Performance and Knowledge Assessment: BSBFIM501 Manage Budgets

This document presents a comprehensive solution for the BSBFIM501 Manage Budgets and Financial Plans assessment. It begins with an overview of the assessment, including its purpose, format, and required resources. The solution provides detailed answers to short answer questions covering key accounting concepts such as the accounting equation, ledger accounts, current liabilities, and the calculation of gross and net profit. The document then includes a completed balance sheet based on provided figures, demonstrating the application of accounting principles. Finally, the solution offers answers to multiple-choice questions, testing the student's understanding of topics such as cash accounting, business ownership, financial statements, budgeting, and variance analysis. The document ensures a thorough understanding of the assessment requirements, providing a complete and accurate solution to help students prepare for and succeed in their assessment.

Course Details
Course Name
Unit(s) of competency
Unit Code (s) and
Names BSBFIM501 Manage Budgets and Financial Plans
Assessment Details
Term and Year Time allowed
Assessment No Assessment Weighting
Assessment
Descriptor
Due Date Extension (if approved)
Re-Assessment Details
Term and Year Time allowed
Assessment No Re-assessment Fee Paid?
Assessment Type
Due Date No Extension
Student Details and Declaration
Student Name
Student ID Trainer/
Assessor’s Name
Student Declaration:
a. I declare that the work submitted is my own and has
not been copied or plagiarised from any person or
source.
b. I have not submitted any part of this assignment
previously as part of another unit/course.
c. I acknowledge that I understand the requirements to
complete the assessment tasks.
d. The assessment process including the provisions
for re-submitting and academic appeals were
explained to me and I understand these processes.
Signature:
_________________________________
_
Date: _______/________/______
Assessment Outcome - To be completed by the Assessor
Assessor’s Name
Results Satisfactory Not
Satisfactory Marks:
Re-assessment
eligibility Yes No Due Date:
This assessment First Attempt 2nd Attempt Late Penalty__________
Assessment Task
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FEEDBACK TO STUDENT
Progressive feedback to students, identifying gaps in competency and comments on positive improvements:
______________________________________________________________________________________
______________________________________________________________________________________
______________________________________________________________________________________
______________________________________________________________________________________
Student Declaration: I declare that I have been
assessed in this unit and I have been advised of my
result. I am also aware of my right to appeal and the
reassessment procedure.
Signature: ____________________________
Date: ____/_____/_____
Assessor Declaration: I declare that I have
conducted a fair, valid, reliable and flexible
assessment with this student, and I have provided
appropriate feedback
Student did not attend the feedback session.
Feedback provided on assessment.
Signature: ____________________________
Date: ____/_____/_____
FEEDBACK TO STUDENT (FOR REASSESSMENTONLY)
______________________________________________________________________________________
______________________________________________________________________________________
______________________________________________________________________________________
Student Declaration: I declare that I have been re-
assessed in this unit and I have been advised of my
result. I am also aware of my right to appeal.
Signature: ____________________________
Date: ____/_____/_____
Assessor Declaration: I declare that I have
conducted a fair, valid, reliable and flexible
assessment with this student, and I have provided
appropriate feedback
Student did not attend the feedback session.
Feedback provided on assessment.
Signature: ____________________________
Date: ____/_____/_____
Assessment Task
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Assessment Activity
(Performance and Knowledge)
SITXFIN004
Prepare and monitor budgets
Assessment Task
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DOCUMENT CONTROL
VERSION DATE COMMENTS
1.0 18th September 2015  Initial
ASSESSOR PRE-ASSESSMENT CHECKLIST
This checklist is to be completed prior to commencing the assessment.
Please discuss this with the learner and circle yes or no for each question.
Is the learner ready for assessment? ☐Yes ☐ No
Have you explained the assessment process and tasks? ☐ Yes ☐No
Does the learner understand which evidence is to be collected and
how?
☐ Yes ☐No
Have the learner’s rights and the appeal system been fully explained? ☐ Yes ☐No
Have you discussed any special needs or reasonable adjustments to be
considered during the assessment?
☐ Yes ☐No
Does the learner have access to all required resources? ☐ Yes ☐No
ASSESSMENT INSTRUCTIONS
PURPOSE OF THE ASSESSMENT TASK
Assessment Tool Performance and Knowledge (Examination)
To demonstrate satisfactory completion of this Assessment
Task the learner must:
Satisfactory
(S)
Not Satisfactory
(NS)
Part A: Short Answer Responses completed ☐ ☐
Part B: Construct a Balance Sheet ☐ ☐
Part C: Multiple Choice Questions ☐ ☐
Overall Assessment Task Performance Satisfactory
(S)
Not Satisfactory
(NS)
Assessment Task: Performance and Knowledge
(Examination) ☐ ☐
Resources required for this Assessment
Trainers and Assessors are required to ensure all learners have access to:
 Resources and documentation used in the workplace
 Workplace policies and procedures
 Workplace budgets and financial plans
 Business technology
Assessment Task
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Instructions for Trainer and Assessors
This assessment task has to be conducted as per the Assessment Conditions:
In class ☐ In an Industry Workplace ☐ In a Simulated Industry Environment
Please read the following instructions carefully
 Attendance must be recorded in the Attendance Spreadsheet
 The assessment is to be completed according to the Assessment task instructions
 This is an individual assessment
 Trainer and Assessor are to complete the Pre-Assessment Checklist before commencing the
Assessment process
Assessment Overview Format: Knowledge Assessment (Examination)
Part A: Short Answer Responses
Part B: Balance Sheet
Part C: Multiple Choice Questions
Total Marks Part A: 35 Marks
Part B: 10 Marks
Part C: 15 Marks
Total Marks: 60
Time Allocated Two (2) Hours
Assessment Task Duration
Week 8
Learner Evidence Submission Requirements
Test Result
MANAGE BUDGETS AND FINANCIAL PLANS
Assessment Task
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ASSESSMENT TASK: PERFORMANCE AND KNOWLEDGE (EXAMINATION)
PART A: SHORT ANSWER RESPONSES
1. What is an ‘Accounting Equation’?
It is the double entry system in which balance sheet items will be represented
(Juárez, 2015). The assets will be shown on one side and they will equal to the
liabilities and shareholder’s equity.
2. Insert the following items into their correct table for the five (5) groups of ledger
accounts.
Insurance, Overdraft, Bank Loan, Furniture & fittings, Commission
received, Rates,
Capital, Trade Debtors, Bank Account; Couriers; Telephone; Computers;
Petty Cash; GST Paid; Trade Creditors; Office Supplies; Discount Given;
Depreciation; Bad Debts; Cleaning.
Assets Liabilities Owner’s Equity/
Proprietorship
Income/Revenue Expenses
Furniture &
fittings
Overdraft Insurance Commission
received
Rates
Trade
Debtors
Bank Loan Capital Couriers
Bank
Account
Trade
Creditors
Telephone
Computers GST Paid
Petty Cash Discount
Given
Office
Supplies
Depreciation
Bad Debts
Cleaning
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3. Give two (2) examples of ‘current liabilities’
Trade creditors and short-term loans
4. Usually items or amounts to be paid after 12 months are ‘Non-Current’ or ‘Long
term Liabilities’. Give an example:
Long term loan (Catão & Milesi-Ferretti, 2014)
5. All accounting transactions are made up of 2 entries in the business accounts
which net to zero. Fill in the missing words
a) A Credit which refers to:
Income in the Profit and Loss
Liability in the Balance Sheet
b) A Debit which refers to:
An expense in the profit and loss
An asset in the Balance Sheet
6. Define the following terms
a) ‘Gross Profit’
It is the profit which is earned after deducting the cost incurred on the
goods sold.
b) ‘Net Profit’
The final profit which is made by the business after deducting all the
expenses including cash and non-cash expenses.
c) How are they calculated?
Gross profit = Revenue – Cost of goods sold
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Net profit = Gross profit+ indirect income – indirect expeses
7. A trial balance is a list and total of all the debit and credit accounts for an entity for
a given period – usually a month.
The trial balance ensures that the Debits equal the Credit balances
8. What is the Cash flow equation?
Cash inflow less Cash outflow = Net Cash Inflow or outflow
9. What is a ‘budget’?
Budget is a financial plan showing the manner in which expenditures are
to be made from the decided amount.
10. Explain the term ‘zero-based budgeting’
This is the technique in which the budget is made by taking the base as zero. This
means in every period there will be new budget which will be prepared without
considering the opening balances (Ekanem, 2014).
11. Explain the term ‘Incremental budgets’
This is the budget prepared by using the figures of the previous budget
and in that addition in relation to the expense for the current period will
be made.
12. Explain the term ‘Program budget’
The budget which is designed in respect of a specific event or activity is
identified to be program budget (Cohen & Karatzimas, 2014). All the
incomes and expenses in relation to that event will be considered.
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13. In industry, the following budgets (or sub-budgets) are common. Explain what
they are:
a) ‘Capital budget’
The budget which is made for the maintenance of fixed assets is known
to be capital budget.
b) ‘Cash budget’
The budget in which all the cash inflows and outflows are estimated for a specific
period is cash budget (Reichard & Van Helden, 2016).
c) ‘Departmental budget’
The financial plan in which all the incomes and expenses for a department are
estimated is considered as departmental budget.
14. Budgets are prepared with various timelines in mind. Explain the difference
between a ‘strategic budget’, ‘an annual budget’ and a ‘monthly budget’.
Budget prepared for a period of more than a year is strategic budget
whereas the once prepared for the duration of one year are identified to
be annual budget. The once which are for a month and covers the
transactions of a particular month is monthly budget.
15. The budgeted rent of a business premises for the year was $20,000. The rent
negotiated is $400 per week. What is the rent expense variance for the year? Is it
positive or Negative?
Rent expense variance = Budgeted rent – Actual rent
= 20000 – (400*52)
= -$800
It is a negative variance as the actual expense is higher than the
budgeted amount
PART B: BALANCE SHEET
Referencing the Accounting equation, for the following figures complete a Balance
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Sheet
Inventory: Food $25,000
Inventory: Beverage $23,800
Bank Loan $15,500
Furniture and fittings $12,000
Trade Debtors $18,300
Bank Account $7,500
Computers $8,000
Petty Cash $1,200
GST payable $895
Buildings and Improvements $9,500
Trade Creditors $9,500
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Assets $ Liabilities $
Inventory: Food $25,000 Bank Loan $15,500
Inventory: Beverage $23,800 GST payable $895
Furniture and fittings $12,000 Trade Creditors $9,500
Trade Debtors $18,300 Total Liabilities $25895
Bank Account $7,500 Proprietorship/Owner’s Equity $79405
Computers $8,000
Petty Cash $1,200
Buildings and Improvements $9,500
Total $105300 Total $105300
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PART C: MULTIPLE CHOICES QUESTIONS
1. Cash accounting:
A. involves only cash receipts
B. involves all transactions of an organisation
C. involves only actual cash receipts and payments
D. none of the above
A B C D
2. The best form of business ownership is:
A. sole proprietorship
B. company
C. partnership
D. any of the above as they are equally useful in different situations
A B C D
3. The balance sheet:
A. measures the financial performance of an organisation
B. states the financial position of an organisation
C. shows the cash flow in an organisation
D. is used for whatever one would like it to do.
A B C D
4. The profit and loss statement:
A. is a statement of the financial performance of an organisation
B. states the financial position of an organisation
C. shows the cash flow in an organisation
D. measures whatever one would like it to measure.
A B C D
5. The cash flow statement:
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A. describes the financial performance of an organisation
B. depicts the financial position of an organisation
C. states the cash flow in an organisation
D. All of the above
A B C D
6. The finance specialist’s involvement in the budgetary communication process is to
ensure that:
A. The communication of budgetary information occurs
B. No errors have occurred in a budget before a budget is communicated to
those responsible for achieving a budget
C. No-one makes their budgets too easy to achieve
D. Everyone knows the financial specialist is part of the management
structure of an organisation
A B C D
7. Sales variance reports highlight:
A. The differences between total revenue earned and planned total revenue
B. The variations between planned units sold and actual units sold
C. The variations between planned revenue earned per unit sold and actual
revenue earned per unit sold
D. All of the above
A B C D
8. Budget documentation should:
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A. Clearly show the responsibility of the appropriate person
B. Show the relationship between subsidiary budgets
C. Indicate the persons responsible for monitoring expenditure
D. All of the above
A B C D
9. The budgeted rent of a business premises for the year was $15,000. The rent
negotiated is $300 per week. The rent expense variance for the year is:
A. $600 (favourable)
B. $600 (unfavourable)
C. nil
D. none of the above
A B C D
10. Costs that change directly in proportion to changes in the level of activity include:
A. Fixed costs
B. Variable cost per unit
C. All variable costs
D. Fixed cost per unit
A B C D
11. Total Variable costs are $18,000 when 10,000 units are produced. When 12,000
units are produced, fixed costs would be:
A. $20,000 in total
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B. $1.50 per unit
C. $21,600 in total
D. $1.80 per unit
A B C D
12. Gross profit is calculated as:
A. sales revenue less all costs
B. sales revenue less selected costs
C. sales revenue less non-financial costs
D. sales revenue less cost of sales only (i.e. direct cost of goods sold or
service provided)
A B C D
13. The chart of accounts records:
A. accounting information in chart form
B. information in a pie chart
C. account numbers and classification of such numbers for a particular
organisation
D. standard account number details common to all organisations
A B C D
14. The budgeted sale of Green Lawn Mowers was 100 at the rate of $300 per
mower. Smith sold 110 lawn mowers at an average price of $290. The total sales
variance is:
A. $1 900 (favourable)
B. $1 100 (unfavourable)
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C. $3 000 (favourable)
D. $2 900 (unfavourable)
A B C D
15. 5000 crates of mangoes each costing $5 were purchased by the Delicious Fruit
Salad Company. The budget was 4900 crates at $5 each the purchase unit variance
was:
A. 100 crates (favourable)
B. $500 (favourable)
C. 100 crates (unfavourable)
D. $500 (unfavourable)
A B C D
+++ END OF PAPER +++
References:
Catão, L. A., & Milesi-Ferretti, G. M. (2014). External liabilities and crises. Journal of
International Economics, 94(1), 18-32.
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Cohen, S., & Karatzimas, S. (2014). Reporting performance information in the public
sector: the moral behind the (non) application of program budgeting in
Greece. International Review of Administrative Sciences, 80(3), 619-636.
Ekanem, E. E. (2014). Zero-based budgeting as a management tool for effective
university budget implementation in university of Calabar, Nigeria. European Journal
of Business and Social Sciences, 2(11), 11-19.
Juárez, F. (2015). The accounting equation inequality: A set theory approach. Global
Journal of Business Research, 9(3), 97-104.
Reichard, C., & Van Helden, J. (2016). Why cash-based budgeting still prevails in an
era of accrual-based reporting in the public sector. Accounting Finance &
Governance Review, 23(1-2), 43-65.
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