Finance Module Assignment: Accounting System and Process Analysis

This assignment delves into various aspects of accounting systems and processes, utilizing spreadsheets for financial calculations, data management, and representation of negative numbers. It covers inventory systems, including periodic systems, and demonstrates the use of spreadsheets as acco...Read More

Running head: ACCOUNTING SYSTEM AND PROCESS
Accounting system and process
Name of the University
Subject code and name ‘
Student Name and ID
Assignment Task Number
Author Note

1ACCOUNTING SYSTEM AND PROCESS
Table of Contents
Answer 1:................................................................................................................................................3
Answer 2:................................................................................................................................................3
Answer 3:................................................................................................................................................4
Answer 4:................................................................................................................................................4
Answer 5:................................................................................................................................................5
Answer 6:................................................................................................................................................5
Answer 7:................................................................................................................................................7
Answer 8:................................................................................................................................................9
Answer 9:..............................................................................................................................................10
Answer 10:............................................................................................................................................10
Answer 11:............................................................................................................................................10
Answer 12:............................................................................................................................................11
Answer 13:............................................................................................................................................11
References:............................................................................................................................................14

2ACCOUNTING SYSTEM AND PROCESS
Answer 1:
After the cells in the spreadsheet are named, it can be efficiently used for the purpose of
managing, editing, deleting and updating (Arnold, 2013). Further, the users can make various
calculations using the formulas only if the cells are named. Moreover, naming the cells makes it
easier and simpler for using it as table, function and constant.
Answer 2:
Under the spreadsheet the negative numbers may be represented through applying red colour,
parentheses or with minus sign (Baños-Caballero, García-Teruel & Martínez-Solano, 2014). The user
can represent the negative numbers through selecting the specific cell or the cell range and then
pressing the CTRL and 1 key together, the number or the currency is to be selected and under that the
option of negative number is to be selected. Negative data are shown within bracket instead of
showing it with minus sigh make the data more clear and visible.
Example showing the negative numbers within bracket is shown below -

3ACCOUNTING SYSTEM AND PROCESS
Answer 3:
As the spreadsheet includes various data that is inclusive of both processed as well as
unprocessed data, it will be easier for the user to use the data if it is segregated under report area and
data area. Further, it enables the user to make the adjustments from the raw data and put it in the
report area.
An example that shows different data area and the report area is as follows –

4ACCOUNTING SYSTEM AND PROCESS
Answer 4:
IF function under the spread sheet, enables the user to quantify whether the required condition
is satisfied or not. This function is used to find out the logical function like TRUE or FALSE. When
the condition is satisfied the IF functions returns the TRUE value and while it is not satisfied the IF
function returns the FALSE function.
The following is an example of spreadsheet that shows the IF functions for the normal view:
IF functions as formula view

5ACCOUNTING SYSTEM AND PROCESS
Answer 5:
Periodic systems of the inventory:
It is the arrangement of keeping up the inventories. Under the periodic framework, the stock
level and the cost of merchandise sold points of interest are not updated on regular basis (Brigham,
2014). Rather, the buys and sales exchanges are recorded through the single entry of journal at the
end of the period
The example is given as follows:
Answer 6:
Fancy Footwear- Adjusted spreadsheet as normal view:

6ACCOUNTING SYSTEM AND PROCESS
Fancy Footwear- Adjusted spreadsheet as formula view
Statement of Income in normal view:

7ACCOUNTING SYSTEM AND PROCESS
Statement of Income in formula view:

8ACCOUNTING SYSTEM AND PROCESS
Balance Sheet in normal view:

9ACCOUNTING SYSTEM AND PROCESS
Balance Sheet in formula view:

10ACCOUNTING SYSTEM AND PROCESS
The uses of the spreadsheet as an accounting tool:
 In this technique, it winds up noticeably less demanding to do the figuring with the assistance
of the formula, which can be utilized as a part of the spreadsheet.
 The arranging of the information according to the size, numbers, textual style and content
required should likewise be possible (Petty et al., 2015).
 In this specific circumstance, the diagrams and the outlines can likewise be utilized by the
necessity and to break down and analyze the information.
 If a specific cell does not require to be demonstrated then it can be covered up
Answer 7:
Inventory in the normal view:

11ACCOUNTING SYSTEM AND PROCESS
The calculation of Gross Profit as a normal view:
Inventory as the formula view:
The calculation of the Gross Profit as the formula view:
After making the data changes:
Inventory

12ACCOUNTING SYSTEM AND PROCESS
Gross Profit
Answer 8:
The reconciliation of the bank in normal view:
The reconciliation of bank as formula view:

13ACCOUNTING SYSTEM AND PROCESS
After making the changes in the data:
Normal view:

14ACCOUNTING SYSTEM AND PROCESS
Answer 9:
The journal entries for the account receivables:
Date Particulars Debit ($) Credit ($)
1st October Johnson account
To sales
10,000
10,000
1st October Account receivable
To Johnson account
10,000
10,000
15th December Cash account
To accounts receivable
7,000
7,000
31st December Receivable allowance
To Johnson
3,000
3,000
Answer 10:
Determination of bad-debt
The Write-off approach – under write-off approach doubtful debt is not estimated. Rather the
expenses of bad debts are recognized after it is established that the amount will not be recovered.
Journal entry for writing-off of $ 5,000 is shown as follows:
The Allowance approach – under this, the expenses related to bad-debts is determined and recognized
under the period during which the associated revenue is recovered.
In this approach, the journal entry made as follows:

15ACCOUNTING SYSTEM AND PROCESS
Answer 11:
On the off chance that the organization's turnover ratio with regard to the receivables due is
high, it shows that the organization's administration is proficient as to gathering of the sum from the
indebted individuals rapidly, which it turn speak to a solid and sound monetary position (Bryce,
2017).
Answer 12:
Entry of journals

16ACCOUNTING SYSTEM AND PROCESS
Answer 13:
1. Business activities by Wesfarmers group are -
 Retail stores related items
 Liquor and nourishment business
 Commodities identified with wellbeing
 Commodities identified with home change
 Commodities elated to Office change
 Energy items and products in connection to chemicals
2. Statement of comprehensive income:
The measure of benefit owing to holding organization is expressed through the announcement
for far reaching earning. For the year closing dated 3oth June 2016, the organization couldn't create
any positive comprehensive earning and the losses added up to $ 78 million. The report additionally
uncovered the foreign trade exchange that included a measure of $ 15 million.
3) Items from the financial statement:
Dividend - it is recorded only after the privilege to receive the benefit is shaped. The organization is
very customary in paying the dividend. Furthermore, for the year shutting dated 30th June 2016 the
installment of profit was $ 2600 million.
Per share profit – The basic and diluted income per offer of the organization esteemed for the year
finished 2016 was 36.2 pennies. EPS is ascertained by partitioning the organization' benefits by the
weighted normal number of offers
Equity return – this value is figured as $407/$22949 = 0.018, which is considered as extremely poor
when contrasted with the business normal. The proportion additionally uncovers that the organization
not proficient in making returns on the investor's riches
Risk and mitigation - risk exists in the unwavering quality, precision, culmination of the money
related proclamation of the organization. Further, the organization does not guarantee that the
announcement is free from material misquote, blunder or extortion. To limit the hazard the
organization takes after the elucidation of IFRS and reasonable structure issued by AASB in the
money related proclamation readiness (Wesfarmers.com.au, 2017).
Sustainability -As the organization can procure create positive salary reliably for past years and have
upper hands over the contenders, they are viewed as manageable for long-run (Drury, 2013).
Income statement-
To get the profit from revenue, the operating expenses are deducted from the amount. Further,
the amount of tax and interest are deducted to get the final net profit.
Balance sheet is divided in:
 Equity attributable to shareholders
 Total assets divided as current and non-current
 Total liabilities divided as current and non-current

17ACCOUNTING SYSTEM AND PROCESS
4) Working Capital Ratio:
5) Profit after tax
Net profit
after tax
2016 2015 2014 2013 2012
0
500
1000
1500
2000
2500
3000
Amount ($ m)
Amount ($ m)

18ACCOUNTING SYSTEM AND PROCESS
Advice for Vikram:
As the company is consistent paying the dividend and earning positive and consistent profit
over the last 5 years, it is suggested that Vikram can think of investing his money in Wesfarmers
Group.

19ACCOUNTING SYSTEM AND PROCESS
References:
Arnold, G. (2013). Corporate financial management. Pearson Higher Ed.
Baños-Caballero, S., García-Teruel, P. J., & Martínez-Solano, P. (2014). Working capital
management, corporate performance, and financial constraints. Journal of Business
Research, 67(3), 332-338.
Brigham, E. F. (2014). Financial management theory and practice. Atlantic Publishers & Distri.
Bryce, H. J. (2017). Financial and strategic management for nonprofit organizations. Walter de
Gruyter GmbH & Co KG.
DRURY, C. M. (2013). Management and cost accounting. Springer.
Petty, J. W., Titman, S., Keown, A. J., Martin, P., Martin, J. D., & Burrow, M. (2015). Financial
management: Principles and applications. Pearson Higher Education AU.
Wesfarmers.com.au. (2017). Retrieved 16 September 2017, from
https://www.wesfarmers.com.au/infodetail/about/investors/2015AnnualReport.pdf