Book Keeping in Accounting Assignment - Finance Module

This document presents a comprehensive solution to a book keeping assignment, addressing various aspects of accounting practices. The assignment covers topics such as maintaining client relationships, distinguishing roles of accountants and bookkeepers, and the importance of engagement letters. It delves into the requirements for small businesses, including GST registration, PAYG withholding, and Fringe Benefits Tax. The solution explores different accounting systems, petty cash management, and accounts receivable flow charts. It also examines team dynamics, reporting, and employee motivation. Furthermore, the assignment provides insights into professional service improvements, the roles of accountants and bookkeepers, and the requirements for BAS agent registration. The document includes references to relevant accounting standards and legislation.

Running head: BOOK KEEPING IN ACCOUNTING
Book Keeping in Accounting
Name of the Student:
Name of the University:
Authors Note:

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BOOK KEEPING IN ACCOUNTING
Contents
Task 1:.............................................................................................................................................2
Part a:...........................................................................................................................................2
Part b:...........................................................................................................................................2
Par c:............................................................................................................................................4
Part d:...........................................................................................................................................4
Part e:...........................................................................................................................................5
Part f:...........................................................................................................................................6
Answer 2:.........................................................................................................................................6
Part b:...........................................................................................................................................7
Part c:...........................................................................................................................................8
Answer 3:.........................................................................................................................................9
Part a:...........................................................................................................................................9
Part b:...........................................................................................................................................9
Part c:.........................................................................................................................................10
Answer 4:.......................................................................................................................................11
Part a:.........................................................................................................................................11
Part b:.........................................................................................................................................11
Part c:.........................................................................................................................................11
Part d:.........................................................................................................................................11

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BOOK KEEPING IN ACCOUNTING
Part e:.........................................................................................................................................12
Answer 5:.......................................................................................................................................12
Part a:.........................................................................................................................................12
Part b:.........................................................................................................................................13
Part c:.........................................................................................................................................13
Part d:.........................................................................................................................................13
References:....................................................................................................................................15

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BOOK KEEPING IN ACCOUNTING
Task 1:
Part a:
Keeping an effective communication with the clients is important to not only maintain a good
relationship with the clients but also to understand the different requirements of the clients and
accordingly provide services to clients to fulfill those requirements.
Part b:
Business needs Accountant
(Registered with
TPB and ASIC)
Bookkeeper
(Registered with
TPB)
Tax Agent
(Registered with
TPB and ASIC)
Petty cash and bank
reconciliation
To maintain
proper accounting
records for petty
cash expenses.
Preparation of
periodical bank
reconciliation
statement.
Maintain books of
accounts.
X
Prepare depreciation
schedule
Record
depreciation
entries correctly.
Correctly calculate
depreciation in the
books of accounts.
To check whether
depreciation is
accordance with tax
laws for tax

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BOOK KEEPING IN ACCOUNTING
purposes.
Accounts receivable
and payable functions
Preparation of
accounts payable
and accounts
receivable.
Maintain accounts
payable and
receivable books
correctly.
X
Prepare and lodge tax
returns and ASIC
Prepare and lodge
return
X Check the returns
Payroll functions Prepare and
maintain payroll
schedules
Properly include
payroll in books of
accounts
X
Prepare and lodge
activity statements
Prepare and lodge
such statement
X X
Prepare accounts to
trial balance
Trial balance
preparation
X X
Prepare and analyse
financial reports
Preparation of
financial reports
X X
Prepare and lodge
Company Tax Return
X X Preparation and
lodging of Company
Tax Return
Maintain records of X Maintain all such X

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BOOK KEEPING IN ACCOUNTING
transactions transactions in books
of accounts.
Par c:
(i) Auditors and qualified Certified Accountants of Australia.
(ii) Superannuation and investment experts.
(iii) Information & Technology professionals.
(iv) Financial advisers.
Part d:
Letter of Engagement
To,
Mr David Brown,
51 Burke Street,
Melbourne, Vic-3000
Australia.
Ref: Engagement letter:
Respected sir,
This letter will help you understand the scope of our work in relation to your business. Our
responsibility is to prepare the books of accounts for your business based on the information
provided by you and your staffs. Thus, we shall not verify the true and fair nature of the

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BOOK KEEPING IN ACCOUNTING
information. It is not an audit engagement rather an engagement to maintain the books of
accounts to record financial transactions of your business in the books of accounts. The books of
accounts shall be prepared in accordance with the applicable accounting standards to the nature
of business carried out by you. Up-to-date accounting records shall be maintained and provided
to your staffs as and when required to enable them to take important business decisions. The
information collected about your business shall not be disclosed by us to anyone without your
permission and as required under the laws (Guthrie and Parker, 2016). In case of any
contravention with the terms and conditions of the engagement then the engagement shall be
liable to be cancelled based on your final assessment and decision on the issue.
Please carefully read the above letter and acknowledge the engagement letter. In case of any
confusion with any points of the letter please do not hesitate to contact.
Regards,
(Name of the student)
Part e:
1. Have the necessary information required by the client has been made available to the client as and
when needed?
2. Do the client have up-to-date accounting information to assess and evaluate the financial position
of the business at any point of time?
3. Is the books of accounts have been prepared correctly as per the accounting standards in the
country?
Part f:
1. Integrity.

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BOOK KEEPING IN ACCOUNTING
2. Honesty.
3. Reliable.
4. Confidentiality.
5. Privacy.
Answer 2:
(i) The small business must keep records of its financial transactions in an appropriate manner to
correctly portray the true and fair picture of the small business as on a particular date. The
books of accounts must be maintained in accordance with applicable accounting standards in
the country. Small businesses required to maintain books of accounts and prepare profit and
loss account and balance sheet as at the end of each accounting year (Carnegie, 2014).
(ii) GST registration is mandatory for small business with GST turnover threshold limit of
$75000 per annum. For GST all input and output documents shall be maintained properly.
GST on sales shall be paid after deducting input GST paid by the business. GST returns shall
be filed as per the Income Tax Assessment Act 1997.
(iii) PAYG withholding is the liability of the employer to withholding certain amount of gross
salaries and wages to be paid to the employees. PAYG Withheld must be deposited to the
credit of central Government on or before due date as per the guidelines issued by the
Australian Taxation Office (ATO).
(iv) Fringe Benefits Tax is the tax payable by the Employer for certain kind of non-monetary
benefits provided to the employees. Employer in order to motivate the employee often incurs
additional expenditure by providing non-monetary benefits such as car facility, house, loan
without or at concessional rate of interest etc. FBT is calculated on the grossed up value of
such benefits as per the taxation law in the country (Sangster, 2015).
(v) Payroll tax is the tax payable by the employees for the profession he or she is in.

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BOOK KEEPING IN ACCOUNTING
Part b:
Screen shot of Balance sheet.

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BOOK KEEPING IN ACCOUNTING
Part c:
Requirement Authority Research source
Business Activity
Statement (BAS)
requirements
Australian Taxation
Office (ATO)
www.ato.gov.au
Australian Accounting
Standards
Australian Accounting
Standards Board
(AASB)
www.aasb.gov.au
Tax Practitioners
Board requirements
Tax Practitioners
Board (TPB)
www.tbp.gov.au
Privacy Act Office of the
Australian Information
Commission
www.oaic.gov.au/privacy-law/
Taxation Act Income Tax
Assessment Act 1997
www.legislation.gov.au/Details/C2017C00336

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BOOK KEEPING IN ACCOUNTING
Trade Practices Act Federal Register of
Legislation
www.legislation.gov.au/Details/C2010C00426
Answer 3:
Part a:
I. Accounting system.
II. Information system.
III. Management system.
IV. Data processing system.
Part b:
Development of petty cash system policy:
The cash disbursed for petty cash expenses by the cashier shall be recorded as receipt in petty
cash system. The different petty cash expenses incurred from such amount shall be recorded as
payments in the petty cash system. The balance in petty cash system after petty cash
expenditures if negative then the amount shall be reimbursed by the cashier. In case the amount
is positive then the amounts shall be transferred to the cashier (Chenhall and Moers, 2015).

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BOOK KEEPING IN ACCOUNTING
The petty cash claim of employees shall be met by signing petty cash vouchers by the
concerned employees. The petty cash expenses shall not be met above a certain limit for the
employees.
Checking the petty cash claim document properly to evaluate whether the cash expenses
is properly supported by necessary documents to justify such petty cash expenses. All the
supporting documents must be attached with petty cash vouchers. The vouchers shall have
proper authorization to ensure that only eligible expenses are paid from petty cash (Andersson
et. al. 2016).
Part c:
The accounts receivable flow chart provided in the document lacks clarity and is not effective. A
standard accounts receivable flow chart shall be as following instead of the one provided in the
document.

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BOOK KEEPING IN ACCOUNTING
Answer 4:
Part a:
Autonomously:
I. Sole proprietorship business.
II. Ability to take decisions and understand situations quickly.
III. Confidence.
Team environment:
I. Team spirit.
II. Friendly work environment.
III. Efficient Management.
IV. Cooperation between team members.
V. Single Objective and aim.
Part b:
I. Report though STP for A (client).
II. 2018 summary of PAYG withholding payment annual report for B (client).
III. Monthly Business Activity Statement (BAS) for B for the month of June.
IV. Quarter 4 (June) BAS for B.
Part c:
By communicating the efforts to the employees and if possible by rewarding the employees for
their efforts and contributions will encourage the employees to give their best for an
organization.

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BOOK KEEPING IN ACCOUNTING
Part d:
I. Evaluation of steps taken.
II. Assessment of the results achieved by the team.
III. Comparison of the results achieved by the team with the objectives.
IV. Identification of the gap between the results achieved and the desired objectives.
V. Identification of the reasons for the gap and other problems.
VI. Taking necessary steps to resolve such issues.
Part e:
Innovation of new technology has changed the way business organizations used to function once.
In fact accounting services and book keeping services have also changed significantly with the
innovation and technology coming to the fore front with new accounting system and software.
Thus, it is essential to change the way work used to be perform earlier to be relevant in the
profession.
Answer 5:
Part a:
I. The specific goal is to improve the quality of professional services.
II. The performance shall be measured by measuring the revenue generated from professional
services.
III. The goal is to have large number of clients in future which is quite attainable by improving
the quality of services.
IV. Realistically it is possible to even increase the professional fees by improving the quality of
professional services.
V. The time frame shall be decided within which the above goals have to be achieved by the
professionally qualified accountant and book keeper.

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BOOK KEEPING IN ACCOUNTING
Part b:
I. Improvement of professional services is possible by increasing the knowledge in the field of
accounting. Apart from that use of new and innovative technology would help the
professional to improve the quality of professional services.
II. Proper feedback shall be collected to measure the quality of professional services.
III. Larger client base shall be achieved by adverting and marketing.
IV. Professional fees shall be increase subsequent to improving the quality of professional
services.
V. Period of review of professional services and client base shall be conducted.
Part c:
Association with the Certified Public Accountants is as an accountant whereas association with
the clients to prepare books of accounts is as a book keeper.
Part d:
A person must be above 18 years old in order to be eligible to apply for registration as Individual
BAS agent with Tax Practitioners Board (TPB). In addition the following are the minimum
requirements to be eligible to be an individual BAS agent:
I. The person must obtain at-least a Certificate IV in Finance Registered Training Office
(RTO).
II. The person must be of sound mind and fit.
III. There should not be any legal case pending against the person.
IV. The person should not have been convicted under case or law in or outside the country.
V. The person should not be insolvent.
VI. The person should apply online in the TPB portal to become a BAS agent.

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BOOK KEEPING IN ACCOUNTING
VII. Shall fill up the online form and attached all necessary documents during the filing process of
on-line application (Andersson et. al. 2016).