Jan NGUYEN_CS12921_FINANCE IN BUSINESS_ASSESSMENT 1

Jan NGUYEN_CS12921 FINANCE IN BUSINESS _ASSESSMENT 1 Part A: Written Responses Question 1: a. What are requirements regarding identifying and rectifying errors in documentation? The requirements regarding identifying and rectifying errors in documentation include: Thorough Review: Regularly reviewing financial documents and records to identify any discrepancies, inconsistencies, or errors. Prompt Correction: Once errors are detected, they should be rectified as soon as possible to ensure accurate financial reporting. Documentation: Documenting the process of identifying and correcting errors, including the date, nature of the error, the correction made, and the individual responsible for the correction. Internal Controls: Implementing internal controls, such as segregation of duties and reconciliation processes, to prevent and detect errors in documentation. Documentation Retention: Keeping a record of the corrected documentation along with the original document, explaining the reason for correction as Bento et al.,(2018) says. Professional Assistance: Seeking professional guidance, such as from accountants or financial experts, in cases of complex errors or uncertainties in the correction process. Consistency: Ensuring consistency in the correction process across all documentation and records. Audit Trail: Maintaining a clear audit trail demonstrates the process of error identification, rectification, and the corresponding changes made. b. How can you ensure that credit and debit transactions are accurately recorded in accordance with organisational requirements? Below are the outlines key steps and practices to ensure credit and debit transactions are recoded accurately :

Detailed Documentation: Maintain a comprehensive and organized system of source documents for each transaction. These documents serve as evidence and provide details for accurate recording. Segregation of Duties: Implement a segregation of duties policy where different individuals are responsible for initiating, authorizing, recording, and reconciling transactions. This helps prevent errors or fraud by adding checks and balances to the process. Reconciliation: Regularly reconcile financial statements and records to identify any discrepancies between recorded transactions and actual balances. Reconciliation ensures accuracy and detects errors promptly. Use of Special Journals: Employ specialized journals like cash receipts, cash payments, sales, and purchases journals to categorize and streamline transactions. This helps maintain order and accuracy in recording. Account Coding: Apply a consistent and standardized coding system to categorize transactions accurately. This coding system ensures uniformity and simplifies the recording process. Double-Entry System: Follow the double-entry accounting system where every transaction affects at least two accounts with equal and opposite entries. This system maintains the fundamental accounting equation (Assets = Liabilities + Owner's Equity). Data Entry Review: Establish a review process for data entry to catch any errors or inconsistencies before transactions are recorded as advocates Imene and Imhanzenobe, (2020).This can include a secondary review by a different individual. Automation and Software: Utilize accounting software and automated systems to record transactions. These tools often have built-in validation checks and can reduce the likelihood of manual data entry errors. Regular Training: Provide ongoing training to employees involved in recording transactions. Ensure they understand the importance of accurate recording and the specific organizational requirements. Internal Controls: Implement internal controls, such as approval workflows and access restrictions, to ensure that only authorized individuals can initiate, approve, and record transactions. Regular Audits: Conduct regular internal audits to verify the accuracy of recorded transactions and to identify any gaps in the recording process. Financial Reporting Standards: Adhere to relevant financial reporting standards, such as Generally Accepted Accounting Principles (GAAP) or International Financial Reporting Standards (IFRS), to ensure that transactions are recorded in compliance with industry norms. Question 2:

Part B: Case Study Question 1: Use the following templates to prepare cash receipts journal, cash payments journal, sales journal, and purchases journal for March 2021. Cash Receipts Journal Date Details Bank Accounts Receivabl e Sales GST Collected Capital Loan 1 March Capital 5000 5000 2 March NAB loan 8000 10 March Cash sales 600 600 60 22 March Cash sales 110 100 10 30 March Receipt from John 1500 Cash Payments Journal Date Details Bank Accounts Payable Purchases GST Paid Wages Sundry 16 March Cash purchases 8000 20 March Wages 600 25 March Paid to Officework s 2200 Sales Journal Date Customer Accounts Receivable Sales GST Collected 3 March John 9900 9000 900 4 March John -110 -100 10 Purchases Journal Date Supplier Accounts Payable Purchases GST Paid Equipment 7 March Officeworks Equipment 1100 1000 200 2000 12 March XYZ Suppliers -110 -100 100

13 March XYZ Suppliers -10 Question 2: Post all the transactions from the journals in Question 1 to the general ledgers. Date Details Debit $ Credit $ Balance $ Account Name: Cash at Bank 1 March Capital 5000 5000 2 March Loan 8000 13000 10 March sales 600 12400 16 March purchases 8000 4400 20 March wages 600 3800 22March sales 100 3900 25 March Accounts Payable 2200 1700 30 March Accounts receivable 1500 3200 Account Name: GST Collected 3 March Sales 900 900 4 March Sales return 10 890 10 March Sales 60 950 22 March Sales 10 960 Account Name: Capital 1 March Cash at bank 5000 5000 Account Name: Loan 2 March Cash at bank 8000 8000 Account Name: Equipment 7 March Accounts payable 2200 -200 Account Name: Accounts Payable 7 March Equipment 2000 2000 12 March Purchases 1000 1000 13 March Purchase return 990 10 25 march Cash at bank 2200 780 Account Name: Accounts Receivable 3 March Sales 9000 9000 4 March Sales return 100 110 9800 30 March Cash at bank 1500 1500 11300

Close all the revenue and expenses and prepare the post-closing trial balance. The profit should be transferred to the account of Capital. Post-closing Trial Balance as at 31 March 2021 DR ($) CR ($) Cash at bank Accounts receivable 1500 Equipment 4200 Accounts payable 910 GST collected 630 GST paid 10 1090 Loan 8000 Capital 20380 TOTAL 8920 23900

references: Bento, R. F., Mertins, L., & White, L. F. (2018). Risk management and internal control: A study of management accounting practice. In Advances in management accounting (Vol. 30, pp. 1-25). Emerald Publishing Limited. Imene, F., & Imhanzenobe, J. (2020). Information technology and the accountant today: What has really changed?. Journal of Accounting and Taxation , 12 (1), 48-60.