Task 1 BSBFIN501 Student Assessment Tasks 12-03-21

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Melbourne Education Institute RTO Number: 45054 CRICOS Number: 03673A Level 1, 310 King Street, Melbourne, VIC, 3000 Ph:1800 986 100 Email: admin@mei.edu.au Introduction 4 Assessment Task 1: Knowledge questions 5 Assessment Task 1: Checklist 8 Assessment Task 2: Project Portfolio 9 Assessment Task 2: Checklist 13 Final results record 15 BSBFIN501 Manage Budgets And Financial Plans @2020 RTO Works Student assessment tasks V. 1.0 Page | 1 STUDENT ASSESSMENT TASKS MANAGE BUDGETS AND FINANCIAL PLANS BSBFIN501

BSBWRT301 Write simple documents Trainer Guide Introduction The assessment tasks for BSBFIN501 Manage budgets and financial plans are outlined in the assessment plan below. These tasks have been designed to help you demonstrate the skills and knowledge that you have learnt during your course. Please ensure that you read the instructions provided with these tasks carefully. You should also follow the advice provided in the Business Works Student User Guide . The Student User Guide provides important information for you relating to completing assessment successfully. Assessment for this unit BSBFIN501 Manage budgets and financial plans describes the performance outcomes, skills and knowledge required to undertake financial management in an organisation or work area. It includes planning and implementing financial management approaches and supporting and evaluating effectiveness of financial management processes. For you to be assessed as competent, you must successfully complete two assessment tasks:  Assessment Task 1: Knowledge questions – You must answer all questions correctly.  Assessment Task 2: Project – You must work through a range of activities and complete a project portfolio.

BSBWRT301 Write simple documents Trainer Guide Assessment Task 1: Knowledge questions Information for students Knowledge questions are designed to help you demonstrate the knowledge which you have acquired during the learning phase of this unit. Ensure that you:  review the advice to students regarding answering knowledge questions in the Business Works Student User Guide  comply with the due date for assessment which your assessor will provide  adhere with your RTO’s submission guidelines  answer all questions completely and correctly  submit work which is original and, where necessary, properly referenced  submit a completed cover sheet with your work  avoid sharing your answers with other students. Assessment information Information about how you should complete this assessment can be found in Appendix A of the Business Works Student User Guide . Refer to the appendix for information on:  where this task should be completed  the maximum time allowed for completing this assessment task  whether or not this task is open-book. Note : You must complete and submit an assessment cover sheet with your work. A template is provided in Appendix C of the Student User Guide. However, if your RTO has provided you with an assessment cover sheet, please ensure that you use that. i

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BSBWRT301 Write simple documents Trainer Guide Questions Provide answers to all of the questions below: 1. Explain the basic principle of double entry bookkeeping. The basic principle of double entry bookkeeping is that there are always two entries for every transaction. One entry is known as a credit entry and the other debit entry. The entries are often displayed in ‘T’ accounts. 2. Complete the following table to describe the principles of cash and accrual accounting and an advantage and disadvantage of each method of accounting. Type of accounting method Description One advantage and one disadvantage of this method Cash accounting The cash accounting method can significantly reduce bookkeeping costs since it is simpler and less time- consuming than accrual methods. • ADVANTAGES TO THE CASH ACCOUNTING METHOD For tax purposes, there are definite advantages to the cash accounting basis for accounting. Cash accounting ensures that taxes are not paid on monies that have not yet been received; this improves cash flow and ensures that funds are available for tax expenditures. • DISADVANTAGES TO CASH ACCOUNTING Because cash accounting is so simple, it does not allow for tracking the actual dates of sales and purchases. Additionally, it usually does not provide a means of matching these transactions to specific items of inventory. Accrual accounting In accrual basis accounting, income is reported in the fiscal period it is earned, regardless of when it is received. ADVANTAGES a) It grants more useful business analysis. The matching of expenses and revenue using this method allows you to conduct more useful business analysis. b) It allows for easy planning.

BSBWRT301 Write simple documents Trainer Guide Type of accounting method Description One advantage and one disadvantage of this method One process that will become easier with accrual basis accounting is planning. DISADVANTAGES a) It poses some difficulties. Difficulty is one huge drawback of accrual basis accounting, where rules in the recognition of revenue and expenses can be very complicated. b) It can lead to deception. It is important to note that the confusion coming with this accounting practice can lead people to deception of financial statements. 3. Explain the two accounting principles on which the calculation and reporting of deprecation is based. A. Cost principle - This principle requires that the Depreciation Expense reported on the income statement, and the asset amount that is reported on the balance sheet, should be based on the historical (original) cost of the asset. (The amounts should not be based on the cost to replace the asset, or on the current market value of the asset, etc. B. Matching principle - this principle requires that the asset's cost be allocated to Depreciation Expense over the life of the asset. In effect the cost of the asset is divided up with some of the cost being reported on each of the income statements issued during the life of the asset. By assigning a portion of the asset's cost to various income statements, the accountant is matching a portion of the asset's cost with each period in which the asset is used. Hopefully this also means that the asset's cost is being matched with the revenues earned by using the asset. 4. List three types of budgets. There are three main types of budgets 1. cash budgets - Cash budgets are capital and operating budgets combined in the account of timing payments and receipts from cash revenue. 2. capital budgets - Capital budgets are government budgets that request fixed assets, which creates demands on a business's cash flows.

BSBWRT301 Write simple documents Trainer Guide 3. operating budgets - Operating budgets are daily associated expenses operations subdivided into categories such as revenue, benefits, salaries, and non-salaries expense. 5. List three key features of A New Tax System (GST) Act 1999. - Service tax rate under GST: Under the GST, there is a differential tax structure. A low tax rate of 5% is imposed on essential services. Common services are charged at 12% and some commercial services at 18%. A tax rate of 28% on luxury services is also made. Several services like education provided by an educational institution, Post Offices, RBI etc. are exempted from service taxation. The standard GST rate on services seems to be 18%. Services are taxed at a common rate of 15% previously. - Tax revenue appropriation between the centre and states: The centre and states will share GST tax revenues at 50:50 ratio (except the IGST). This means that if a service is taxed at 18%, 9% will go to the centre and 9% will go to the concerned state. - The four-tier rate structure: The GST proposes a four-tier rate structure. The tax slabs are fixed at 5%, 12%, 18% and 28% besides the 0% tax on essentials. Gold is taxed at 3%. The centre has strictly demanded and got an additional cess on demerit luxury goods that comes under the high 28% tax. Essential commodities like food items are exempted from taxes under GST. Other consumer goods which are common items will be taxed at 5%. 6. Outline the four main taxation and superannuation obligations for a business. - Australian business number (ABN): Consider getting an ABN for your business. An ABN helps to manage your tax and business obligations and is used as a reference by the Australian Taxation Office (ATO) for your business. You will also use your ABN when dealing with other businesses and government departments. - Goods and services tax (GST): GST is a broad-based tax of 10% imposed on most goods, services and other items sold in Australia. Depending on your turnover or service, you may need to register for GST. - Pay as you go (PAYG): PAYG is a system that allows you to pay an expected tax liability in instalments. The ATO will notify you of your PAYG obligations. - Tax obligations for paying staff: As an employer, you must be aware of your tax obligations when paying staff, including pay as you go, withholding tax and superannuation. Depending on the size of your business, you may also need to pay payroll tax. 7. List three types of records that a company must keep for tax purposes.

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BSBWRT301 Write simple documents Trainer Guide Financial Records The financial records of your business will show your cash flow, the financial position of your business and detail how you prepare your tax return. These documents include:  receipts and invoices for the good and/or services you sell  contracts with suppliers  bank statements  your business assets register  depreciation schedules  tax documents which include your Business Activity Statements (BAS) and annual tax returns  business loans and/or shares 2. Legal Records Legal records document how you operate your business and include:  registration documents  leases  contracts with suppliers and clients  insurance 3. Employee Records You’ll need to show the ATO that you’re able to pay your employees correctly and meet their tax and superannuation obligations. Employee records might be needed to show insurers, the Fair Work Commission or a state Work Health and Safety organisation. 8. Explain why the ATO conducts audits. Purpose of financial audit : A financial audit is an objective examination and evaluation of the financial statements of an organization to make sure that the financial records are a fair and accurate representation of the transactions they claim to represent. 9. List three key principles that should be followed when managing a work team. 1. Clear purpose, goals and expectations for the team All successful team management starts with answering two very basic questions – why the team exists, and which goals need to be meet 2. Build trust among team members The Five Dysfunctions of a Team written by Patrick M. Lencioni is one of the best books on leadership and team management. The five big dysfunctions are: Absence of trust, fear of conflict, lack of commitment, avoidance of accountability and inattention to results.

BSBWRT301 Write simple documents Trainer Guide 3. Hold regular planning and review meetings Meetings can be a huge waste of time. But not if they’re managed properly with a very clear and specific intention. 4. Track how team members spend their time time is the most precious resource of every individual and team, tracking and then properly managing time (time relocation) is essential for keeping team productivity levels high. When leaders introduce time tracking to their teams, they automatically increase productivity, focus and performance. 10. Describe the difference between a static and a flexible budget. The difference between Static and Flexible budgets lies in its nature of adaptability . A static budget once formulated can not be changed irrespective of changes occurring in its assumed activity before the fixed period is over . A flexible budget however is free to be adapted according to changes at any point of the set period . 11. Explain the relevance of electronic spreadsheets to budgeting. The most beneficial feature of spreadsheets is their most valuable tool: mathematical formulae. Formulas can be set up in spreadsheet cells to calculate information based on the contents of other cells. You may use these formulae to quickly compute financial data or other relevant metrics. An electronic spreadsheet may be used to do numerical computations automatically. Spreadsheets are extremely useful in security management for establishing and managing budgets, calculating expenses, predicting task costs, and doing other numerical analysis. 12. How often must businesses report GST. GST reporting and payment cycle will be one of the following: Monthly – if your GST turnover is $20 million or more. Quarterly – if your GST turnover is less than $20 million – and we have not told you that you must report monthly. Annually – if you are voluntarily registered for GST. 13. Describe the following terms associated with financial statements. Cash flow statements Cash flow statements report a company’s inflows and

BSBWRT301 Write simple documents Trainer Guide outflows of cash. This is important because a company needs to have enough cash on hand to pay its expenses and purchase assets. While an income statement can tell you whether a company made a profit, a cash flow statement can tell you whether the company generated cash. Balance sheets A balance sheet provides detailed information about a company’s assets, liabilities and shareholders’ equity. Assets are things that a company owns that have value. This typically means they can either be sold or used by the company to make products or provide services that can be sold. Assets include physical property, such as plants, trucks, equipment and inventory. It also includes things that can’t be touched but nevertheless exist and have value, such as trademarks and patents. And cash itself is an asset. So are investments a company makes. Ledgers A ledger is a book or collection of accounts in which account transactions are recorded. Each account has an opening or carry-forward balance, and would record each transaction as either a debit or credit in separate columns, and the ending or closing balance. Profit and loss statements The profit and loss statement is a financial statement that summarizes the revenues, costs, and expenses incurred during a specified period. 14. Describe a method that can be used to evaluate a budget or financial plan. Spending in Actual vs. Planned (variance analysis) After you've created a monthly budget, you should use a budget spreadsheet, software, or an internet tool to track your expenditures throughout the month. Assess whether you overspent, underspent, or remained on budget for the month with your budget and spending monitoring in front of you. If your expenses surpassed your budget, you might be able to cut back on any spending areas that were regularly higher than you had planned. Similarly, if you spent less than you had budgeted, you may be able to raise your expenditures for the next month in any categories where you spent less than you had anticipated. If you spent what you planned to spend, you're on the right track, but your budget may still require changes depending on your financial picture for the next month.

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BSBWRT301 Write simple documents Trainer Guide Assessment Task 1: Checklist Student’s name: Did the student provide a sufficient and clear answer that addresses the suggested answer for the following? Completed successfully? Comments Yes No Question 1 Question 2 Question 3 Question 4 Question 5 Question 6 Question 7 Question 8 Question 9 Question 10 Question 11 Question 12 Question 13 Question 14 Task outcome:  Satisfactory  Not satisfactory Assessor signature: Assessor name: Date:

BSBWRT301 Write simple documents Trainer Guide Assessment Task 2: Project Portfolio Information for students In this task, you are required to demonstrate your skills and knowledge by working through a number of activities and completing and submitting a project portfolio. You will need access to:  a suitable place to complete activities that replicates a business environment including a meeting space and computer and internet access  workplace policies and procedures relating to financial management (included in the BSBFIN501 Simulation Pack for students completing this assessment for the case study organisation)  workplace budgets and financial plans (included in the BSBFIN501 Simulation Pack for students completing this assessment for the case study organisation)  your learning resources and other information for reference  Project Portfolio template. Ensure that you:  review the advice to students regarding responding to written tasks in the Business Works Student User Guide  comply with the due date for assessment which your assessor will provide  adhere with your RTO’s submission guidelines  answer all questions completely and correctly  submit work which is original and, where necessary, properly referenced  submit a completed cover sheet with your work  avoid sharing your answers with other students. Assessment information Information about how you should complete this assessment can be found in Appendix A of the Business Works Student User Guide . Refer to the appendix for information on:  where this task should be completed  how your assessment should be submitted. Note : You must complete and submit an assessment cover sheet with your work. A template is provided in Appendix B of the Student User Guide. However, if your RTO has provided you with an assessment cover sheet, please ensure that you use that. i

BSBWRT301 Write simple documents Trainer Guide Activities Complete the following activities: 1. Carefully read the following: This assessment requires you to demonstrate your skills and knowledge in managing budgets and financial plans. This project can be based on the case study business in the BSBFIN501 Simulation Pack or you may like to base this on your own business, or a business you are currently working for or are familiar with. Speak to your assessor to get approval if you want to base this on your own business or one you work for. You will be collecting evidence for this unit in a Project Portfolio. The steps you need to take are outlined below. 15. Preparation Make sure you are familiar with the business you are basing this assessment on and have read through the necessary background information and policies and procedures. For the case study business, this is all of the documents included in the BSBFIN501 Simulation Pack. If it’s your own business or a business where you are working or are familiar with, it’s important at this step that you have your business or case study approved by your assessor. Complete Page 4 of your Project Portfolio for this unit. Read through the requirements of Section 1, 2, 3 and 4 of your Project Portfolio which include detailed guidance relevant to all the assessment activities. Remember to create logical folders for all of your work and in the final assessment task you will submit a screenshot of these folders. This will ensure you follow record keeping requirements. 2. Plan financial management approaches. You are required to plan financial management approaches for a business. This involves:  Accessing, reviewing and then reporting on the budget and financial plans relevant to your team or department.  Evaluating budget and financial plan outcomes.  Preparing contingency plans in case plans need to be varied.  Identifying if any changes need to be made to the budget and financial plans and negotiating these changes. If you are completing this for the case study business, you will answer all the questions in your Portfolio based on your Simulation Pack. If it is your own business, you will need to access the budgets and financial plans relevant to your team or department, as well as relevant workplace policies and procedures. Complete Section 1 of your Project Portfolio. Submit your Portfolio to your assessor.

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BSBWRT301 Write simple documents Trainer Guide 16. Preparing to implement financial management plans You are to prepare a presentation to provide to your team. This can be any format you wish as per the instructions in your Portfolio. The purpose of the presentation is to:  communicate the details of the agreed budget and financial plans  provide support to your team in order to implement the budgets and financial plans  provide information to your team about financial management processes to monitor expenditure, controls costs and adjust contingency plans as required. Prepare your presentation following the guidelines in your Portfolio. Make sure your presentation has a logical structure and is in language that your team can understand. Your presentation will last for approximately 15 minutes and you will need to ensure you provide the opportunity for other students to answer questions. Complete Section 2 of your Project Portfolio. Submit your Portfolio to your assessor. Your assessor will then advise you of the date and time of your presentation, as well as the students who will be participating. 17. Implementing financial management plans In a group round-table style discussion with a student group of approximately two or three, you will provide your presentation. Each person will have a turn (15 minutes per person) to present their work. Your assessor will be looking to see that you can:  demonstrate effective communication skills including: o Speaking clearly and concisely o Using non-verbal communication to assist with understanding o Asking questions to identify required information o Responding to questions as required o Using active listening techniques to confirm understanding  Use language that your audience can understand. This can either be viewed in person by your assessor or you may like to video record the session for your assessor to watch later. Your assessor can provide you with more details at this step. Make sure you follow the instructions above and meet the timeframes allocated. 18. Monitoring and evaluating financial management plans If you are using the case study business you are to complete this activity. If you are using your own business, you may analyse information on the budget and i

BSBWRT301 Write simple documents Trainer Guide expenditure. If this is not possible, you may also complete this same activity. Assume it is the end of the reporting period. Review the information in the simulation pack and report on:  Expenditure and income  Actual versus forecasted budget  Effectiveness of the financial management processes as per the team’s feedback  Recommended improvements to financial management processes. Work on Section 3 of your Project. 19. Implement agreed improvements You are to implement one of the recommendations you have identified in the previous activity and provide the required evidence. Follow the instructions in your Portfolio to complete this task. Complete Section 3 of your Project Portfolio. Submit your Portfolio to your assessor. 20. Evaluate improvement You are to evaluate the improvement you implemented in the previous activity and provide the required evidence. Follow the instructions in your Portfolio to complete this task. Complete Section 4 of your Project Portfolio. 21. Submit your completed Project Portfolio Make sure you have completed all sections of your Project Portfolio, answered all questions, provided enough detail as indicated and proofread for spelling and grammar as necessary. Submit to your assessor for marking.

BSBWRT301 Write simple documents Trainer Guide Assessment Task 2: Checklist Student’s name: Did the student: Completed successfully? Comments Yes No Manage the budget and financial plan of an organisation for one reporting period? Access and review budget and financial plans for work team? Evaluate budget and financial plan outcomes? Negotiate at least one change required to be made to budget and financial plans? Develop contingency plans in case that the initial budget/financial plan needs to be varied? Communicate details of agreed budget and financial plans to relevant team members? During the presentation, demonstrate effective communication skills including:  speaking clearly and concisely  using non-verbal communication to assist with understanding  asking questions to identify required information  responding to questions as required  using active listening techniques to confirm understanding? Support team members to access resources and systems to perform required roles? Implement processes to monitor actual expenditure, control costs and modify contingency plans and according to

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BSBWRT301 Write simple documents Trainer Guide financial objectives? Report on budget and expenditure? Collect and assess information on effectiveness of financial management processes within work team? Analyse variance between actual and budgeted finances? Identify and recommend improvements to existing financial management processes? Implement agreed improvements as per the financial objectives of work team and organisation? Evaluate and report on agreed improvements to financial management processes? Task outcome: Satisfactory Not satisfactory Assessor signature: Assessor name: Date:

BSBWRT301 Write simple documents Trainer Guide Final results record Student name: Assessor name: Date Final assessment results Task Type Result Satisfactor y Unsatisfactory Did not submit Assessment Task 1 Knowledge questions S U DNS Assessment Task 2 Project Portfolio S U DNS Overall unit results C NYC Feedback  My performance in this unit has been discussed and explained to me.  I would like to appeal this assessment decision. Student signature: _________________________________________ Date: _________________  I hereby certify that this student has been assessed by me and that the assessment has been carried out according to the required assessment procedures. Assessor signature: _______________________________________ Date: _________________