(BSBCMN308A) Maintain Financial Records

Maintain financial records(BSBCMN308A)

To gain competency in this unit you are required to maintain financial records for a business, including the maintenance of daily financial records,reconciliation of debtors' and creditors' systems as well as the maintenanceof the general ledger and the preparation of a trial balance. You also need practice in the monitoring of cash for accounting purposes.

The following exercises are designed to enable practice in the following:

Maintenance of daily financial records - Daily financial records are maintained correctly and in accordance with organisational requirements for accounting purposes. Any discrepancies or errors in documentation or transactions are identified and rectified, and credit and debit transactions are accurately and promptly entered.

Maintenance of the general ledger – The general ledger is maintained. Transactions are posted into the general ledger, with both debtors' and creditors' systemsbeing reconciled with general ledger. A trial balance is accurately prepared from general ledger.

Monitoring of cash control - The cash flow is accurately accounted for. All payments are made and received. Any outstanding accounts are collected or followed, and all payment documentation is checked for accuracy of information and dispatched to creditors.

Exercise 1: Red Back Spider Sales

Adam Baxter is the proprietor of the trading business called “Red Back Spider Sales” which is located, in a little shopping centre, at 123 Civic Road, Apollo Parklands 3095

Adam purchases the spiders (a magic little computer device) in bulk and resells to the public to assist people with their “web pages”. Adam has developed this profitable business over a number of years. He has found that maintaining an accrual double-entry accounting system using “QuickBooks” is the easiest and most effective method of obtaining relevant financial information.

Open the QuickBooks Software.QuickBooks is a fully integrated small business accounting package.

To open this company double -click on the QuickBooks icon

The QuickBooks Navigator will appear for the company titled “Red Back Spider Sales”

If the this company does not appear you will need to select - File – Open company

Click on Red Back Spider Sales”

Task 1: Process theseFebruary 2010transactions into appropriate ledgers.

RECEIPTS FROM CUSTOMERS:

A RECEIPT provides proof that payment was received.

Mr/Mrs/Ms:
Company: Emma’s Exotic DesignsDATE: Feb 1
Address:545 Apollo Parklands Rd
City & State: Apollo ParklandsPost Code: 3095
Phone: (Res) / Phone (Bus)
INVOICED AMOUNT:______$ 100.00
LESS DISCOUNT:______$ 0.00 / RED BACK SPIDER SALES
THANKYOU
RECEIVED FROM CUSTOMER / $100.00 / Receipt NO: 1
CASH / 
CHEQUE
VISA/MC/AM EX / 
 / Deposited By:

This source document is processed by clicking on Receive Payments from the Customers Tag from the Home screen.

In the customer job field use the pull down list and select Emma’s Exotic Designs. Tab to the amount field and key in 100. The payment method is by Cheque.

Click on the deposit to section and select Apollo Parklands Credit Union from the drop down menu.

Then Click onSave & Close.

CASH SALES

Red Back Spider Sales
Daily Cash Sales
Date: /

February 2

Total Quantity Sold / 50
Total Cash Collected / $192.50

Banked

/ February 2

Select the Homescreen. Then click on CreateSales Receipts. (You do not any assistance with the form layout)

In the customer job section click on Add New. Key in Cash Sales. Then click on OK. The date is Feb 2.

In the Sold To section key in Cash Sales. Use the down arrow to get to the Item section. Select “Red Back Spiders” using the drop-down arrow.

Tab across twice to the QTY field and key in 50. The total should be $175.00, plusGST of $17.50.

Now click on the dot labelled “Deposit To:” and the Apollo Parklands Credit Union should appear. (This has the effect of depositing the money into the bank account.)

Then click on Save & Close.

PAYMENTS BY CHEQUE:

NICK’S ADVERTISING

111 CIVIC RD APOLLO PARKLANDS 3095

FEB 3

QTY / DESCRIPTION OF ADVERTISING / RATE / AMOUNT
2 SMALL /

Advertising shop opening and location

/ 25.00 / $50.00
Paid cheque 12000 / GST / $5.00
Total / $55.00

THE WIDEST READERSHIP IN THE WHOLE OF TOWN

To process the following cheque, click on Home screen, and then Write Cheques and enter the appropriate details.

Untick the “To be printed” box in the top right hand corner of the cheque and then key in the cheque number 12000.

Key in Nick’s Advertising and press TAB to Quick Add, Other for the details of the payee. Then click on OK.

Key in 55.00 in the amount area.

In the Account section at the bottom select Accrued Advertising from the pull down menu. Then press the TAB key and key in NCG as the tax code.

Then click on Save & Close.

PURCHASES OF STOCK ON CREDIT:

To process this transaction you need to establish a list of suppliers. From the Home screen select Receive Inventory – Receive Inventory with Bill.

Use the scroll arrow to select Jason’s Spider Supplies.

Click in the ITEM SECTION and use the black arrow to select Red Back Spiders. TAB across and key in 150 in QTY. TAB across and 150 should appear in AMOUNT.

Jason’s Spider Supplies
Deluxe Industrial Web Parts
4567 SMITH ST COLLINGWOOD
DATE: Feb 4 INVOICE NUMBER: 3454
SUPPLIED TO: Red Back Spider Sales
Civic Road
Apollo Parklands 3095
ITEM NO / DETAILS / ITEM COST / COST
O124 / Red Back Spiders 150 units
Satisfaction Guaranteed / $1.00
GST
Total / $150
15
$165 / 00
00
00

Click on Save & Close

DRAWINGS OF STOCK BY THE OWNER:

On February 5 the owner withdrew one spider for his own use.

Select Adjust Qty on Hand from theHome screen.

In the adjustment account section key in Drawings. Press the Tab key to set it up as an equity account. Then click on OK. A message about an income or expense account is expected. Just click on OK.

In the new Qty column key in 399. Press the Tab key and -1 should appear in the difference column. Then click on Save & Close.

THE PURCHASE OF A NON-CURRENT ASSET:

N LAND INDUSTRIES

1 CIVIC RD APOLLO PARKLANDS 3095

FEB 6

QTY / DESCRIPTION OF GOODS / RATE / AMOUNT
10 / storage containers / 4.50 / $ 45.00
GST / $4.50
Total / $49.50

SERVICE GUARANTEED AT ALL TIMES

To process this document you need to complete a General Journal entry.

Select Company Menu – (at the top of the screen). Scroll down and select Make Journal Entries.

Select Storage Containers using the scroll arrow. Key in 45.00 into the debit column. CAG is the tax code.

Tab to the second line in the Account column and key in N Land Industries. (Other Current Liability) Tab to ensure 49.50 is in the credit column. Then click on Save & Close.

Do you remember how to record a cash receipt from a customer?

Mr/Mrs/Ms:
Company: Susie’s ComputersDATE: Feb 7
Address:45 Apollo Parklands Rd
City & State: Apollo ParklandsPost Code: 3095
Phone: (Res) / Phone (Bus)
INVOICED AMOUNT:______$ 100.00
LESS DISCOUNT:______$ 0.00 / RED BACK SPIDER SALES
THANKYOU
RECEIVED FROM CUSTOMER / $100.00 / Receipt NO: 2
CASH / 
CHEQUE
VISA/MC/AM EX / 
 / Deposited By:
Red Back Spider Sales
Daily Cash Sales
Date: /

February 8

Total Quantity Sold / 60
Total Cash Collected / $231.00

Banked

/ February 8

ADDITIONAL CAPITAL BY THE OWNER:

On February 9 the owner contributed a further $350 to the business.

This requires another General Journal entry with the Apollo Parklands Credit Union as the debit entry (NCF is the tax code for both entries) and Opening Bal Equity as the credit entry.

PAYMENT OF SUPPLIERS:

Cheque No: 12001 / DATE: Feb 10
Balance b/d
Amount: $150
Balance c/f / To: Jason’s Spider Supplies
For: 150 units

Select Home screen, followed by Pay Bills.

The payment method is cheque. Ensure that the green dot is in the assign cheques number section.

When you click next to Jason’s Spider Supplies you will place a tick against the name. The amount is$150.00.

Click on Pay selected Bills. Ensure that the green dot is next to “Automatically assign a cheques number……”

Mr/Mrs/Ms:
Company: Emma’s Exotic DesignsDATE: Feb 11
Address:545 Apollo Parklands Rd
City & State: Apollo ParklandsPost Code: 3095
Phone: (Res) / Phone (Bus)
INVOICED AMOUNT:______$ 50.00
LESS DISCOUNT:______$ 0.00 / RED BACK SPIDER SALES
THANKYOU
RECEIVED FROM CUSTOMER / $50.00 / Receipt NO: 3
CASH / 
CHEQUE
VISA/MC/AM EX / 
 / Deposited By:
Cheque No: 12002 / DATE: Feb 12
Balance b/d
Amount:$49.50
Balance c/f / To: Telstra
For: telephone rental – NCG tax code
Cheque No: 12003 / DATE: Feb 13
Balance b/d
Amount:$100.00
Balance c/f / To: Bradley’s Products
For: supply of spiders

(Don’t forget that this cheque is paid via the Pay Bills area of the Suppliers section on the Home screen).

Red Back Spider Sales
Daily Cash Sales
Date: /

February 14

Total Quantity Sold / 100
Total Cash Collected / $385.00

Banked

/ February 14
Cheque No: 12004 / DATE: Feb 15
Balance b/d
Amount:$22.00
Balance c/f / To: Adam’s window cleaning services
For: front window cleaning – NCG tax code
Mr/Mrs/Ms:
Company: Rita’s New DesignsDATE: Feb 16
Address:545 Civic Rd
City & State: Apollo ParklandsPost Code: 3095
Phone: (Res) / Phone (Bus)
INVOICED AMOUNT:______$ 75.00
LESS DISCOUNT:______$ 0.00 / RED BACK SPIDER SALES
THANKYOU
RECEIVED FROM CUSTOMER / $75.00 / Receipt NO: 4
CASH / 
CHEQUE
VISA/MC/AM EX / 
 / Deposited By:

CREDIT SALES:

RED BACK SPIDER SALES
the magic web device
Civic Road ELTHAM NORTH 3095 TELEPHONE 943867676
SUPPLIED TO: Susie’s Computer
45 Civic Road
Apollo Parklands 3095
DATE: February 17 / INVOICE NO:
STH0001
ITEM / DETAILS / UNITS / TOTAL
Red Back spiders / spider web devises
TERMS: 10/7 NET 30 / 35
GST
Total / $122.50
12.25
$134.75

To process this document from select theHome Screen.

Then select Invoices. Use the pull down arrow to select Susie’s Computers in the Customer Job section. Then fill in the relevant sales information. Ensure that the tax code is GST. Then click on Save & New

RED BACK SPIDER SALES
the magic web device
Civic Road ELTHAM NORTH 3095 TELEPHONE 943867676
SUPPLIED TO: Natasha’s Web Pages
666 Apollo Parklands Drive
Apollo Parklands 3095
DATE: February 18 / INVOICE NO:
STH0002
ITEM / DETAILS / UNITS / TOTAL
Red Back spiders / spider web devises
TERMS: 10/7 NET 30 / 50
GST
Total / $175.00
$17.50
$192.50
Red Back Spider Sales
Daily Cash Sales
Date: /

February 19

Total Quantity Sold / 26
Total Cash Collected / $100.10

Banked

/ February 19
Cheque No: 12005 / DATE: Feb 20
Balance b/d
Amount:$66.00
Balance c/f / To: Adam’s Specialty Motors
For: petrol
Red Back Spider Sales
Daily Cash Sales
Date: /

February 21

Total Quantity Sold / 50
Total Cash Collected / $192.50

Banked

/ February 21

OFFICE SUPPLIES

SPECIALITIES

999 BOURKE ST ELTHAM 3095

DATE: FEBRUARY 22 / ORDER NO: / SALES NO:
DEPT / SOLD BY George / DELIVERY:
SSS Taxi Trucks
Model No: / DESCRIPTION OF GOODS / QTY / RATE
Model 57 / Office stationery
TERMS: NET CASH WITHIN 30 DAYS
Paid chq 12006 $110.00 / 1
GST / $100.00
$10.00
Apollo Parklands Office Supplies / INVOICE
222 Civic Road
Apollo Parklands 3095
Telephone 94387777 / INVOICE NO: 2223
DATE: Feb 23
Item supplied to: Red Back Spider Sales
123 Civic Road
Apollo Parklands 3095
QUANTITY / DESCRIPTION / UNIT PRICE / AMOUNT
1 / Cash Register style Y67 / $450.00 / $450.00
Subtotal
GST / 45.00
Shipping & Handling
TOTAL DUE / $495.00
THANKYOU FOR YOUR BUSINESS
Make all cheques payable to: Shop Fittings Pty Ltd
If you have any queries concerning this invoice, call Troy Taylor 94387777

To process this source document the two accounts will be cash register (fixed asset) as the debit entry and Apollo Parklands Office Supplies (OTHER CURRENT LIABILITY) as the credit entry.

Cheque No: 12007 / DATE: Feb 24
Balance b/d
Amount:$38.50
Balance c/f / To: United Energy
For: Electricity
121 Bourke Rd
Balwyn / BRADLEY’S PRODUCTS Manufactures of Web Units
DATE: Feb 25 / SUPPLIED TO:
Red Back Spider Sales
Civic Rd
Apollo Parklands 3095 / INVOICE NO: AB12112
ITEM NO / DETAILS / QUANTITY / PRICE
O123 / Red Back Spider Units / 450 units / $450.00
GST
TOTAL / $45.00
$495.00
PLEASE NOTE: NET 30 DAYS
101 Plenty Rd
Apollo Parklands / APOLLO PARKLANDS NEWS
PTY LTD
DATE:
February 26 / SUPPLIED TO:
Red Back Spider Supplies
Civic Rd
Apollo Parklands 3095 / INVOICE NO: RD7975
ITEM NO / DETAILS / QUANTITY / PRICE
weekly add / 1/4 page add weekly / 22 weeks / $60.00
Cheque No: 12008 / GST
Total / $6.00
$66.00
PLEASE NOTE: NET 30 DAYS
Cheque No: 12009 / DATE: Feb 27
Balance b/d
Amount:$200.00
Balance c/f / To: Cash
For: drawings
Red Back Spider Sales
Daily Cash Sales
Date: /

February 28

Total Quantity Sold / 150
Total Cash Collected / $577.50

Banked

/ February 28
RED BACK SPIDER SALES
the magic web device
Civic Road ELTHAM NORTH 3095 TELEPHONE 943867676
SUPPLIED TO: Emma’s Exotic Designs
545 Civic Road
Apollo Parklands 3095
DATE: February 28 / INVOICE NO:
STH0003
ITEM / DETAILS / UNITS / TOTAL
Red Back spiders / spider web devises
TERMS: 10/7 NET 30 / 55
GST
Total / $192.50
$19.25
$211.75
RED BACK SPIDER SALES
the magic web device
Civic Road ELTHAM NORTH 3095 TELEPHONE 943867676
SUPPLIED TO: Rita’s New Designs
545 Civic Road
Apollo Parklands 3095
DATE: February 28 / INVOICE NO:
STH0004
ITEM / DETAILS / UNITS / TOTAL
Red Back spiders / spider web devises
TERMS: 10/7 NET 30 / 100
GST
Total / $350.00
$35.00
$385.00

Task 2: Record the February 28 balance-day adjustments into the appropriate ledgers.

PREPAID REVENUE

From the Companymenu (top of the screen) select Make General Journal Entries.

Select Accounts Receivable from the Chart of Accounts.

Key in 50

In thename column select Rita’s New Designs from the drop down menu.

Click on the second line and key in Prepaid Revenue.

PressTAB and set up this account as an Other Current Liability.

Click onSave & New

ACCRUED EXPENSES

Add Council Rates Expense to the Chart of Accounts. Key in 100

Click on the second line and key in Accrued Council Rates.

PressTAB and set up this account as an Other Current Liability.

Click on Next.

Add RoofRepair Expense to the Chart of Accounts.Key in 350

Click on the second line and key in Accrued Roof Repair Expense.

Click on Next.

PREPAID EXPENSES

Add Prepaid Advertisingto the Chart of Accounts (Other Current assets).

Press TAB and key in 30

Click on the second line and use the pull down lists to select the Advertising Account.

Click onSave & Close.

STOCK ADJUSTMENTS:

The stock take at February 28showed that there are only220 units on hand.

From ReportsCentreselect Inventory, Inventory Stock Status by Itemto see the stock figures in your records. Close the screen.

From theHome screen select Adjust Qty on Hand.

In the field Adjustment Account, key in Stock Loss. Tab

Use Set Up to establish this account as a Cost of Goods Sold Account.

In the field New Quantity enter the new numbers for the stock. The adjusted numbers on hand will appear in the Quantity Difference column.

Click on Save & Close.

Task 3: Reports & Graphs

A:Prepare a Trial Balance as at February 28

From the Reports Centre select Accountant & Taxes - Trial Balance.

Key in the dates of 1/2/2010 and 28/2/2010 and click on Display.