King Edward VII College: BSBFIM501 Business Diploma Solution

This assignment solution covers several aspects of a Business Diploma, including double-entry bookkeeping, cash and accrual accounting, depreciation, GST regulations, and employer tax obligations. It also includes a projected and actual marketing budget for 2017, analyzing variances and proposing adjustments, such as increasing the TV advertisement budget. The solution further analyzes the financial performance of Melbourne and Sydney campuses, comparing budget vs. actual sales, expenses, and net profit, identifying significant variances in expenses like electricity, gas, and office supplies. The document also touches upon key principles for managing a chart of accounts and the purpose of a profit and loss statement. Finally, aged debtor summaries and finance policies are mentioned, showcasing a broad understanding of financial management within a business context. Desklib offers additional resources like past papers and solved assignments for students.

Running Head: BUSINESS DIPLOMA 1
Business Diploma

BUSINESS DIPLOMA 2
Table of Contents
Assessment 1...................................................................................................................................4
Question 1....................................................................................................................................4
Question 2....................................................................................................................................4
Question 3....................................................................................................................................4
Question 4....................................................................................................................................5
Question 5....................................................................................................................................5
Question 6....................................................................................................................................5
Question 7....................................................................................................................................6
Question 8....................................................................................................................................6
Question 9....................................................................................................................................6
Question 10..................................................................................................................................6
Question 11..................................................................................................................................6
Question 12..................................................................................................................................7
Question 13..................................................................................................................................7
Question 14..................................................................................................................................7
Question 15..................................................................................................................................7
Question 16..................................................................................................................................8
Question 17..................................................................................................................................8
Question 18..................................................................................................................................8

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Question 19..................................................................................................................................8
Question 20..................................................................................................................................9
Assessment 2...................................................................................................................................9
Assessment 3.................................................................................................................................10
Assessment 4.................................................................................................................................10
Assessment 5.................................................................................................................................11
References......................................................................................................................................13

BUSINESS DIPLOMA 4
Assessment 1
Question 1
The basic principle of double entry book keeping is that, for every transaction, there are
always two entries. One entry is known as the debit entry and the other is known as the credit
entry (Sangster, 2015). These entries are often displayed in the 'T' accounts. The debit here refers
to increase in an asset, increase in an expense, decrease in a liability or decrease in income
(Sangster, 2015). And the credit represents the decrease in an acid, decrease in an expense,
increase in a liability and increase in income (Sangster, 2015).
Question 2
In accounting method where the payment receipts are recorded during the time when they
are received, where as the expenses are recorded at the time when they are actually paid, is
known as cash accounting (Kieso, Weygandt & Warfield, 2010). It is also known as cash-basis
accounting because the recording of revenue and expenses is done only when cash is paid and
received. One of the advantages of cash accounting as that it is the simplest method of recording
transactions as there only related to cash. The main disadvantage of this method is that it is not
very accurate.
Question 3
Accrual basis of accounting is that accounting method where the transactions are
recorded as and when they occur, which means only at the time of their occurrence (Needles,
Powers & Crosson, 2013). The advantage of accrual basis of accounting is that it is very
accurate. The main disadvantage is that it requires the recording of transactions to be done only
at the time of their occurrence.

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Question 4
The reporting in calculation of depreciation is based upon to accounting principles named
cost principle and matching principle (Cotter, 2012). The former requires the expense of
depreciation and the asset amount to be based on the original cost of the asset. The letter
principal requires that the cost of an asset should be allocated to the expense of depreciation over
the asset's life.
Question 5
The New Tax System Act 1999 serves the purposes of tax periods and invoices, financial
supplies and reduced input tax credits (James, Sawyer & Wallschutzky, 2015). It prescribes the
additional information required for being contained in the tax invoices. It gives meaning to the
term financial supply which is input taxed under the GST act. It also sets out a list of decreased
credit acquisition.
Question 6
An employer is obligated to pay the employees portion of taxes. Firstly they should
register for the PAYG withholding (Lignier, Evans & Tran-Nam, 2014). Then an employer
should work out the status of the employees, next the need to work out the amount to be
withheld. The vigil amount should be reported and paid to the government. Finally, payment
summary should be provided to employees. Under the guarantee of superannuation, the
employees need to pay superannuation contributions of 9.5 per cent of the ordinary earnings of
an employee (Lignier, Evans & Tran-Nam, 2014).

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Question 7
The items which are exempted under the GST what do not attract GST are raw silk and
silk waste, printed books and newspapers, agricultural implements, hand tools like spades and
shovels (Kaur, 2016).
Question 8
A business can report GST to the Australian tax office either monthly, quarterly or
annually. If it chooses to report its GST annually then it can go for the simpler BAS reporting
method. The business would need to report on the total sales, GST sales GST on purchases,
export sales, capital purchases and non capital purchases.
Question 9
If supplier does not provide an ABN and the total payment for the services and goods
exceeds $75 excluding the amount of GST, then the top rate of tax is usually withheld from the
payment and is paid to the government.
Question 10
Non profit organization would need to register for GST after it has a turnover of more
$150,000 per year.
Question 11
The key information that should be included in a tax invoice for sales of more than
$1,000 are the document of tax invoice, the seller's identity, ABN number, date of issue of
invoice, description of items sold, amount of GST.

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Question 12
The three basic types of financial statements are balance sheets, income statements and
cash flow statements (Brigham & Houston, 2012). The purpose of a balance sheet is to provide
detailed information regarding the assets, shareholder’s equity and the liabilities of a company.
The purpose of an income statement is to determine the revenue of a company which it earns
over a specific period of time. The cash flow statements are used for reporting the inflow and
outflow of cash of a company.
Question 13
The entities which are required to have financial reports audited are public companies,
private businesses, large retirement funds and non-profit organizations.
Question 14
The primary purpose of a financial or it is providing and objective independent
examination of the financial reports which increases the credibility and value of the financial
statements produced by a company. Hence financial audit increases the confidence of a user in
the financial statements and also reduces the investor risk. The objective of an auditor's report is
documenting reasonable assurance which a company's financial statements are free from.
Question 15
It is important for companies to develop budget for determining the economic objectives,
boundaries and limitations on expenditures of a business. It helps in holding company
accountable for each expense, reducing the costs and preparing for a worst case scenario.

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Question 16
The simple steps of a budgeting process include calculating the overall expenses,
determining the income, setting the goals of savings and debt pay-off and recording the spending
and tracking progress.
Question 17
The common ways of improving cash inflow are, instead of buying one should lease, an
organization should always offer discounts on loans, a buying Co-Operative should be formed,
credit checks on customer should be conducted, invoices should be sent out immediately,
inventory should be improved up on, electronic payment should be used and the suppliers should
be paid less.
Question 18
Electronic spreadsheets are very useful in the development of budgets. They are used in
the preparation and tracking of budgets, calculating expenses conducting numerical analysis and
estimating the cost of job. It helps in keeping the track of expenses and income. It has the useful
feature of displaying results graphically. The related data can be linked easily in budgets.
Question 19
The three key principles related to the management of a chart of accounts are, the
information should be simply presented by the financial statements; one should be cautious
regarding adding extra accounts to the chart of accounts; the chart of account should be
streamlined in order to get the key information needed.

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Question 20
The purpose of a profit and loss statement is to summarize the costs, revenues and
expenses that are included within a specific time period in a business organization. Its two
features are it is prepared on the last day of a financial year for determining the result of the
business and it is considered as the second stage of the final accounts.
Assessment 2
2017 Projected Expenses
Marketing Program Q1 2016 Q2 2016 Q3 2017 Q4 2017 2017 Total
Website redesigning $1,250 $1,250 $1,250 $1,250 $5,000
Incentive scheme for referrals $600 $600 $600 $600 $2,400
TV advertising campaign
Radio advertising campaign $2,500 $2,500 $2,500 $2,500 $10,000
VCE Careers Expo $825 $825 $825 $825 $3,300
Promotional brochure $375 $375 $375 $375 $1,500
Community organisation sponsor $500 $500 $500 $500 $2,000
Contingency amount $200 $200 $200 $200 $800
Total $6,250 $6,250 $6,250 $6,250 $25,000
2017 Actual Expenses
Marketing Program Q1 2016 Q2 2016 Q3 2017 Q4 2017 2017 Total
Website redesigning $1,250 $1,250 $1,250 $1,250 $5,000
Incentive scheme for referrals $600 $600 $600 $600 $2,400
TV advertising campaign $313 $313 $312 $313 $1,250
Radio advertising campaign $2,500 $2,500 $2,500 $2,500 $10,000
VCE Careers Expo $825 $825 $825 $825 $3,300
Promotional brochure $375 $375 $375 $375 $1,500
Community organisation sponsor $500 $500 $500 $500 $2,000
Contingency amount $200 $200 $200 $200 $800
Total $6,563 $6,563 $6,562 $6,563 $26,250
Notes: There are several benefits of TV advertisement for a company such as, it reaches a
huge audience within a very short period of time, it reaches the audience at the time when they
are the most attentive, it conveys the message with sound, visuals, motions and focus clearly on
the product, service and the business. Hence, the budget shown in the marketing budget should
be increased by an amount of $1250 in order to pay for the TV advertisement campaigns.

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Assessment 3
The projected expenses in the marketing budget for the year 2016 consists of items like
website redesigning, Incentive scheme for referral, Radio advertising campaign, VCE Careers
Expo, Promotional brochure, Community organization sponsor, and other contingency amount.
The total amount of budget which was allocated or projected was $25,000. However, TV
advertisement campaign is proposed to the organization and is included in the updated marketing
budget or the table showing actual expenses. Here the TV ad campaign expenses are included.
The proposal is for $10,000, however only a standard deviance of 5% is allowed. Hence, only
$1250 would be added to the proposed budget.
In the marketing expenditure, the website redesigning has been taken off due to problems with
the content and design and the need of increasing the SEO optimization. The incentive payments
have been paid more than expected and the student referrals have been poor, hence it was
removed. The allocation of the contingency amount was included however it was not adequate
for meeting the overrun.
Assessment 4
The actual sales of Melbourne were $475,000 which was $25,000 higher than the budget
amount. The total expenses of Melbourne amounted to be $365,800, which was $1400 greater
than the budgeted expenses. The actual net profit amount for Melbourne amounted to be
$109,200 which were $23,600 more than the budgeted net profit. This signifies that the actual
performance of the campus was good since it earned greater amount than its budgeted net profit.
For Melbourne, there was a 100 per cent variance in the expenses of electricity and gas,
the variance in the expenses of office supplies was 71.4 per cent, the stationery expenses

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variance was 62.5 per cent, and finally the variance in the expenses for water consumption was
30 per cent.
The actual sales of Sydney were $410,000 which was $60,000 or 17.14% higher than the
budget amount. The total expenses of Sydney amounted to be $334,720, which were $11,200
greater than the budgeted expenses. The actual net profit amount for Sydney amounted to be
$75,280 which were $48,800 or 184.29% more than the budgeted net profit. This signifies that
the actual performance of the campus was extraordinary since it earned a very high amount than
its budgeted net profit.
For Sydney, the variance in the total sales came out to be 17.14 per cent, the variance in
the expenses of electricity and gas, office supplies and stationery was one 33.33%, 100% and
78.57% respectively. Finally, the variance in the net profit was 184.29%.
Assessment 5
The age of data summary of the company shows that the total amount of receivables
equal to $3,320. Ryan has taken a credit from the company of 450, which has not been recovered
from him from the last 30 days. Michelle is 920 to the company which she took 90 days back.
The final receivable of the company is from Betty who took 750 from the company 60 days ago.
This shows with the company has a higher amount of receivables however, its collection process
is poor. Giving out too much credit is not a good thing for a company. Hence the company
should work on it's collection process. The best methods by which the company can improve
upon its debtors are, proper distribution of monthly aging report to the sales manager, reviewing
the terms of credits properly, reducing the payment term days to 10 days to 14 days depending
on the customers, offering incentives for oily payment. If payment terms are offered for more

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than 30 days then, courtesy reminder should be sent. Credit card and online payment method
should be set up and selling on credit to the customers who usually feel it should be
discontinued.
A debtor management procedure should be developed and implemented in relation to customer
invoices. The steps here would be, setting up Credit Policy and terms of trade, setting up
estimates and invoicing, establishing accounts receivable processes, conducting Credit Checks
for identifying and mitigating risks, reviewing system and ledger monitoring, managing systems
and data, developing Credit Management services and finally provisioning bad debts.

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References
Brigham, E.F. & Houston, J.F. (2012). Fundamentals of financial management. Cengage
Learning.
Cotter, D. (2012). Advanced financial reporting: A complete guide to IFRS. Financial
Times/Prentice Hall.
James, S., Sawyer, A. & Wallschutzky, I. (2015). Tax simplification: A review of initiatives in
Australia, New Zealand and the United Kingdom. eJournal of Tax Research, 13(1).
Kaur, J. (2016). Goods and service tax (GST) and its impact. International Journal of Applied
Research, 2(8), pp.385-387.
Kieso, D.E., Weygandt, J.J. & Warfield, T.D. (2010). Intermediate accounting: IFRS edition
(Vol. 2). John Wiley & Sons.
Lignier, P., Evans, C. & Tran-Nam, B. (2014). Tangled up in tape: The continuing tax
compliance plight of the small and medium enterprise business sector. Austl. Tax F., 29,
p.217.
Needles, B.E., Powers, M. & Crosson, S.V. (2013). Principles of accounting. Cengage Learning.
Sangster, A. (2015). The genesis of double entry bookkeeping. The Accounting Review, 91(1),
pp.299-315.