Understanding the Records and Reports for Sparks: An Explanation for the Owner

The accountant of Sparks has fallen ill and cannot be contacted. Before leaving, the accountant had completed both a trial balance at 31 August 2020 and the records for the last month of the business year ending 30 September 2020 and left these for the owner, together with annual reports for the year. These records and reports are shown below (after recommended reading list.)

The owner does not understand the material left by the accountant and has approached you for advice.

ASSIGNMENT QUESTION

1) The owner would like to know what events occurred in the month of September 2020 and has asked you to produce a short explanation of each event that occurred.

2) The owner does not understand the system used to keep the records. With reference to the  records provided, explain how the record keeping system works. Your explanation should include a consideration of:

· The Day books and Journals

· The General Ledger

· The double entry system for recording transactions

· Trial balance and annual reports.

3) The accountant left a note stating the annual reports had been prepared following the accruals concept. Explain this concept to the owner. Support your explanation with 5 examples of the  accruals concept being used from within the material supplied by the accountant for Sparks.

Specific Guidance For part 1):

Provide a brief, clear, explanation of the events that occurred in September 2020 to the owner of the business. Do not merely list the events.

The owner wants to have an understanding of the key issues of what is going on in their business. Hence, use simple language to explain terminology within the records.

Analysis of the performance of the business is not required. Thus comments on whether the  performance of the business is good or bad is not required.  Ignore Sales Taxes.

The word limit for this section is 500 words.

For part 2):

You must use the information in the scenario to support points you make. The word limit for this section is 1,250 words.

For part 3):

Do not merely list examples of the accruals concept but rather explain how each example is an application of the accruals concept.

The word limit for this section is 750 words.

ASSESSMENT CRITERIA

Marks are allocated on the following criteria:

Understanding- 50 %

Application- 30 %

Analysis-20 %

You will notice that without any understanding or application you may struggle to pass the module and note that the majority of the weighting in the marks is on understanding.

Marks will be awarded for professionalism: appropriate use of referencing, extent and evidence of research, structure of content, coverage of issues, presentation and use of appropriate language