Accounting Assessment - Microsoft Excel Financial Reports

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Question: Accounting Assessment

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The YouTube video is present at

https://www.youtube.com/watch?v=OMu7LTGHMVc

“IF” is a MS Excel function which is used to run a special set of command or display a value when the condition specified is true or other set of commands or display other value when the condition specified is false(ExcelsFun, 2008).

Answer 2-5

Excel is the most used spreadsheet software. Other spreadsheet software are listed as under:

1. Google Docs (Google Inc.)
2. VisiCalc
3. WPS Software (WPS Inc.)
4. Libre Office
5. Numbers (Apple Inc.)

Answer 2-6

Perpetual inventory system is kind of inventory system under which the inventory and cost of offers record are redesigned every single time a sale or buy exchange happens. It might be noticed that there is no purchase record kept up in the perpetual inventory system. The two records kept up are inventory account which is a current assets account and the expense of sales record which is a cost account. The perpetual inventory system is valuable when it is conceivable when track the development of the products with the assistance of innovation.

The periodical inventory system is a kind of inventory system which is being used for quite a while. Under this inventory system a buy record is kept up which is cost account. All the buy of the inventory is charged to the buy account. No different bookkeeping section is started at the season of the deals. However toward the end of the reporting time frame the inventory which is stay unsold is dealt with as assets and a bookkeeping section to the credit of procurement and charge of the inventory record is made toward the end of the reporting time frame. The periodical inventory system is more appropriate for the inventory of products which can't be followed every time a deals is made.

Spreadsheet are an important tool for accounting and accountants. Spreadsheet has the advantage of auto calculating the reports even when the data is change(Dyson, 2010). This reduce the time of preparing the reports and thus the spreadsheets are important for the accountants for the purpose of accounting. Spreadsheets has in-built formulas which can be useful for the purpose of accounting. For example MS Excel has in-built functions for calculation of the depreciation. The disadvantage is that the data the report format is created by the accountant and if there is any errors then it is not easy to find the error.

Spreadsheet are an important tool for accounting and accountants. Spreadsheet has the advantage of auto calculating the reports even when the data is change(Dyson, 2010). This reduce the time of preparing the reports and thus the spreadsheets are important for the accountants for the purpose of accounting. Spreadsheets has in-built formulas which can be useful for the purpose of accounting. For example MS Excel has in-built functions for calculation of the depreciation. The disadvantage is that the data the report format is created by the accountant and if there is any errors then it is not easy to find the error.

Answer 2-9

1. There should be consistency in the accounting policies used in the valuation of inventory. For example is company is using fair value method than it should go with fair value method.
2. LIFO method is not allowed under the accounting standards.
3. Inventory should be valued lower of cost or net realizable value.

Answer 2-10

Average Cost

Under the average cost method the cost is averaged and the average inventory cost is used to calculating the cost of sales.

FIFO

Under the FIFO method the inventory purchased first is supposed to be sold at first. This method is allowed in Australia.

LIFO

Under the LIFO inventory system the goods purchased last are supposed to be sold at first. This inventory method is not allowed in Australia.

Answer 2-12

Phishing

Phishing is the endeavor to secure delicate data, for example, usernames, passwords, and MasterCard subtle elements (and some of the time, by implication, cash), frequently for malignant reasons, by taking on the appearance of a reliable element in an electronic correspondence(Eisen, 2007).

Trojan horse

Trojan horse, or Trojan, is any pernicious PC program which is utilized to hack into a PC by deceiving clients of its actual plan.

Firewalls

Firewalls are much of the time used to keep unapproved Internet clients from getting to private systems associated with the Internet, particularly intranets. All messages entering or leaving the intranet go through the firewall, which looks at every message and hinders those that don't meet the predefined security criteria.

Encryption

Encryption is the best approach to accomplish information security. To peruse an encoded record, you should have admittance to a mystery key or watchword that empowers you to unscramble it. Decoded information is called plain content; scrambled information is alluded to as figure content.

Answer 2-13A

XYZ Ltd. is an organization which offers the wellbeing items. The organization readies the bank compromise at end of the every month. The bookkeeping passages for the bank charges and the bank premium got are entered in the books of records before setting up the bank compromise.

Bank Reconciliation Report
		Date of Bank Statement:	31/04/ 2016
		Reconciliation
		Balance on 31/04/2016:		$ 20,240
		Add: Outstanding Cheques:		$ 860
		Subtotal:		$ 11,000
		Deduct: Outstanding Deposits:		$ 600
		Balance on Bank Statement:		$ 20,500

Answer 2-13B

The term cash and cash equivalents includes: currency, coins, checks received but not yet deposited, checking accounts, petty cash, savings accounts, money market accounts, and short-term, highly liquid investments with a maturity of three months or less at the time of purchase such as U.S. treasury bills and commercial paper. The items included as cash and cash equivalents must also be unrestricted.

Answer 2-14

Sales on credit

Debtors	160,000
Sales		160,000

Collection of part amount

Bank / Cash	40,000
Debtors		40,000

Write off accounts receivable

Bad Debts	10,000
Debtors		10,000

Reinstatement of write off

Debtors	10,000
Profit & Loss Account		10,000

Collection in full of the amount owing

Bank	120,000
Debtors		120,000

Answer 2-15

The aging method takes place by sorting a company's accounts receivable according to the dates of these unpaid invoices. The invoice amounts that are not yet due are entered into the first of perhaps five columns(Langfield, et al., 2015). The invoice amounts that are 1-30 days past due are entered into the second column. Amounts that are 31-60 days past due are entered into the third column, and so on. The aging will be reviewed in order to determine the approximate amount of the receivables that may not be collected.

Answer 2-16

Credit cards payments are liability for the user and he needs to pay the amount spent and the interest on this amount. On the other hand debit card is a a transaction from the funds of users capital and no interest us payable.

Answer 2-17

Date	Particulars	Dr	Cr
Dec 31,2014	Bad Debts Expense	$132,000
	Allowance for Doubtful Debts		$132,000
Dec 31,2014	Profit & Loss A/c	$132,000
	Bad Debts Expense		$132,000
Jan 10,2015	Accounts Receivable	$9,000
	Sales		$9,000
June 20,2015	Allowance for Doubtful Debts	$9,000
	Accounts Receivable		$9,000
July 25,2015	Bad Debts Expense	$23,000
	Allowance for Doubtful Debts		$23,000
July 25,2015	Allowance for Doubtful Debts	$23,000
	Accounts Receivable		$23,000
Aug 15,2015	Cash	$9,000
	Accounts Receivable		$9,000
Aug 15,2015	Accounts Receivable	$9,000
	Allowance for Doubtful Debts		$9,000
Dec 31,2015	Bad Debts Expense	$100,000
	Allowance for Doubtful Debts		$100,000
Dec 31,2015	Profit & Loss A/c	$100,000
	Bad Debts Expense		$100,000

Allowance for doubtful debts
Date	Particulars	Dr	Date	Particulars	Cr
			Dec 31, 2014	Opening Balance	$0
Dec 31, 2014	Closing Balance	$132,000	Dec 31,2014	Bad Debts Expense	$132,000
	Total	$132,000		Total	$132,000
			Jan 1, 2014	Opening Balance	$132,000
			July 25,2015	Bad Debts Expense	$23,000
June 20,2015	Accounts Receivable	$9,000	Aug 15,2015	Accounts Receivable	$9,000
July 25,2015	Accounts Receivable	$23,000	Dec 31,2015	Allowance for Doubtful Debts	$100,000
Dec 31,2015	Closing Balance	$232,000
	Total	$264,000	Total		$264,000

Bad Debt Expense
Date	Particulars	Dr	Date	Particulars	Cr
Dec 31,2014	Allowance for Doubtful Debts	$132,000	Dec 31,2014	Profit & Loss A/c	$132,000
	Total	$7,500	Total		$132,000
July 25,2015	Allowance for Doubtful Debts	$23,000	Dec 31,2015	Profit & Loss A/c	$100,000
Dec 31,2015	Allowance for Doubtful Debts	$100,000
	Total	$123,000	Total		$100,000

Answer 2-18

When credit sales is entered the accounts receivable account is debited and the credit sales account is credited.

Accounts Receivable	400,000
Sales		400,000

Later on this accounts receivable is converted to notes receivable. The interest rate implied is 6%.

Notes Receivable	400,000
Accounts Receivable		400,000

When the accounts receivable is dishonored below entry is done in books of accounts.

Accounts Receivable		400,000
Interest			50,000
Notes Receivable			350,000

Answer 2-19

• Copyright is an intangible assets(Eisen, 2007).
• Allowance for bad debts is a contra assets account to accounts receivables.
• Accumulated depreciation is a contra assets account to property, plant and machinery account.
• Drawings is a contra equity account.
• Copyright generates future income hence it is an intangible assets. Allowance for bad debts is shown as deduction from accounts receivables. Accumulated depreciation is shown as deduction from fixed assets. Drawings is show as deduction from equity.

Answer 2-20

1. Qantas has 2196 million shareholders(Qantas, 2016).
2. Total revenues are $ 15,816 million for the year 2014.

Account	Explanation	Amount
Intangible assets		803 million.
Revenue received in advance	Current assets	3,584 million.
Retained Earnings	Current liability	1,115 million.

4. Current assets = 5,049 million

Current liabilities = 7,470 million.

Working capital = current assets/current liabilities.

Working capital ratio = 5,049 / 7,470 = 6.76

5. The chart is as under:

	Year 2014	Year 2015
Sales	$15,352	$15,816

1. Performance of Qantas is good in past few years. Its financial position is also good and it is advised to invest in this company.

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