FNS40211– Certificate IV in Bookkeeping
FNSBKG403A – Establish & Maintain Accrual Accounting System
Instruction to Students:
This Learner Guide / Student Assessment Workbook for FNSBKG403A Establish & maintain Accrual Accounting System contain details of your assessment works and the guidelines for you to be able to complete the requirements of unit of competency.
Unit Descriptor:
This unit describes the performance outcomes, skills and knowledge required to establish debtors and creditors, bad debt and contra entries, perform reconciliations, review compliance terms and conditions, plan a recovery action and prepare reports to set up and maintain a manual and computerised accrual accounting system.
This unit is applicable to individuals working within enterprises and job roles subject to licensing, legislative, regulatory or certification requirements including various aspects of the Tax Act, Goods and Services Tax (GST) rulings.
Prerequisite:
There is no pre-requisite for this unit.
Purpose of Assessment
To evaluate the candidate’s ability to demonstrate the knowledge and skill to develop an operational plan to deliver organisational business goals and objectives, in this unit you need to demonstrate how to develop recruitment strategy, Monitor and review the performance of operational plans. Also including action plan for implanting operational plan, analysis of an organisation’s physical resources and acquisition methods and make recommendations to improve the performance of an operational plan
An assessment is the process of gathering and judging evidence in order to decide whether has achieved a standard or objective and it is a competency based assessment. The competency-based assessment is the method of gathering and judging of evidence in order to decide whether you achieved a standard of competency.
Successful completion of assessments will contribute to the attainment of the following unit of competency:
FNSBKG403A Establish & maintain Accrual Accounting System.
Competency/Submission Details
For you to achieve competency in this unit, you are required to complete the following tasks and submit on the due date specified in your Training Plans. You must achieve satisfactory ratings on all tasks. Your Assessment Task must be submitted in print – out form.
Task Number Method of Assessment Venue of Assessment Due Date
Task 1 Case study ZIE Onsite Final week of the term
Task 2 Written Questions ZIE Onsite Final Week of the term
At each submission of your Assessment Task, you are to fill up the Assessment Cover Sheet and ensure that it is completely and accurately filled up. The Trainer / Assessor or Zarah Institute of Education (ZIE) representative will provide you with submission receipt to evidence that you have handed over your Assessment Task.
Upon completion of the Unit Assessments, the Trainer/Assessor will mark the Assessment Tasks and accomplish a Unit Result Summary Sheet to record the result and feedback. Your Trainer/ Assessor will discuss these with you and thereafter you will be asked to sign the declaration to evidence the feedback session.
Re-assessment
If the result of your Unit Assessment is “Not yet Competent (NYC)”, you will be given an opportunity for re-assessment. You will only work on the component/s of the Task/s that were marked “Not satisfactory”. The re-assessment must be completed within one (1) the study period. Please note that ZIE will provide two (2) chances for re-assessment at no cost.
Should you not able to achieve competency with all of these opportunities, you are required to repeat the unit at your own cost which will also impact on your extension of study period.
Reasonable Adjustments:
If you have special needs or disabilities, reasonable adjustment will be organised in accordance with the Special Needs / Disabilities Policy and Procedure of ZIE.
This may include but not limited to:
• Visual difficulty, we can assist by making adjustments such as larger print of documents and assessment tools and forms
• Physical disabilities, assessment may be broken down into shorter/longer lengths of time, where applicable
• Sick or have medical condition, due date extension may be provided
Skills Required
The required skills for you to demonstrate competency in this unit are:
• Communication skills to:
• Build relationships, determine and confirm client requirements, using questioning and active listening as required
• Deal with debtors in an empathetic manner to clear debts if possible
• Liaise with others, share information, listen and understand
• Use language and concepts appropriate to cultural differences
• Numeracy and IT skills to:
• Accurately analyse, code, record and store data in accordance with organisational requirements
• Access and use appropriate financial management software, spreadsheets and databases
• Use internet information
• Analysis for accessing, interpreting and managing relevant financial data
• Literacy skills for interpreting documentation and compiling reports
• Self-management skills for complying with ethical, legal and procedural requirements
• Problem solving skills to identify any issues that have the potential to impact on the debt recovery process or outcome and to develop options to resolve these issues when they arise or refer to other professionals as appropriate
• organizational skills, including the ability to plan and sequence work to provide a timely and professional service
• Teamwork skills to identify activities required with business owners and other relevant person
Knowledge Required
The required knowledge for you to demonstrate competency in this unit are:
• Legal systems and procedures relevant to debt recovery and necessary preliminary steps, timing and acceptable avenues for recovering debts
• Differences between cash and accrual accounting
• Relevant industry codes of practice
• Relevant organisational policies, procedures and guidelines related to the processing of transactions and records
• Relevant statutory, legislative and regulatory requirements specifically with relation to ensuring that all bookkeeping activities undertaken meet requirements related to Activity Statements
• Manual and computerised accounting systems
• Concepts of double-entry accountin
Critical Aspects
To achieve the competency in this unit, you must submit and demonstrate the knowledge and skill of the following evidence:
• Interpret and comply with relevant legislation
• Review accounts receivable and payable processes and identify bad and doubtful debts
• Deal with debtors in an empathetic manner
• Plan recovery actions in accordance with legal requirements
• Produce a trial balance.
Learning Resources:
1. IBSA learner Book
2. ZIE student theory Book
3. PowerPoint Presentation provided ZIE
4. A2Z Pty Ltd. Simulated workplace environment and
5. Small Print
For additional/general resources, please refer to the Training & Assessment strategy or ZIE training and assessment Resource list which can be accessed from the website and /or student handbook.

Critical Assessment Task 1 – Case Study
? You must complete this task correctly to demonstrate competency in this unit.
1. You are the accountant at BestPages Pty Ltd, a newly commencing newsagency and bookstore focused on the sale of newspapers, magazines, books and basic consumer products. The Store to be based in downtown Springfield will be one of the first since the local Boundaries bookstore closed recently. Mr Samuel Clements is the owner of the business and he has just purchased an old site, in Springfield that he plans to improve and make useable as the newsagency site. The owner is purchasing the site for $150,000, building for 50,000 and fixtures for $45,000. Mr Clements makes a contribution of $130,000, and will take out a mortgage for the remaining sum of $145,000.
You establish the following chart of accounts;
Assets Liabilities
1100 Cash
1111 Accounts Receivable
1122 Land & Grounds
1133 Buildings
1144 Fixtures & Equipment
2200 Accounts Payable
2201 Contra Accounts Payable
2211 Term Loan/Mortgage
Revenue Owner’s Equity
4400 Income from Sales
4401 Contra Control Sales Returns
4402 Contra Control Sales Discounts
4411 Income from Rental
3300 Owners Capital
Expenses
5500 Salaries Expense
5511 Amenities and Services Expenses
5522 Marketing and Advertising Expenses
5533 Repairs and Maintenance Expenses
5544 General, Misc. & Other Expenses
5555 COGS

The following occurred over the course of the accounting period:
May 1 The owner (Mr Clements) makes a deposit of $130,000 into the company bank account for the purpose of acquiring the building, land and fixtures.
May 2 The owner purchases the site for $150,000, building for $50,000 and fixtures for $45,000. Mr Clements takes out a mortgage for the remaining sum of $145,000.
May 3 Mr Clements then paid for a commercial to be produced and aired in the following month on local radio promoting his new newsagency. The Advertisement cost $500 to produce and $200 per play on KBBL, Springfield. Mt Clements wants 5 plays. He is required to pay a 10% deposit now for the production and airtime. The balance is due in 45 days.
May 4 Mr Clement decides to have a launch party, and purchases the following general supplies:
Promotional flyers and cards
Mailing costs
Food
Beverages Decorations $400
$500
$300
$200
$300
May 29 The business purchased inventory worth $30,000 on credit;
May 30 The owner then pays the appointed staff for the services rendered. Staff costs total $20,000 per month.
May 30 The company makes sales totalling 80,000 while the cost associated with those goods was 20,000 (these goods were purchased during the period). Of these goods $5000 was returned to the company, the COGS of the returned items were $1000.
In addition to the $80,000 sales, a once off service based sale of $10,000 was made with a discount of 10% of the $10,000 provided for early repayment, which the customer made (so the customer paid $9000). The invoice was issued on the 7th May and paid on the 10th May.
May 30 The company receives its electricity bill of $200, and pays the bill.
The company received a maintenance bill from the cleaning company that manages the cleaning and maintenance of the site for $400. The company pays the bill.
Required: complete the relevant entries within the ledger accounts provided. Generate a trial balance for the company.
GENERAL LEDGER – BestPages Pty Ltd (BP)
1100 - Cash
Date Particulars Folio Dr Cr Balance
1110 – Inventory
Date Particulars Folio Dr Cr Balance
1122 – Land & Grounds
Date Particulars Folio Dr Cr Balance
1133 - Buildings
Date Particulars Folio Dr Cr Balance
1144 – Fixtures and equipment
Date Particulars Folio Dr Cr Balance

1155 – Accounts Receivable
Date Particulars Folio Dr Cr Balance
2200 – Accounts payable
Date Particulars Folio Dr Cr Balance
2201 - Contra Acc. Payable Control Account
Date Particulars Folio Dr Cr Balance
2211 – Term Loan Payable
Date Particulars Folio Dr Cr Balance
3300 - Owners Capital
Date Particulars Folio Dr Cr Balance
3301 - Owners Drawings
Date Particulars Folio Dr Cr Balance
4400 Income from Sales
Date Particulars Folio Dr Cr Balance
4401 Contra Control Sales Returns
Date Particulars Folio Dr Cr Balance

4402 Contra Control Sales Discounts
Date Particulars Folio Dr Cr Balance
4411 Income from Rental
Date Particulars Folio Dr Cr Balance
30/05
5500 Salaries Expense
Date Particulars Folio Dr Cr Balance
5511 Amenities and Services Expenses
Date Particulars Folio Dr Cr Balance
5522 Marketing and Advertising Expenses
Date Particulars Folio Dr Cr Balance
5533 Repairs and Maintenance Expenses
Date Particulars Folio Dr Cr Balance
5544 General, Misc. & Other Expenses
Date Particulars Folio Dr Cr Balance
5555 COGS
Date Particulars Folio Dr Cr Balance

Trial Balance
Debit Credit
Cash
Inventory
Accounts Receivable
Land & Grounds
Buildings
Fixtures & Equipment
Accounts Payable
Contra Accounts Payable
Term Loan/Mortgage
Income from Sales
Contra Control Sales Returns
Contra Control Sales Discounts
Income from Rental
Owners Capital
Salaries Expense
Amenities and Services Expenses
Marketing and Advertising Expenses
Repairs and Maintenance Expenses
General, Misc. & Other Expenses
COGS
Total

2. The BestPages Pty Ltd is trading well and now has a number of ongoing purchasers, both retail and wholesale. It currently has no outstanding debtors. During the month a number of new customers start to purchase books in large quantities. Additionally it currently has no outstanding creditors. During the month a number of new purchase of books and related products are made. Purchases expense is used in this question to replace COGS.
The monthly events are as detailed;
• 1st June, the business purchases a large quantity of books to satisfy several wholesale orders; the purchase totals $100,000 in value. Payment terms are 45 days from the invoice date.
• 5th June, customer HealthFoods purchases a large quantity of books, totalling $100,000 in worth for their chain of health foods stores. Payment terms are 15 days from the invoice date. This remains unpaid at 30th June.
• 7th June, customer GymPro purchases a large quantity of books, totalling $50,000 in worth for their chain of gymnasiums. Payment terms are 15 days from the invoice date. This remains unpaid at 30th June.
• 9th June, customer HobbyShop purchases a large quantity of books, totalling $50,000 in worth for their chain of enthusiasts’ stores. Payment terms are 15 days from the invoice date. This remains unpaid at 30th June
• 10th June, customer Art Academy purchases a large quantity of books, totalling $100,000 in worth for artists’ academy. Payment terms are 15 days from the invoice date. This remains unpaid at 30th June.
Required: complete all of the relevant accounting entries relating to these transactions within the ledger accounts below for the month of June. Post an entry to account for Bad and Doubtful debts, which represents 10% of the value of accounts receivable for the month.

1111 – Accounts receivable
Date Particulars Folio Dr Cr Balance
2200 – Accounts payable
Date Particulars Folio Dr Cr Balance
5577– Purchases expense
Date Particulars Folio Dr Cr Balance
4400 – Sales
Date Particulars Folio Dr Cr Balance
4401– Provision for doubtful debts
Date Particulars Folio Dr Cr Balance
5801 – Doubtful debts expense
Date Particulars Folio Dr Cr Balance

3. It is the 31st July, the following month, and BestPages Pty Ltd still has a number of accounts receivable monies outstanding. Only HobbyShop has paid its invoice.
Required: Construct a schedule of debtors, based on the accounts receivable payment received and outstanding. Identify which accounts are past their due date.
4. It is the 15th of August and Mr Clements is a bit concerned about one of the debtors, GymPlus and the likelihood of receiving their payment. What can the company try to do to expedite payment? Describe the recourses available to the company in terms of debt recovery.

5. Mr Clements is a bit concerned about his debtors policies or lack thereof, he asks you the accountant to develop a viable policy in relation to identifying doubtful bets, posting appropriate doubtful debt entries, and follow up with outstanding accounts payable past due.
Required: provide a set of policies that the company could implement in relation to the matters that Mr Clements has raised.
Critical Assessment Task 2 – Written Questions
? You must complete this task correctly to demonstrate competency in this unit.
1. What is a contra deal?
2. Why is it important to have accountability structures in place in relation to contra deals?
3. Are there GST implications in relation to contra deals? Describe potential GST implications.
4. Describe why a sales returns contra account might be useful within a chart of accounts, rather than maintaining a sales account absent of a sales return account? E.g. what are the key benefits associated with such accounts?
5. Seymour runs a website design business and as such is a GST registered designer who accounts for GST on accrual basis and lodges quarterly activity statements. On 30/08/2013, he completed a new website for a client at an agreed charge of $8,800 (including GST). Seymour issued a valid tax invoice on the day of completion and the payment was received on 01/10/2013.
Seymour is advised by ATO to lodge his GST obligations for the Jul/Sep quarter 2013 (July – September). Please advise Seymour whether he should include the GST collected from the new website deal in the GST lodgement.
6. You are the accountant at OfficePlus Pty Ltd. You are identifying outstanding monies owed to the company, what are the relevant accounts and the steps involved in reviewing outstanding debtors?
7. As the accountant of OfficePlus Pty Ltd, an office supplies company, identify that several of the firm’s present debtors appear unwilling or unable to pay their outstanding debts. You are considering the steps that could be taken to hasten the recovery of the monies owed.
Required: Provide a plan for the recovery of debt that considers an approach to debt collection involving, firstly OfficePlus directly engaging with the debtors in an empathetic manner, and then alternative actions that may engage specialist collection firms in debt collection.
8. The process of accounting for businesses is moderated by a number of industry codes of practice and standards. Briefly explain the role of the AASB in relation to accounting standard setting?
9. What financial reports can be prepared based on the trial balance?