VR261023: Fundamentals of Accounting in Practice Assessment

2(a)Post the following journals for Trish’s Teddy Bears to their respective ledgers. Below is an example ofa chart of account system you can use as a guide.

(b) Finalise a trial balance for Trish’s Teddy Bears from the ledgers ensuring to correct any errors.

(c) Prepare a report documenting that the Trial Balance is correct and reporting any irregularities (note: if there are no irregularities, include that in the report).

(d)Prepare a report for management, reconciling the creditor control account with the individual amounts for each creditor.

3 (a)Bulls Eye has an ABN that is your mobile phone number with a 0 at the end and an ACN that is the same number without the first two digits. Bulls Eye’s office is the same as your residential address and has your phone numbers. The fax is connected to the phone number. Their web address is bullseye.com.au

Bulls Eye journals and ledgers

• 01/06/XX William Told transferred his private van worth $35,000 and $9,000 worth of his own private archery equipment which is to be used as the stock at start (stock number 001 with a cost price of $10 per unit) into his new business he has called “Bulls Eye”. William intends to sell the archery equipment at his new store and at archery events.
• 02/06/XX William transferred $120,000 of his own money into a new business bank account. A bank deposit slip with the number 4545 was collected as evidence.
• 03/06/XX William used his new business bank account EFTPOS to buy a cash register for $7,000 so he could collect funds properly. He sold 650 units and raised a sale invoice for $13,000 with the number S8541 on the top right-hand side of the document.
• 04/06/XX William bought $20,000 worth of archery equipment with a cost price of $10 per unit using his business bank EFTPOS card. He received an invoice/receipt with the number of L76667.
• 05/06/XX William sold $25,000 worth of archery equipment at $20 per unit at the Sydney Archery Classic for cash. He deposited the cash into his business bank account number 6655 9373 534 at 2.50pm with a bank deposit slip number 7629.
• 06/06/XX William purchased dart boards for $5 a unit from Stapleton PTY. LTD. on credit worth $13,750. He received an invoice with the number S7390.
• 06/06/XX William purchased $12,000 worth of archery equipment (stock number 003 with a cost price of $10 per unit) on credit from Littleton PTY. LTD. with invoice number P9912.
• 07/06/XX William deposited an additional $5,000 into his business bank account, number 6655 9373 534 at 10.15 am as he anticipated he would need it soon as there were some direct debits from his bank he was expecting. He received a deposit slip number 7886.
• 08/06/XX William noticed on his bank statement that he had received interest of $130.
• 09/06/XX William sold dart boards for $17 each on credit to Henderson PTY. LTD. for $8,500 and issued (invoice number 1).
• 10/06/XX $2,006 of the dart boards sold to Henderson PTY. LTD. were returned and so he issued a credit note number 1.
• 11/06/XX William examined the dart boards and agreed with the client that they were faulty. He returned them to the supplier, Stapleton Pty. Ltd. and received a $590 credit note.
• 12/06/XX William decided to fully settle the Stapleton PTY. LTD. account.
• 13/06/XX Henderson PTY. LTD. paid their account in full.
• 14/06/XX William took $340 from the business bank account to set up a petty cash system, he received a bank receipt 8383.
• 14/06/XX William purchased $6,000 worth of archery equipment at $12 per unit on credit from Magnicata PTY. LTD. with invoice number Y7765.
• 15/06/XX Brisbane archery centre purchased $9,500 worth of archery equipment at $20 per unit on credit (invoice number 2).
• 16/06/XX Perth archery centre purchased $7,000 worth of archery equipment at $20 per unit on credit (invoice number 5).
• 17/06/XX Adelaide archery centre purchased $8,500 worth of archery equipment at $25 per unit on credit (invoice number 6).
• 18/06/XX As sales were going better than anticipated William purchased $10,400 worth of archery equipment credit from Stapleton PTY. LTD. with invoice number G6353 with a purchase price of $10.
• 19/06/XX As some of the archery equipment purchased from Stapleton PTY. LTD. were faulty last time, William decided to diversify his suppliers and so he purchased $5,000 worth of archery equipment from Jing Pty. Ltd. with invoice number I7765 with a purchase price of $10.
• 22/06/XX Bulls Eye paid William a salary of $7,000.
• 23/06/XX Bulls Eye paid a water bill of $600.

On the 30^th of June the stock at end was 4,015 units of Archery equipment with a cost price of $10 = $40,150 and 2,250 units of dart boards with a cost price of $5 = $11,250 for a total of $51,400.

(b)From the Bulls Eye Trial Balance presented below, prepare an interim Statement of Financial Performance (Income Statement), Statement of Financial Performance (Balance Sheet) and Cash Flow Statement. Ensure that you follow the accounting standard on revenues in this question.

4. Prepare a deposit facility for Bulls Eye’s takings on the 5th of June 20XX and the 7th of June 20XX ensuring to distinguish between different transaction source entities i.e. ensure if they are for different accounts that this is identified.

5. On the 30^th of June 20XX the cash at bank account in the ledger of Devondish Pty. Ltd. revealed a balance of $4,776.89 which did not match the bank statement – which was $8,700.56 CR. The accountant investigated the reason for the differences and he found that:

• $2,560.00 was included in the cash receipts journal on June 30 20XX but did not get deposited until July the 4th 20XX.
• Bank charges of $8.72 appeared on the bank statement but was not recorded in the cash payment journal.
• Interest of $79.83 was included on the bank statement but was not included in the cash receipts journal.
• He also discovered that a number of cheques had been written but he could not find them in the bank statement. He is still investigating whether they were properly delivered or whether the suppliers have just not yet banked them.

• Cheque 77765 June 25 20XX Amount $4,500.00
• Cheque 77769 June 26 20XX Amount $678.00
• Cheque 77771 June 28 20XX Amount $1,234.56

Prepare a Bank Reconciliation Statement as at the end of June 20XX and describe how to maintain a petty cash system in line with organisational policy and procedure. (See sample policy and procedures document in Supporting Documents).

Summary of Assessment Requirements

The assessment required students to demonstrate their understanding of fundamental accounting practices, including the preparation and interpretation of key financial documents and reconciliation statements. The task was divided into multiple parts, each designed to assess specific accounting competencies and applications.

Key Requirements and Components

1. Source Documents Analysis

   • Collect and describe an invoice, receipt, and credit card statement to explain their purpose and essential details in business transactions.

2. Account Classification

   • Classify a list of accounts into categories such as current assets, non-current assets, current liabilities, non-current liabilities, equity, income, and expenses.

3. Journal Entries and Ledger Posting

   • Post the provided journal entries for Trish’s Teddy Bears into ledgers.
   • Finalise a trial balance, identify and correct any discrepancies, and prepare management reports reconciling control accounts.

4. Bulls Eye Case Study

   • Record all financial transactions for Bulls Eye, prepare journals, ledgers, and trial balance.
   • Use the trial balance to prepare key financial statements:
     • Income Statement (Statement of Financial Performance)
     • Balance Sheet (Statement of Financial Position)
     • Cash Flow Statement
   • Prepare a deposit facility for specific transaction dates and ensure correct classification of sources.

5. Bank Reconciliation and Petty Cash

   • Prepare a Bank Reconciliation Statement identifying timing and recording differences between cash book and bank statement.
   • Explain how to establish and maintain a petty cash system following organisational policies and procedures.

Academic Mentor’s Step-by-Step Guidance Process

The academic mentor guided the student through a structured, hands-on process to ensure each section of the assessment was addressed comprehensively while reinforcing conceptual understanding.

Step 1: Understanding Source Documents

The mentor began by helping the student identify authentic examples of an invoice, receipt, and credit card statement. Together, they examined:

• Key information each document must include (e.g., date, amount, parties, and transaction details).
• The importance of source documents as evidence for accounting entries.

Step 2: Classifying Accounts

Next, the mentor explained the account classification framework, emphasizing how each account reflects an element of the financial position or performance. The student practiced classifying multiple examples, discussing the rationale behind each category, reinforcing understanding of accounting structure.

Step 3: Journal and Ledger Preparation

For Trish’s Teddy Bears, the mentor demonstrated how to:

• Record each transaction accurately in the general journal using debit and credit rules.
• Post entries systematically into corresponding ledger accounts.
• Prepare and balance the trial balance, checking for any errors or missing entries.
  The mentor encouraged cross-verification to ensure every debit matched a credit, instilling accuracy and analytical thinking.

Step 4: Preparing Financial Statements for Bulls Eye

With the Bulls Eye scenario, the mentor guided the student through a comprehensive accounting cycle:

1. Recording Transactions: Ensuring every business event was documented in journals.
2. Posting to Ledgers: Transferring information to individual accounts.
3. Trial Balance Preparation: Confirming the arithmetic accuracy of accounts.
4. Financial Statements Compilation: Preparing the Income Statement, Balance Sheet, and Cash Flow Statement in accordance with accounting standards.

During this phase, emphasis was placed on the relationship between financial statements, teaching how net profit, assets, and cash flow align to reflect overall performance.

Step 5: Deposit Facility Preparation

The mentor explained how to document and distinguish deposits from different sources on specific dates (5th and 7th June). This reinforced the concept of cash flow tracking and transaction segregation.

Step 6: Bank Reconciliation and Petty Cash System

Finally, the student was guided through the process of reconciling the cash at bank ledger balance with the bank statement.

• The mentor explained how to identify outstanding cheques, unpresented deposits, and unrecorded transactions.
• A Bank Reconciliation Statement was prepared to match the adjusted balances.
  The mentor also discussed establishing and maintaining a petty cash system, explaining policies such as imprest amount, voucher recording, and reimbursement procedures.

Final Outcome and Learning Achievements

By the end of the mentorship process, the student successfully:

• Completed all financial documents and statements accurately.
• Demonstrated a clear understanding of the accounting cycle, from transaction recording to financial reporting.
• Learned the significance of accuracy, verification, and policy compliance in accounting operations.
• Strengthened analytical and problem-solving skills through bank reconciliation and trial balance error detection.
• Gained practical exposure to real-world accounting processes, preparing them for professional accounting tasks.

Learning Objectives Achieved:

• Application of accounting principles to practical scenarios.
• Development of technical accuracy in preparing ledgers and reports.
• Understanding of internal control mechanisms like reconciliation and petty cash.
• Ability to prepare and interpret core financial statements.

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