Accounting Use Resources
1 While the website offers a
host of courses on various
subjects, a person
concerned can choose a
course on accounting and
understand the key
concepts in an easy and
convenient manner for
free.
https://www.coursera.org/course/accounting/
2 This website tends to
provide free information
with regards to
bookkeeping and the
various aspects. Further,
regular tests and
checkpoints are built to
track progress.
http://simplestudies.com/
3 This website is
particularly useful for
newcomers where
learning is fostered
http://www.accounting-world.com/
3

through various articles
which tend to cover
various topics related to
accounting and fosters
learning.
4 This blog is run by Mark
Goodfield who tends to
offer advice on various
matters related to money
and tax and is an
interactive forum for
resolution of issues.
http://www.thebluntbeancounter.com/
5 This blog is run by Skoda
Minotti which besides
professional paid help
provides a host of
knowledge through
articles which is meant
for those users who want
to build on the basic
knowledge.
http://blog.skodaminotti.com/blog/
Question 4
Selected Australian professional accounting organization - CPA Australia
It is apparent that ethical practice in the work is an imperative part of the business and thus, it is
relevant to the accounting field also. Therefore, CPA Australia has been taken into account by
the accounting professional, which provides plethora of resources and ethical standard followed
in accounting organization.
4

Resource: https://www.cpaaustralia.com.au/professional-resources/accounting-professional-and-
ethical-standards
Question 5
Microsoft dynamics is one of the popular ERP systems which I wish to be installed in the next
organization I work with. This particular ERP software can be used for highlighting the process
chains of the organization. Further, it is also capable in real time information processing coupled
with generation of reports. There are various modules in this ERP which deal with various
aspects namely project based accounting, accounting of inventory and accounting of fixed assets.
Thus, the given ERP takes care of not only profit computations but also computations for fixed
asset and inventory which are critical for any firm. A key feature of the package is the generation
of customized report taking into cognizance the various parameters related to management and
financial aspects. A key aspect in this regard is resource utilization which tends to go beyond the
accepted common financial statements which includes income statement, cash flow and balance
sheet (Brigham & Houston, 2014).
Statutory reporting is also used by this package which is useful not only for management
reporting but also for audit. Further, the analytical reports are catered and directed towards the
management which needs to engage in strategic decision making. These reports tend to take
inputs from employees which at engaged at different organizational levels and have different
responsibilities. Additional benefit of this package is the ability to produce financial statements
directed towards tax and audit. Besides, there is also the facility for authorized users to view the
financial statements in real time instead of viewing the same at the end of period only which is
quite helpful for finance department (Bruner, 2013).
Question 6
Part 1
5

Financial statements are pivotal in providing information regarding financial and operational
performance of the organization. They typically consist of four main parts which are balance
sheet, income statement and cash flow statement along with statement of change in equity
(Drury, 2006).
The balance sheet tends to highlight the financial position on a given date which is useful for
decision making by plethora of users. The balance sheet indicates the capital structure of the firm
along with the liquidity position. This information is critical to lenders, suppliers coupled with
investors. Besides, the operational performance and cash cycle is also indicated from the
constituents of balance sheet.
The profit or income generated from the operations is contained in the form of income statement
on which the dividend and earnings per share would depend. These two parameters tend to
reflect on the share price as higher earnings are associated with higher valuation. Besides,
information about the various expenses is crucial for vertical and horizontal analysis.
At times the profits do not translate into cash as the sales are reflected in the form of account
receivables and hence cash flow is imperative. It reveals the cash flow pattern in three type of
activities namely operations, investing and financing. The repayment and raising of debt or
equity is also reflected. Further, generation of a positive cash flow from operations is considered
to be pivotal. The statement of equity change tends to reflect the various equity changes that
have taken during a given period (Gitman, Juchaou & Flanagan, 2011).
Part 2
The case regarding ABC learning has the following lessons to offer to the management (Arens,
Shailer & Fiedler, 2013).
 The management needs to exploit the underlying strength of the business and should not
deviate from the same in order to increase the short term profit as such an approach
would not produce sustainable wealth creation and hence would be detrimental to the
shareholders’ interest.
6

 For strengthening the corporate governance and enhancing the credibility of the financial
statements, the company should minimise the transactions involving related party and
should have proper disclosures for the same.
 The ethical conduct of the management goes a long way in prevention of any financial
irregularity while a lack of the same tremendously enhances the possibility of financial
jugglery.
Part 3
The case has the following ethical issues to identify.
 The management needs to be ensured highest level of disclosures including related party
transactions so as to ensure that the stakeholders are able to made prudent decisions with
regards to their relations with the firm.
 The complexity of financial structure needs to be managed prudently as on one hand, it
might have in minimizing tax but on the other, it tends to enhance the risk of corporate
fraud and thus, a simplified structure is preferable.
 Higher equity from owners is critical and a healthy debt equity ratio should be maintained
which ensures that the promoters have interest in generation of wealth over the long term
rather than limiting gains over the short period (Kinney & Rainborn, 2012)
Question 7
Handwritten solution is shown below:
1. Type of accounts
7

2. Income statement
8

3. Drawing computation
4. Balance sheet
9

App - Camscanner
Spreadsheet solution is shown below:
 Normal view of the solution
10

11

 Formula view of the solution
12

13

Question 8
A. Handwritten solution is shown below:
14

App - Camscanner
B. Spreadsheet solution is shown below:
 Normal view of the solution
15

 Formula view of the solution
16

Question 9
 List of four accounts with normal debit balances
1. Pre-payments
2. Cash (bank cash)
3. Number of stocks
4. Accounts receivables
 List of four accounts with normal credit balances
1. Income (deferred income)
2. Drawings
3. Loans
4. Share capital
Question 10
17

A. Handwritten solution is shown below:
App - Camscanner
B. Spreadsheet solution is shown below:
 Normal view of the solution
18

 Formula view of the solution
19

(C) When three numbers have been modified/changed (change is highlighted in yellow)
 Normal view of the solution
20

 Formula view of the solution
21

Question 11
Development of cross word puzzle has been performed through online app – Cross word maker
Blank copy
22

Solution puzzle
23

Question 12
Types of adjusting entries
The two types of period and adjusting entries along with journal entries examples are highlighted
below:
1. Pre-payment
2. Unearned revenues
24

1. Pre-payment
This type of adjusting entry is generally used in the insurance payments with the period of half
year or 1 year. However, there is a possibility that this insurance payment would increase to the
upcoming income year. Therefore, the respective expenses incurred due to the time increase
would be termed as current asset (not expense) for the company (Kinney & Rainborn, 2012).
Journal entry examples
Let the insurance premium = $640
Time period = 1 year
In this time period = 10 months in the present income year + 2 months in the upcoming income
year
Adjusting entry
2. Unearned revenues
The advanced received revenues for the undelivered goods or services would be termed as
unearned revenues. Therefore, the time period till the respective goods or services would deliver
to the respective party the received revenues would be termed as liability of the company
(Kinney & Rainborn, 2012).
Journal entry examples
Interest rate = 8%
Income (revenue) received = $10,000
25

Adjusting entry
Question 13
Difference between current and non-current liabilities with examples is given below
(McLaney, 2009:
Current liabilities
The liabilities which arises or settles within one income year or say in current operating year
would be termed as current liabilities.
Example: Short term debt and account payables and so forth
Non-current liabilities
The liabilities which does not arise or settle within one income year or say in current operating
year would be termed as non-current liabilities.
Example: long term debt and long term lease agreements
26

Question 14
Current ratio
In order to determine the short term liquidity of the respective company, current ratio is
considered to an imperative financial ratio. Current assets divided by current liability is current
ratio (Peirson, et al., 2014).
Current Ratio= Current Assets
Current Liabilities
Example:
Let the current assets of XY company is $10 million and their current liabilities is $5million,
then the value of current asset is given below:
Current Ratio= Current Assets
Current Liabilities = 10
5 =$ 2million
Question 15
A. Handwritten solution is shown below:
27

App: Camscanner
Financial reports:
28

29

B. Spreadsheet solution is shown below:
30

31

32

Formula view of the solution
33

34

C. Loss reporting after three changes
Normal view
Formula view
35