Course Name FNS60215
Advanced Diploma of Accounting
Subject/module Management Accounting
Assessment method Scenario
Units of Competency FNSACC613
Prepare and Analyse Management Accounting Information
1. Assessments should be completed as per your trainer’s instructions.
2. Assessments must be submitted by the due date to avoid a late submission penalty.
3. Plagiarism is copying someone else’s work and submitting it as your own. You must write your answers in your own words and include a reference list. A mark of zero will be given for any assessment or part of an assessment that has been plagiarised.
4. You may discuss your assessments with other students, but submitting identical answers to other students will result in a failing grade. Your answers must be yours alone.
5. Your trainer will advise whether the assessment should be digitally uploaded or submitted in hard copy. Assessments that are digitally uploaded should be saved in pdf format.
6. You must attempt all questions.
7. You must pass all assessments in order to pass the subject.
8. All assessments are to be completed in accordance with WHS regulatory requirements.
Part A – Accounting Information Systems Scenario 1:
Chart of accounts
Designing an accounting system, refer to page 324 of the financial accounting text book and review the section on designing account numbers.
Assign account numbers for the list below to the accounts of Clarke Logistics
Jan Marks, Drawing Inventory
Service Revenue Accounts payable
Depreciation Expense Jan mark’s Capital Account
Numbers from which to choose:
Use the following abbreviations to indicate the journal in which you would record
transactions ‘a’ through to ‘n’ (10 marks)
J = General journal
S = Sales journal
CR = Cash Receipts journal
P = Purchase Journal
CP = Cash Payments
a. Cash purchase of inventory
b. Collection of dividends revenue earned on an investment
c. Pre-payment of insurance
d. Borrowing money on a non-current bill
e. Purchase of equipment on credit
f. Cost of sales along with a credit sale
g. Cash sale of inventory
h. Payment of rent
i. Depreciation of computer equipment
j. Purchase of inventory on credit
k. Collection of accounts receivable
l. Expiration of prepaid insurance
m. Sale on credit
n. Payment on account
Assessment 2 Part B – Budgeting Scenario 3:
Brian Hunt runs a hardware store on the North Coast, called Hunt Hardware. He has been in business for only 6 months and is very confused about the financial side of the business, but realises it is an important part of his business. He has asked you to prepare his budget.
In preparation for working out his Cash Budget he provides the following information:
• 80% of credit sales are paid for in the month they are sold, with the remainder paid in the following month.
• All his credit purchases come from a single distributor who offers a 5% discount if he pays within 21 days from the invoice date, and Brian always makes the payment within the discount window, but due to invoice dates, 30% of the credit purchases are not paid for until the month after the purchase.
Current Months JAN $ FEB $ MARCH $
Cash Sales $ 12,000.00 $ 11,500.00 $ 12,500.00
Credit Sales $ 10,000.00 $ 11,000.00 $ 12,000.00
Cash Purchases $ 600.00 $ 500.00 $ 1,000.00
Credit Purchases $ 6,000.00 $ 7,000.00 $ 8,000.00
Expenses $ 7,900.00 $ 6,000.00 $ 8,500.00
f On January 1, Brian will owe $1900 for purchases and be owed $1,000 from credit customers and will have a bank balance of $4,300
f Expenses include wages (gross) of $2,000 per month, depreciation of $400 per month and insurance of $6000 per year
f The only deduction from gross wages is PAYG tax calculated at 20% of gross wages. The PAYG is paid to the ATO by 18th of the following month of the deduction. The employee was on holidays in December so there was no outstanding PAYG to be paid in January.
f Insurance is paid yearly in March ? All other expenses are paid for in the month stated in the budget ? Brian plans to buy a new front counter in January, and estimates the cost will be $10,000
f Brian will withdraw $3,000 from the business monthly , $2,900 in cash and the rest in goods ? Ignore GST implications for the purpose of this case study.
Brian has employed you to help him manage his budgets and financial plans. He requires you to prepare a Cash Budget for Hunt Hardware and then identify the financial risks that may exist for the business.
The organisational protocols for reporting on budget and expenditure are that daily reporting of sales and payments be recorded, and then an overview is produced at the end of the week. Finance needs to report this information to the owner weekly. Consumables, assets, stock and wastage are only monitored every 4 months.
1. Prepare a report including the budgets and financial risks involved with the business. You will need to suggest some strategies that will protect the business against any risks identified and any contingencies that should be in place to maintain the performance of the business to the set budgets.
2. List the required financial roles that you will allocate to Brian regarding the management of finances. You need to list the support that you can recommend to Brian to ensure that he can competently perform his required roles associated with the management of finances. (10 marks)
3. Analyse the data to determine the effectiveness of the current financial management processes and identify and recommend any improvements.
Assessment 2 total: 60 marks
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