FNSACC414 Prepare financial statements for non reporting entities

pdf

School

Monarch Institute *

*We aren’t endorsed by this school

Course

ACCOUNTING

Subject

Accounting

Date

Apr 3, 2024

Type

pdf

Pages

Uploaded by SuperPencil12912

Unit/s assessed: FNSACC414 Prepare financial statements for non - reporting entities Assessment name: FNSACC414 Assignment Type of assessment This summative assessment will enable your assessor to make a judgement of competency based on the submission of your completed assessments against the requirements of the unit/s of competency in this module. Benchmark The assessment benchmark developed for each unit of competency is the evidence criteria used to judge the quality of performance (i.e., the assessment decision - making rules). Assessors use these benchmarks to make judgements on whether competency has been achieved and to determine if you have performed to the standard expected to meet the unit requirements. Reasonable adjustment Where appropriate monarch institute will allow flexibility in the way in which each unit is assessed based on the needs of an individual. Assessment coding Assessment of this course is established on competency - based principles: S = Satisfactory NS = Not Satisfactory If you fail to perform satisfactorily for the assessment in the prescribed way you may be assessed as ‘not satisfactory. You are required to be assessed as ‘satisfactory’ in all assessments for each unit of competency. Re - assessment Your assessment can be submitted after you have reviewed the learning materials and practiced enough to feel confident in your resubmission. You have two weeks from your last submission feedback to resubmit. You are re - assessed in only the areas where your assessor has indicated you were initially assessed as ns. It is at the assessor’s discretion to re - assess the entire assessment should an overall understanding not be demonstrated. When you are re - assessed as ‘satisfactory’ after re - submission you will achieve competency for this assessment. Declaration of understanding and authenticity I acknowledge the assessment process has been explained and agree that I am ready to undertake assessment. I am aware of where to find the assessor’s feedback for the assessment. I am aware of the appeals process, should the need arise. I also understand I must be assessed as ‘satisfactory’ in all parts of the assessment/s to gain an overall competent result for the unit/s of competency. If I am found to be ns after a second attempt, it is at the assessor’s discretion whether I may be permitted one final attempt. I am aware that a ‘not competent’ final outcome means I may incur fees for re - enrolment in the unit/s.

I certify that the attached material is my original work. No other person’s work has been used without due acknowledgement. I understand that the work submitted may be reproduced and/or communicated for the purpose of detecting plagiarism. I understand a person found responsible for academic misconduct will be subject to disciplinary action (refer to student information handbook). *I understand that by typing my name or inserting a digital signature into this box that I agree and am bound by the above student declaration. Student name*: Submission date^: Please make sure you use the same name that is in your enrolment documentation, including your surname. ^if this is a resubmission, you must use your resubmission date. For any re - submission, please ensure responses are in a different coloured font Submission instructions: Complete the declaration of understanding and authenticity (above). Once you have completed all parts of this assessment, login to the monarch learning management system (LMS) to submit your assessment. In the LMS, click on the link to ‘submit [assessment name]’ in your course and upload your assessment files. Click save and then click submit assignment. Please be sure to click ‘continue’ after clicking ‘submit assignment’.

Important assessment information  This is an open book assessment  You may use a handheld calculator and/or software to perform calculations  Please type your answers in the spaces provided Resources required From the LMS:  Textbook: Prepare Financial Statements for Non - Reporting Entities by Gavin Dumbrell & Rex Walsh  Additional documents in NeoZone Kids Resources folder  Additional documents in Sherville Resources folder Other:  Various links and articles provided throughout the assessment

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

Activity 1. 1.1 Name two (2) types of non - reporting entities. For each type of non - reporting entity, describe their key characteristics. Type of non - reporting entity Key characteristics Sole Proprietorships Owned and operated by a single individual. Owners have unlimited liability for business debts and obligations Relatively easy and inexpensive to set up and operate. Complete control over decision - making and operations. Partnerships Owned and operated by two or more individuals who share profits, losses, and responsibilities. Relatively easy to establish compared to corporations. Partners benefit from combined skills, resources, and expertise. 1.2 What are the differences between non - reporting entities and reporting entities when it comes to financial reporting? 1.3 A reporting entity is required to use a general - purpose financial report (GPFR) in accordance with Australian Accounting standards (AAS). This GPFR provides detailed financial information to stakeholders. Conversely, a non - reporting entity is not obligated to use a GPFR but can instead prepare a special purpose financial report that do not require the full requirements of AAS . 1.4 What is the purpose of preparing financial statements for non - reporting entities? The preparation of financial statements for non - reporting entities serves the purpose of supporting internal decision - making, fulfilling taxation obligations, meeting external stakeholder needs, complying with legal requirements, and monitoring financial performance. Though the level of detail and disclosure may be less extensive compared to reporting entities, financial statements remain essential for effective financial management and accountability.

1.5 Businesses that are registered for GST must honour specific obligations. a. List the criteria for a supply to be classed as a taxable supply. i. The supply is for consideration (cash or kind) ii. The supply is made in the course of business (not a private expenses) iii. The supply is connected with Australia iv. The supply is not GST free or input taxed. b. List five examples of supplies that include GST. i. Clothing ii. Building supplies iii. Electricity iv. Office supplies v. Cosmetics and meals from restaurant 1.6 Outline the key differences between special and general purpose financial statements. General Purpose Financial Statements:  Intended for a wide range of users.  Comply with Australian Accounting Standards (AAS)  Include extensive disclosures.  Primarily used for external reporting.  Special Purpose Financial Statements: Tailored for specific users or purposes.  Offer flexibility in presentation and disclosure.  Customized to meet the needs of intended users.  May have limited disclosure requirements. Overall, general purpose statements provide comprehensive information for external stakeholders, while special purpose statements are customized to fulfil specific user needs or purposes.

1.7 Different financial reports can be used to present financial data. What is the purpose of the following financial reports? Report Purpose Income statement The income statement summarizes a company's revenues, expenses, gains, and losses over a specific period. Its purpose is to show the profitability of a business during a given time frame, typically a month, quarter, or year. By comparing revenues to expenses, it demonstrates whether a company has made a profit or incurred a loss over the reporting period. Balance sheet The balance sheet provides a snapshot of a company's financial position at a specific point in time, usually the end of a reporting period such as a quarter or year. It presents a company's assets, liabilities, and shareholders' equity. The balance sheet's purpose is to show what a company owns (assets), what it owes (liabilities), and the residual interest in the company's assets after deducting liabilities (shareholders' equity). It helps stakeholders assess the financial health and stability of a company. Statement of cash flows The statement of cash flows reports the cash inflows and outflows resulting from a company's operating, investing, and financing activities over a specific period, typically a month, quarter, or year. Its purpose is to provide insights into how a company generates and uses cash, which is crucial for assessing its liquidity, solvency, and ability to meet its financial obligations. The statement of cash flows helps investors, creditors, and other stakeholders understand the sources and uses of cash within a company, complementing information provided by the income statement and balance sheet. 1.8 Outline the two (2) types of deductions allowed under the Income Tax Assessment Act 1997 Division 8. i. General Deductions:  Expenses incurred in generating assessable income or conducting a business.  Examples include employee wages, rent for business premises, utilities, advertising costs, and depreciation of assets used in the business.  Criteria: Directly related to income - earning activities, not of a capital, private, or domestic nature, and incurred during the income - producing period.

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version

Access to all documents
Unlimited textbook solutions
24/7 expert homework help

ii. Specific Deductions:  Expenses explicitly permitted and outlined in the Income Tax Assessment Act for specific categories.  Examples include donations to approved charities, expenses related to managing tax affairs, and certain types of capital expenses.  Criteria: Subject to specific eligibility criteria and limitations specified in the legislation. 1.9 List three types of entities required to produce annual financial reports that comply with the Australian Accounting Standards under the Corporations Act 2001 (Cth). i. Public companies ii. Large proprietary companies iii. Registered foreign companies

1.10 Name each legislation described below. Key features Legislation Regulates the operation of business entities in Australia. Is administered by the Australian Securities and Investment Commission (ASIC) Corporations Act 2001 Specifies the tax payable on sales and when a business must register to claim credits for goods and services tax included in goods purchased A New Tax System (Goods and Services Tax) Act 1999 The Act is a statute used to calculate income tax assessments and provides rules for deductions for business expenses Income Tax Assessment Act 1997

Your preview ends here

Eager to read complete document? Join bartleby learn and gain access to the full version