BSBFIM601 Manage Finances: Assessment 1 Knowledge Questions, 2024

This document provides comprehensive answers to the knowledge questions from the BSBFIM601 Manage Finances assessment. It addresses key concepts such as financial probity, including ethical conduct and confidentiality; fraudulent behaviors like manipulating financial statements; the types of businesses requiring annual audited accounts and the purpose of audit reports; the principles, advantages, and disadvantages of both cash and accrual accounting; four main taxation and superannuation obligations for businesses (ABN, GST, PAYG, and staff tax); requirements for financial reporting and auditing under the Corporations Act 2001; and relevant Australian, international, and local legislation and conventions affecting financial management, including the Competition and Consumer Act 2010. The document is designed to assist students in understanding and preparing for their finance assessments, offering detailed explanations and examples for each topic covered. This assignment is available on Desklib, a platform providing resources for students to aid in their studies.

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BSBFIM601
Manage Finances
Student Assessment 1
Knowledge Questions

BSBFIM601 Manage finances
Customisation
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Assessment Instructions for Knowledge Questions
Instructions to student:
This is the knowledge assessment for the unit.
The information contained here is instruction on how to complete the assessment then submit for
marking, feedback and results.
(1) Students are expected to learn and practice before completing the assessments. Students can attend Assessor
information sessions in TEAMS to prepare for the assessment and get further instructions. The information
sessions are notified direct to your Mercury Colleges email address. Make sure you log in and attend these
sessions.
(2) You are required to individually complete the Knowledge Questions by the due date.
(3) The questions must be completed in written format. You may use the supplied document here to hand write
or type in your answers.
(4) Submit into ELearn using your student login.
If you are using a computer, save the file according to the submit procedure into ELearn.
If you are competing the assessment by hand-written answers, then you will need to scan the document and
save the file according to the same submit procedure into ELearn.
(5) This is not a closed book exam assessment. The unit resources in ELearn including the Learner Guide can be
used as a reference. However, students must not copy a full answer or plagiarise from the Learner Guide or
other sources unless this is indicated as acceptable in the question. So, the answer must be in your own
words.
(6) Please note that your responses can (where appropriate) use dot point format or a full sentence. See below
for an example of a dot point response and a full sentence response. There is a word count a guidance to what
is a full and complete answer.
Dot point format Presentation Plan includes the following:
 outcomes
 needs of the audience
 context.
Full sentence format When you are preparing for a Presentation, there are a number of tasks that must be
carried out. These are; listing the outcomes that you want to achieve, followed by the
identification of the needs of your audience. When you have completed these two
tasks, you then check on the room you will be conducting the simulation in etc.
(7) The Mercury Colleges Academic Misconduct Policy that has more information about cheating and not
submitting your own genuine work (also known as plagiarism). You have made a student declaration to be
sure you are ready to do this assessment and that you understand College policy, your rights and obligations.
(8) Each question will be marked in a recording form by the Assessor. You are expected to complete and get every
question correct.
(9) You will get feedback on your result and will be able to re-submit answers that are not correct.
(10)The final mark is S - satisfactory or NYS - not yet satisfactory. Satisfactory mean all questions are answered
correctly. See the Result form uploaded in ELearn (Gradebook) for your mark and feedback.
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(11)Follow the Mercury Colleges ELearn submission steps for file naming and the procedures set by for uploading.
You can read these procedures in the ELearn platform.
Declaration
Your assessor will go through the assessment for this unit. It is important that you understand this assessment. To
confirm that you have been given this overview and the opportunity to do an information session, we ask you to
complete the following Student Declaration.
Read each checklist item provided below and tick for YES to confirm your understanding or x for NO if you disagree.
You can ask for support here is the declaration and follow up with your assessor. We ask you to sign this Declaration.
STUDENT DECLARATION COVER SHEET
Unit Code: BSBFIM601 Unit Title: Manage Finance
TASK Assessment 1 - Knowledge Questions
Student
Declaration
Tick each statement
or Add a X cross and
comment at bottom
 Learn then do the assessment - I had time to learn then practice
before the assessments.
 Information session - I had the opportunity to attend an information
session in TEAMS where the Assessor has gone through the Instructions
 I understand that this is a formal assessment.
 Authentic – It is my work - I understand I must demonstrate the
knowledge and skills for this unit myself in my own words
 Recordings - I understand the Assessor will use recording form to
observe practical tasks and role play and may take photos or screen
shots from TEAMS or other technology that is used to prove this was
authentic and real. I give permission for the use of these images for this
assessment purpose only.
 Computer, Email, Internet etc - I have the technology required to
participate in the assessment or if I do not, I know that Mercury College
will support and supply me with the technology assistance.
 ELearn Submit - I have username and log in and can follow
procedures to submit the assessments
 I understand I will get results and feedback at the end of the
assessment
 I have read about the re-submits, the reassessments and appeals
 I know I can talk to the Assessor if I have any support needs to help
me do this assessment. I will follow this up if needed.
 I am ready for assessment and sign here.
Concerns raised by
student (Marked X)
 I will make contact or talk to the Assessor about my concerns and how
I will be able to do the assessment and I will ask to discuss support or
adjustments.
Student
Signature
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Assessment 1 Knowledge Questions
Question 1
Identify and describe financial probity requirements for businesses
(Answer can be a short sentence that explains concept then 3 dot points for each elements)*}
Financial Probity requires that….
 Official to act ethically in compliance with APS values
 Treating tender participants equally and fairly
 Maintaining confidentiality of the participants’ confidential information
Elements of a business culture that promotes and demonstrates high standards of probity include..
 Being transparent and accountable
 Being trustworthy and to act lawfully
 Managing conflict of interests
Question 2
Identify four examples of what would be considered fraudulent behaviour inregard to company finances.
(Answer can be dot points or a short sentence for each)*}
Fraudulent behaviour example 1:
 Altering financial statements for making stock look attractive.
Fraudulent behaviour example 2:
 Unfamiliar purchases and charges in the bank statements
Fraudulent behaviour example 3:
 Manipulating the income statement by overstating the profits to look attractive
Fraudulent behaviour example 4:
 Misappropriation of the assets and false expenses claims.
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Question 3
Identify the types of businesses that are required to have annual audited accounts and briefly describe the
purpose of an audit report.(Dot points and about 50 words for the brief description)*}
Types of businesses that are required to have annual audited accounts
 Public company
 Subsidiary company in group that is big
 Authorised insurance company
 Involved in issuing e-money and in banking
 Corporate body and whose share are traded in regular market
The purpose of an audit report..
An audit report is key tool used for reporting the financial information to the users. It provides
the stakeholders of the company information about the financial performance and position. It
provides authentication to the financial statements that they are free from material
misstatements and reflects true and fair view of company.
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Question 4
Describe the principle of cash accounting as well as one advantage and one disadvantage of cash accounting.
(Word count should be about 30 words for the description then listing)*}
Cash accounting is accounting method where the receipts of payment are recorded in period in
which they are received and similarly expense are recorded when they are paid actually. In
simple words expenses and revenues are recorded in period in which is paid or received.
one advantage of cash accounting.
It is simple method and the company has to record the charges only when cash is received by
the business and expenses are paid. Company is not required to record expenses until cash is
paid. It does not require expert knowledge for recording transactions.
one disadvantage of cash accounting.
This accounting method that gives the business limited look at the incomes and expenses. All
the business are not allowed to use cash accounting method for their organisation and
potentially difficult for switching over.
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Question 5
Describe the principle of accrual accounting and one advantage and one disadvantage of accrual accounting.(Word
count should be about 30 words for the description then listing)*}
Accrual accounting is method where the expenses or revenues are accounted when the
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transaction has occurred instead of when the payment is made or received. This accounting
method follow matching principle where expenses and revenues should be recognised in same
period.
one advantage of accrual accounting.
It provides accurate picture of the overall cash flow for the business. It provides detailed insight
of the finance and provides long term financial picture. It enables to accurately assess how much
is earned and spend.
one disadvantage of accrual accounting.
It includes tracking of the cash flows such as accounts receivables and payables. It could also
skew short term financial of the company. The accounting method shows earnings even if
nothing has been received.
Question 6
Explain the four main taxation and superannuation obligations for a business. Briefly discuss each obligation.
(Listing then word count should be about 50 words for each description)*}
1 Australian Business
Number (ABN)
ABN is required to be obtained as it helps the company to manage
business and tax obligations and is also used as reference by ATO for
the firm. The ABN is also required for dealing with the other
businesses and with government departments
2 Goods and Service
Tax (GST)
It is broad based taxation that is imposed over the goods and services
sold in the Australia. The basic GST rate is 10% applicable to most of
the goods and services. Business is required to be registered for GST
if turnover exceeds the threshold limit.
3 Pay as you Go
(PAYG)
It is a taxation system which will allow the company to pay expected
tax liabilities through instalments. Business is notified for the PAYG
obligations by the business. It has been established for making
payments of income tax liability in instalments.
4 Tax obligations for
paying staff
As employer, it has be aware of the tax obligations while paying the
staff. The tax obligations include withholding tax, PAYG and
superannuation. If the business size is big then it may also required to
pay payroll tax over payment to employees.
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Question 7
Identify the Act that details requirements for financial reporting and auditing and, explain the requirements for
companies for preparing and lodging financial reports under this Act.(List the Act then word count should be about
50 words)*}
Corporation Act 2001
In the Corporation act 2001, all the proprietary companies are required to keep accurate records for recording and
explaining the transactions as well as financial position. It is also enables the company to prepare true and fair
financial statements of company for auditing. The financial records under the act refers to systematic record of the
transactions of company and not merely collection of the receipts, bank statements, invoices and the cheques that
are kept over computer
Question 8
Explain Australian, international and local legislation and conventions that are relevant to financial management
in the organisation(Word count should be about 80 words)*}
Regarding the financial management company is required to comply with below legislations and conventions
Competition and Consumer Act, 2010
It ensures that healthy competition is maintained between the companies and to avoid exploitation of the
consumers of Australia through high prices.
Privacy Act 1988
The act promotes and protects privacy of the individuals and regulates Australian government bodies and agencies
with annual turnover of 3 million or more to handle personal information carefully of people.
National Employment Standard under Fair Work Act 2009
It is applicable to the national workplace relation system employees.
World trade organisation and 10 things WTO could do
It requires organisations to comply with international rules for trade.
*{List four conventions that are unilaterally accepted as sound financial management practices (each convention
should be approximately 50 words.)*}
The four unilaterally accepted accounting conventions are
Consistency, conservatism, materiality and full disclosures. These accounting conventions requires accounting
methods to be consistent, should be prepared with proper verification, all the material information is recorded and
disclosures influencing the decisions should be made. It enables the company to make accounting records free from
errors and mistakes.
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Question 9
Explain the requirements for registered foreign companies regarding preparing and lodging financial reports.
(Word count should be about 50 words)*
Its}It is required to lodge the financial statements at least one time with ASIC in calendar year. Gap
between two financial statements should not be higher than 15 months. Financial statements are to be
made of
 Copy of income statement, balance sheet and cash flow statement
 Form 405 Statement for verifying financial statements
 Other documents required by laws at place of incorporation
Question 10
{*Identify the current company tax rate for both small and large businesses for the financial years as below:*}
Small Business
( Defined as an aggregate turnover
of less than $50million)
FY2019/2020
27.5%
FY2020/2021
26%
Large Business 30% 30%
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Question 11
Give a short explanation of the process – the type of reporting and timing of reporting, by which a business reports GST to the
Australian Tax Office.(Short answer or dot points are acceptable) *}
GST is reported using default BAS reporting method. If turnover is higher than 10 million full reporting method is used. Company
may also use quarterly or annual reporting method for the GST payments. The reporting method is rolled over at end of financial
year based over GST. Business is required to complete the GST calculations worksheet. The payments for GST has to be made
timely as it will attract penalties for non reporting.
Question 12
Identify the penalty rate to be applied if a supplier does not provide an ABN?(Short answer or dot points are acceptable)*}
If supplier do not provide ABN amount from payment has to be withhold and it is referred as no ABN withholding. Rate of
withholding is 49%. Some of the suppliers are not required ABN and they could use statement by supplier to justify no
withholding from payment. ABN is not valid or details are not matching with supplier than also the payment has to be withhold
at 49% from supplier.
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Question 13
A non-profit organisation needs to register for GST after it has a turnover of more than how much?
(Short answer or dot points are acceptable)*}
NPO is required to register the business for GST if turnover exceeds $150000 per year. If turnover is below the threshold limit
than registration is optional for the business. For registration business is required to have ABN which is obtained when business
is registered.
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Question 14
Give a short explanation of the difference in employer Pay As You Go withholding obligations for employees and contractors.
(Short answer then word count of 30 words for each)*}
PAYG obligation category The employers PAYG obligation - explanation
Employees PAYG is not applicable to the payments made to contractors.
Payment made to bonafide contractor is not subject to the super
contributions. Contractor providing ABN is not covered under
superannuation provisions.
Contractors PAYG reporting and withholding is applicable to wages and the
salaries paid to the employees. Employers are required to do
superannuation contributions on the behalf of employees
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