FNSACC301: Process Financial Transactions Assessment Solution

This document presents a comprehensive solution to the FNSACC301 assessment, focusing on processing financial transactions. It covers key accounting concepts such as debit and credit formulas, and the process before taking a deposit to the bank. The solution outlines common errors in financial transactions, methods for reconciling transactions, and the significance of proof of lodgement. It addresses special transaction types, the handling of confidential information, and the impact of legislation on financial reporting. Additionally, it explores policies and procedures for controlling spending, security checks for cheques and vouchers, and features of key financial reports. Section B includes practical examples like preparing a special transaction for a bad debt and completing a balance sheet for a new business. This assessment is designed to evaluate the student's understanding of fundamental accounting principles and their practical application in financial transaction processing. The assignment is from Australian Harbour International College.

Australian Harbour International College
RTO ID: 41338 CRICOS Provider Code: 03449J
ABN: 74 603 036 102
T: 02 9268 0085
E: [e-mail]
W: www.ahic.edu.au
A: Level 4, 114-120 Castlereagh Street
Sydney NSW 2000 Australia
Assessment Details
Qualification Code/Title
Assessment Type Assessment -01 ( Short Questions
Answer) Time allowed
Due Date Location AHIC Term / Year
Student Details
Student Name Student ID
Student Declaration: I declare that the work submitted is my own,
and has not been copied or plagiarised from any person or source.
Signature: ____________________________
Date: _____/______/__________
Assessor Details
Assessor’s Name
RESULTS (Please
Circle) SATISFACTORY NOT SATISFACTORY
Feedback to student:
.........................................................................................................................................................................................
.........................................................................................................................................................................................
.........................................................................................................................................................................................
.........................................................................................................................................................................................
........................
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 appeal rights.
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.
Signature: ________________________________________
Date: ______/_______/___________
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
File Name :FNSACC301 Process financial transactions
and extract interim reports
Version 7.0/ August
2016
Review Date:
February 2017
Page 1 of 9
Unit of Competency
National Code/Title FNSACC301 Process financial transactions and extract interim reports

Australian Harbour International College
RTO ID: 41338 CRICOS Provider Code: 03449J
ABN: 74 603 036 102
T: 02 9268 0085
E: [e-mail]
W: www.ahic.edu.au
A: Level 4, 114-120 Castlereagh Street
Sydney NSW 2000 Australia
Instructions to the Candidates
Instructions to the Candidates
 This assessment is to be completed according to the instructions given below in this document.
 Should you not answer the tasks correctly, you will be given feedback on the results and gaps in knowledge.
You will be entitled to one (1) resubmit in showing your competence with this unit.
 If you are not sure about any aspect of this assessment, please ask for clarification from your assessor.
 Please refer to the College re-submission and re-sit policy for more information.
 If you have questions and other concerns that may affect your performance in the Assessment, please
inform the assessor immediately.
 To be deemed competent for this unit you must achieve a satisfactory result with tasks of this assessment
along with a satisfactory result for the other assessment (Project)
 There are two sections in this assessment.
 This is an Open book assessment which you will do in your own time but complete in the time designated by
your assessor. Remember, that it must be your own work and if you use other sources then you must
reference these appropriately.
 This is Individual Assessments. Once you have completed the assessment, please provide the Hard copy of
the Assessments to your Trainer/ Assessor.
 Plagiarism is copying someone else’s work and submitting it as your own. Any Plagiarism will result in a mark
of Zero.
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
File Name :FNSACC301 Process financial transactions
and extract interim reports
Version 7.0/ August
2016
Review Date:
February 2017
Page 2 of 9

Australian Harbour International College
RTO ID: 41338 CRICOS Provider Code: 03449J
ABN: 74 603 036 102
T: 02 9268 0085
E: [e-mail]
W: www.ahic.edu.au
A: Level 4, 114-120 Castlereagh Street
Sydney NSW 2000 Australia
Assessment 1
Section A
Question 1
What is the debit and credit formula for each account type? (50– 70 words)
The debit and credit formula for each account type is that the total value of assets
should be equal to the liabilities plus equity for a particular financial year. Therefore
when a particular asset account is debited, another related asset account has to be
credited or a corresponding liability or equity account must be increased by the same
amount that is the particular liability or equity account must be credited in order to
balance the debit and credit entries. Therefore for each debit entry there must be a
corresponding credit entry of the same amount.
Question 2
What should be done before taking a deposit to the bank? (80–100 words)
Before taking a deposit to the bank an individual has to make sure that he has opened
an account in the bank. Then it has to be decided how the customer wants to make the
particular deposit, if the customer wants to deposit money directly then he has to fill
up the deposit slip and then make the necessary payments, if he wishes to make
payment with the help of an ATM machine or online or via email then for this purpose
the client does not need to visit the branch.
Question 3
List and briefly describe five errors that are typically made when processing financial transactions.
(80–100 words)
The five errors that are typically made when processing financial transactions are:
 Error of material misstatement – this error occurs when a particular account
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
File Name :FNSACC301 Process financial transactions
and extract interim reports
Version 7.0/ August
2016
Review Date:
February 2017
Page 3 of 9

Australian Harbour International College
RTO ID: 41338 CRICOS Provider Code: 03449J
ABN: 74 603 036 102
T: 02 9268 0085
E: [e-mail]
W: www.ahic.edu.au
A: Level 4, 114-120 Castlereagh Street
Sydney NSW 2000 Australia
balance has been under or overstated.
 Errors of omission - omission errors occur when a particular transaction has
been omitted or has not been recorded in the books of accounts.
 Errors of commission – commission errors involve errors like wrong side posting
or errors at the time of recording a single transaction.
 Compensating errors – when a certain error like debiting an account wrongly is
compensated by another wrong entry of the same amount that has been
credited it is called a compensating error. It does not affect the trial balance
 Errors of duplication – errors in relation to double recording of the same
transaction are called error of duplication.
Question 4
When you are reconciling transactions, what can you use as proof of lodgement? (100–120 words)
While reconciling transactions the proof of lodgement may be any document that is
provided by the external stakeholder as a proof of purchase or proof of the transaction
that is carried out between the organization and the external stakeholder. The proof of
lodgement has to contain the stamp or signature of the entity providing such a
document and should also clearly state the transaction that has taken place. Proof of
lodgement may be bills, invoices, deposit slips and purchase bills.
Question 5
List and describe (50–80 words) five types of special transactions.
The five special types of transactions are:
 Cash withdrawal by the owner of business
 Sale of non-current assets
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
File Name :FNSACC301 Process financial transactions
and extract interim reports
Version 7.0/ August
2016
Review Date:
February 2017
Page 4 of 9

Australian Harbour International College
RTO ID: 41338 CRICOS Provider Code: 03449J
ABN: 74 603 036 102
T: 02 9268 0085
E: [e-mail]
W: www.ahic.edu.au
A: Level 4, 114-120 Castlereagh Street
Sydney NSW 2000 Australia
 Bad debt written off
 Bad debt recovered
 Bills payable met
Question 6
How should you deal with confidential information? Provide three examples of breaches of
confidentiality. (120–150 words)
Confidential information should be highly secured and should be protected with the
help of passwords or login codes that shall be available only to the officials whose work
is directly related to that particular information. Enough initiative should also be taken
in order to back up the confidential information in case of loss of data or corruption of
the files containing such information.
Three examples of breaches of confidentiality are:
 Unauthorized access of files containing client information
 Usage of an employee’s password by another individual with or without his
consent in order to access company information
 Sharing employee information or crucial information with third party
Question 7
What aspects of legislation can impact upon financial transactions and reporting? (80–100 words)
The aspects of legislation that can impact financial transaction and reporting are the
legislations defining the rules and regulations that have to be followed in order to
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
File Name :FNSACC301 Process financial transactions
and extract interim reports
Version 7.0/ August
2016
Review Date:
February 2017
Page 5 of 9

Australian Harbour International College
RTO ID: 41338 CRICOS Provider Code: 03449J
ABN: 74 603 036 102
T: 02 9268 0085
E: [e-mail]
W: www.ahic.edu.au
A: Level 4, 114-120 Castlereagh Street
Sydney NSW 2000 Australia
prepare the financial statements of a particular organization. For instance the
Australian Accounting Standards Board lays down the format for the preparation of the
balance sheet, income statement and other components of the accounting statements.
Now a particular modification in the standard established by the Board may lead to
changes in the treatment of a financial transaction and reporting of that particular
component thus impacting the financial transactions and reporting hugely.
Question 8
How can policies and procedures control spending? (80–100 words)
Business owners for the purpose of controlling spending maintain a petty cash account
with a previously fixed amount. This meant that the management would not allow
expenditure of cash in a particular month by a stipulated amount. Moreover each and
every transaction shall be reconciled and the spending of cash at each event shall
have to be approved by the appropriate authority. The petty cash account shall be
reimbursed at the end of each month.
Question 9
What security checks should be applied to cheques or vouchers? List and describe five checks.(80–
100 words)
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
File Name :FNSACC301 Process financial transactions
and extract interim reports
Version 7.0/ August
2016
Review Date:
February 2017
Page 6 of 9

Australian Harbour International College
RTO ID: 41338 CRICOS Provider Code: 03449J
ABN: 74 603 036 102
T: 02 9268 0085
E: [e-mail]
W: www.ahic.edu.au
A: Level 4, 114-120 Castlereagh Street
Sydney NSW 2000 Australia
The security checks that should be applied to cheques or vouchers are that
appropriate date and signature has been applied on the cheques at the specified
places. The amount mentioned on the cheque or the voucher should be cross ckecked
with the creditor and the supplier. Moreover the cheque or voucher shall only be
passed after proper authorization by the appropriate authority.
Question 10
List and describe (50–80 words) the key features of three reports.
The three reports are:
 Balance sheet – a balance sheet provides an overview into the assets, liabilities
and equity incurred by business during a particular financial year.
 Income statement – an income statement essentially calculates the total
revenue after tax that is incurred by business during a particular financial year.
 Statement of cash flow – a statement of cash flow provides an estimate of the
inflow and outflow of cash in business.
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
File Name :FNSACC301 Process financial transactions
and extract interim reports
Version 7.0/ August
2016
Review Date:
February 2017
Page 7 of 9

Australian Harbour International College
RTO ID: 41338 CRICOS Provider Code: 03449J
ABN: 74 603 036 102
T: 02 9268 0085
E: [e-mail]
W: www.ahic.edu.au
A: Level 4, 114-120 Castlereagh Street
Sydney NSW 2000 Australia
Section B
Question 1
Prepare the special transaction:
A debtor, B Brown, has an opening balance of $535.00. After repeated attempts to contact the
debtor you decide the debt is a bad one and will write it off. The debt occurred using docket R4502.
Debtor’s ledger
B Brown
Date Docket Details Debit Credit Balance
R4502 Opening Balance 535 0
R4502 Writing off the Debtor Account 535
Bad debt account
Debtors
Date Docket Details Debit Credit Balance
R4502 Debit the bad debt
account 535 535
Question 2
A new business is established using $25,000.00 of owner’s equity. Complete the balance sheet:
Balance sheet
Assets—Dr Liabilities—Cr
Bank $25000 Owner’s equity capital $25000
Totals $25000
Australian Harbour International College, 114-120 Castlereagh Street, Sydney NSW 2000, Australia
|RTO NO: 41338 | CRICOS Provider Code: 03449J
File Name :FNSACC301 Process financial transactions
and extract interim reports
Version 7.0/ August
2016
Review Date:
February 2017
Page 8 of 9