FNSACC301 Process Financial Transactions And Extract Interim Reports

Answer 1

1.a. The name of the document is sales invoice bill, which has been prepared on receipt of purchase order from Bates and Sons

1.b. The GST is $3000 on a total amount of $30000, i.e. the transaction amount. Therefore, the sales invoice includes a GST of 10% (3000/30000*100)

1.c. The information on the document can be verified by checking the price of the goods on the package along with the unit price and cost. The GST rate can be verified by tracking the same over the internet as per the standard charges on such goods.

Table1: The Journal Entry

(Source: Author’s Creation)

Answer 2

Verification of order request or any documents can be made from the invoice itself. The matching concept indicates that the account which has been debited also has a counter credit account (Venkatasubramanian, Vogler, Farrenkopf, Kagermann, Roggenkemper, Babu & Schlank, 2006). In the following case, the most essential way to verify the document is matching the same with the system where the purchase order request has been entered.

Yes, this document assists in establishing the personnel in charge of payment approval as the name of the personnel is mentioned.

Answer 3

To ensure the receipts and withdrawals are entered correctly as per the organizational procedure, one must check the past transactions according to which the entry has been made (Bragg, 2002). Thereafter, the new transactions must be entered n the similar manner. In addition to this, it is also significant to follow organizational policies accurately to ensure that the invoice that has been made is correct in terms of entry of transactions, date of transaction, date of delivery, name of the purchaser, rate, quantity and amount to be collected.

Answer 4

The essentials of a valid cheque include:

1. The name of the bank, IFSC code and branch (Behera, Banerjee & Panigrahi, 2017). 
2. Cheque number and MICR code
3. Name of the Payee
4. Signed by drawer and dated
5. Amount mentioned in words and in figures

The above-mentioned points must be present on a cheque for its validity.

Answer 5

Table 2: Statement Reconciliation

(Source: Author’s Creation)

Answer 6

1.  Petty cash is an essential ledger which needs to be maintained by almost all the organizations so as to ensure authenticity of the cash transactions made on small items or petty items. The control method to ensure the Petty cash is checked processed and recorded to the organisational proceduresone must count petty cash and reconcile to the general ledger. Documents should be pre-numbered and all documents should be accounted. Check the cash register, where the sum of the petty cash receipts and money in the fund must equal the established total.
2. Steps to balance petty cash are as follows:
3. Recognize the ending balance of the account as per the last reconciliation
4. At the end of the period, sum total the funds that is left in the petty cash account

• Collect all the receipts for expenses paid out of the account for the period in question.

1. Add the total amount of the receipts
2. Record the amount as total expenses.
3. Add the amount of the receipts to the ending balance.

• Ensure that results match the opening balance in the account.
• Recognize the amount of variance, if any.

1. Report any variances in the petty cash balance 

Answer 7

Excel Worksheet

Answer 8

1. Reasons for errors and discrepancies with invoice
2. Vague description of the product or service

This can be avoided by using separate lines for breaking down each item included on the invoice (Sabri, Gupta & Beitler, 2006). 

1. Forgetting payment details on the invoice

This can be easily avoided by including an option for online payment by providing banking details (Sabri, Gupta & Beitler, 2006). 

• Errors in the customer information

To reduce this margin of sensitive error one must implement a double check process on the system

1. Due date not stated correctly

Using system software for automated reminders as well as follow ups.

Incorrect Invoice number (Sabri, Gupta & Beitler, 2006). 

This error could be avoided by using system generated invoice number which follows up immediately after the last invoice number.

Answer 9

The 5 reasons for filing invoices and related documents to be important for audit purpose are as follows:

1. The invoices and other related documents include the basic facts with regard to the transaction, which includes the date when the transactions occurred, to whom the transaction was made, the quantity sold and bought and the amount charged for it.
2. These documents serve as evidences for the financial transactions that have occurred.
3. These evidences can become records for verification of accurateness of the transactions for audit purpose (Lanza, 2009). 
4. Well-kept records generally shortens the length of time required for completing the audit process.
5. The records maintained gives better information regarding the financial position.

Answer 10

Debtor’s ledger

G Tomlinson

General ledger

Debtors

Cash at bank

Answer 11

Ledger accounts:

Office supplies

Trade creditors

Sales

Debtors

Answer 12

Table 3: Journal Entries

(Source: Author’s Creation)

Answer 13

(Source: Author’s Creation)

(Source: Author’s Creation)

Answer 14 A& B

Table 4: Company’s Ledger A/c

Answer 15

A continuous improvement or updating strategy implemented in an organization is the process and policies that enables the management to stay focused on improving the activities done on regular basis. Systems could be regularly maintained by means of updating the software at periodic intervals. The importance of ensuring that the related systems in a workplace are continuously updated is that it helps the management to prevent breakdown or system hang, which might cause system failure, loss of productivity, hamper the proficiency of the workforce, loss of capital and may other business losses. In addition to this, Fagerholm, Guinea, Mäenpää and Münch (2017) in their work have contended that the significance of continuous updating helps the organization to increased productivity, effective software systems helps in keeping the workforce up to date with the modifications and additions made thereof.

Answer 16

Lodging Cash with Financial Institutions

1. An organization can lodge deposit of cash with financial institutions by either transferring the money in electronic form (Tyson, 2015).
2. Agent of the organization can lodge cash by visiting the institution and filling the cash deposit sheet and submit the same for the necessary action.
3. Another way to lodge cash with the financial institution is by mobile transfer. Due to advancement in technology, there are a number of people who have opted for such facilities and now transfer funds through mobile banking apps for the purpose of lodging cash without any delay, compared to the manual system of cash deposit.

Lodging Non-Cash Items with Financial Institutions

1. For non-cash items, the company can either fill up a cheque or a demand draft deposit slip and submit the same at the nearby branch.
2. The non-cash items can be deposited by online transaction system which is available at the website of the Financial institutions (Tyson, 2015).
3. Another way to lodge non-cash item is through agents appointed by the company.

Answer 17

Table 5: The Entry for Bad Debt Written Off

(Source: Author’s Creation)

Answer 18

In the era of globalization, there are a number of organizations that have been established all over the world. Due to rise in competition in the world market the employers have adopted diverse techniques and process to retain their employees. However, there are a number of safety precautions that have been dealt with in the legislation and many organizations too have adopted programs and strategies for ensuring protection of health, safety and welfare of their employees. The safety precautions that can be taken by the employees according to the legislative requirements and the organisational policies and procedures are as follows:

1. Following all banking laws- many of the financial institutions are required to take very explicit security steps, for the purpose of ensuring that the financial information’s are protected appropriately
2. Scrutinization of employment practices- It is the responsibility of the employers to hire professionals who are able to perform their duties accurately and with little risk of mistakes or errors because failure to enter any transaction precisely might lead to financial loss to the institution.
3. Instituting a strong security system- It is the duty of the employers and the employees of the financial institutions to take safeguard against loss of financial data. It may include instituting diverse safes as well as implementation of digital security systems.
4. Keeping the security personnel at all times- The financial institutions have been regarded as the financial hub for the cash and non-cash items deposited by individuals as well as corporations. Therefore, it is necessary for the employers to maintain safety and security at all times. This may include hiring security guards, cyber security experts, as well as other relevant systems so as to ensure safety.

Employers and employees have rights and responsibilities under Work, Health and Safety Legislation. The Security Regulations in the financial services industry is of immense importance as per legislative requirements. According to the point of view of the scholar (Rejda, 2011), despite of advanced security systems and strategies, there has always remained a chance of insurance risks. It is the responsibility of both the employers and the employees to have a complete knowledge with regard to such safety precautions. Therefore, there are a number of business insurance which can be protect the employers and the employees of financial institutions, namely, commercial property insurance, cyber liability insurance, umbrella insurance and many others.

Answer 19

When money is deposited at a bank, the bank-teller checks the cash, cheques as well as the credit card details for the purpose of ensuring that it balances. The bank-teller then stamps the copy of the deposit as well as tear-off the leaflet attached to the deposit slip, which serves as an evidence with regard to the deposit that has been made. The stamped deposit slip will serve as the proof of lodgement. According to the point of view of the scholar German, (2006), the proof of lodgement must be presented at the accounts section where it is be checked as well as filed. The scholar in his work have emphasized that proof of lodgement is an important document as it serves as a proof and evidence thereby making it an appropriate record on the part of the bank as well as on the part of the depositors.

Answer 20

Answer 21

Based upon the instructions that has been provided, a complete cash and credit journal has ben prepared in the excel sheet, that would be used for preparing the general ledger. Every detail associated with the provided information has bene used to analyse an appropriate ledger balance.

Answer 22

Cash

Stationery

Motor Vehicle Expenses

Rent

Sales

Interest Received

Trial Balance

Assessment 2

Front Side of Deposit

Rear of Deposit

References

Behera, B. K., Banerjee, A., & Panigrahi, P. K. (2017). Experimental realization of quantum cheque using a five-qubit quantum computer. Quantum Information Processing, 16(12), 312.

Bragg, S. M. (2002). Just-in-time accounting: How to decrease costs and increase efficiency. New Jersey, United States: John Wiley & Sons.

Fagerholm, F., Guinea, A. S., Mäenpää, H., & Münch, J. (2017). The RIGHT model for continuous experimentation. Journal of Systems and Software, 123(6), 292-305.

German, P. (2006). Electronic Litigation Systems-A Comparison of Security Issues Between Web-Based Litigation and Traditional Paper Based Methods. eLaw J., 13(7), 254.

Lanza, R. B. (2009). Cost recovery: turning your accounts payable department into a profit center. New Jersey, United States: John Wiley & Sons.

Rejda, G. E. (2011). Principles of risk management and insurance. New Delhi, India: Pearson Education India.

Sabri, E. H., Gupta, A. P., & Beitler, M. A. (2006). Purchase Order management best practices: process, technology, and change management. Pearson, London: J. Ross Publishing.

Tyson, E. (2015). Personal finance for dummies. New Jersey, United States: John Wiley & Sons.

Venkatasubramanian, R., Vogler, H., Farrenkopf, E., Kagermann, H., Roggenkemper, H., Babu, S., & Schlank, H. (2006). U.S. Patent Application No. 10/980,114(9), 41-57.