Student Assessment Tasks: BSBFIM501 Manage Budgets and Financial Plans

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Student Assessment Tasks
BSBFIM501 Manage budgets and financial plans

BSBWRT301 Write simple documents Student Assessment Tasks
Provide answers to all of the questions below:
1. Explain the basic principle of double entry bookkeeping.
Bookkeeping is based on two basic principles. One is that every debit must have an equal credit. The
second, that all accounts must balance, follows from the first. A chronological record of all transactions
is kept in a journal used to track all bookkeeping entries. Every business transaction causes at least two
changes in the financial position of a business concern at the same time – hence, both the changes must
be recorded in the books of accounts. This concept is explained on Analysis of Business Transaction.
page. Otherwise, the books of accounts will remain incomplete and the result ascertained therefore will
be inaccurate. For example, we buy machinery for $100,000. Obviously, it is a business transaction. It
has brought two changes – machinery increases by $100,000 and cash decreases by an equal amount.
While recording this transaction in the books of accounts, both the changes must be recorded.
In accounting language these two changes are termed as “a debit change” and “a credit change” The
detail about these terms is given under the topic account. Thus, we see that for every transaction there
will be two entries – one debit entry and another credit entry. For each debit there will be a
corresponding credit entry of an equal amount. Conversely, for every credit entry there will be a
corresponding debit entry of an equal amount. So, the system under which both the changes in a
transaction are recorded together – one change is debited, while the other change is credited with an
equal amount – is known as double entry system.
2. Describe the principle of cash accounting and one advantage and one disadvantage of this method of
accounting.
The accepted cash accounting definition is an accounting method wherein sales are recorded at the time
of payment and expenses are recorded at the time they are paid. Only when cash actually changes hands
is the payment or expense recorded; this is in contrast to accrual basis accounting, which records credits
when they are earned, rather than received, and debits when they are owed, rather than when they are
actually paid.
Advantage:
 Shows Cash Flow: The cash method most resembles a cash flow statement. It provides an accurate
picture of how much cash your business actually has on-hand.
Disadvantage:
 Single-Entry System: While the simplicity of the single-entry system needed for the cash method is
an advantage, it is also a disadvantage. The accrual method necessitates the use of a double-entry system,
which is based on accounting equations. This system provides far greater control of transaction posting,
and reduces the chance of errors.
3. Describe the principle of accrual accounting and one advantage and one disadvantage of cash
accounting.
Required under the Generally Accepted Accounting Principles (GAAP), accrual basis accounting is an
approach that attempts to simulate the economic reality of the activities of a business, rather than simply
recording transactions as they take place. This method is a given for a large company, but for a small one, it
may not be that beneficial. To determine whether accrual basis accounting is appropriate for your business or
not, it is best to understand the advantages and disadvantages that come with it.
Advantage :
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It allows for easy planning: One process that will become easier with accrual basis accounting is
planning, especially that it allows you to account for all of your expenses and revenue within the right
period. This entails that you will be able to create budgets for your expenses and predict sales, which is
essential to inventories, staffing and other areas of operation. Aside from easier planning, this
accounting method can help with reducing your tax burden by issuing invoices at the start and the end
of the year.
Disadvantage:
Restrictions: According to the IRS, you cannot use the cash method if your business maintains
inventory, is a corporation, or has gross receipts in excess of five million dollars per year. These are the
general rules, but there are exceptions — so if you feel that your business falls into one of these
categories, you should consult a professional.
4. Explain the two accounting principles on which the calculation and reporting of deprecation is
based.
The calculation and reporting of depreciation is based upon two accounting principles:
 Cost principle: This principle requires that the Depreciation Expense reported on the income
statement, and the asset amount that is reported on the balance sheet, should be based on the historical
(original) cost of the asset. (The amounts should not be based on the cost to replace the asset, or on the
current market value of the asset, etc.)
 Matching principle: This principle requires that the asset’s cost be allocated to Depreciation
Expense over the life of the asset. In effect the cost of the asset is divided up with some of the cost being
reported on each of the income statements issued during the life of the asset. By assigning a portion of the
asset’s cost to various income statements, the accountant is matching a portion of the asset’s cost with
each period in which the asset is used. Hopefully this also means that the asset’s cost is being matched
with the revenues earned by using the asset.
5. Identify and explain three key features of A New Tax System (GST) Act 1999.
1. Taxes covered: Most of the important indirect taxes of the centre and states are integrated under the
GST. The most important tax of the central government (in terms of tax revenue collection) -the Central
Value Added Tax (or Union Excise Duty), Additional Customs Duty (CVD), Special Additional Duty
of Customs (SAD), Central Sales Tax (levied by the Centre and collected by the States, the fastest
growing tax revenue of the centre – Service Tax, the most important tax revenue of the states – the state
VAT (Sales tax) are now merged into a single tax under the Goods and Service Tax.
There are three important indirect taxes for the centre – the union excise duties, service tax and customs
duties. Of these, the central excise duties and service taxes are brought under the GST. Customs duties
as a tax on trade were not merged with the GST. States have two important indirect taxes – sales tax and
state excise duties. Of these two, only the sales tax is merged with the GST. Along with these four big
taxes of the centre and states, several other low revenue incurring taxes are also brought under the GST.
A. The following taxes levied and collected by the Centre are merged with the GST:
o Union Excise duties
o Services tax

o Duties of Excise (Medicinal and Toilet Preparations)
o Additional Duties of Excise (Textiles and Textile Products)
o Additional Duties of Excise (Goods of Special Importance)
o Additional Duties of Customs (commonly known as CVD)
o Special Additional Duty of Customs (SAD)
o Cesses and surcharges
B. State taxes that are subsumed under the GST are:
o State VAT
o Central Sales Tax
o Entertainment Tax (not levied by the local bodies)
o Entry Tax (other than those in lieu of octroi)
o Luxury Tax
o Taxes on advertisements
o Taxes on lotteries, betting and gambling
o State cesses and surcharges insofar as they relate to supply of goods or services.
Notable exclusions from GST: Some notable taxes are not covered under GST and these includes: levies
on petroleum products, tax on alcoholic products, electricity duties/taxes, stamp duties on immovable
properties and vehicle taxes. The achievement of GST reforms is the unification of the numerous taxes
into the single GST. Here, both the centre and states agreed to sacrifice their fiscal right or power to
give way for the common tax.
2. Unified tax regime: The GST integrates Goods and Service Taxes into one unified tax regime.
Previously, the goods and services were imposed and administered differently.
3. The four-tier rate structure: the GST proposes a four-tier rate structure. The tax slabs are fixed
at 5%, 12%, 18% and 28% besides the 0% tax on essentials. Gold is taxed at 3%. The centre has strictly
demanded and got an additional cess on demerit luxury goods that comes under the high 28% tax.
Essential commodities like food items are exempted from taxes under GST. Other consumer goods
which are common items will be taxed at 5%.4. The new GST seems to have two standard rates – 12%
and 18%. GST rate structure for the goods and services are fixed by considering different factors
including luxury/necessity nature.

6. Identify and then explain the four main taxation and superannuation obligations for a business.
Briefly discuss each obligation.
When hiring staff, businesses have more obligations than just paying their salary. According to the
ATO, the business obligations are:
Withhold tax (PAYG withholding) from their wages and report and pay the withheld amounts to us
Pay super, at least quarterly, for eligible employees.
Report and pay fringe benefits tax (FBT) if you provide your employee with fringe benefits.
In case of contractors:
They generally look after their own tax obligations, so you don't have to withhold from payments to them
unless they don't quote their ABN to you, or you have a voluntary agreement with them to withhold tax
from their payments
You may still have to pay super for individual contractors if the contract is principally for their labour
You don't have FBT obligation
7. According to GST legislation, list four items that do not attract GST.
 Water, Sewerage, and drainage
 Exports
 Farmland
 Sales through duty-free shops
8. Explain the process by which a business reports GST to the Australian tax office.
The GST reporting method you use is based on your business’s GST turnover and other reporting
requirements:
1. -If your GST turnover is less than $10 million
2. -you generally report GST using the default Simpler BAS reporting method
3. -if your aggregated turnover is greater than $10 million, or you make input taxed supplies as
your main business or enterprise activity, you have the option to use either Simpler BAS or the
GST full reporting method.

4. -if you pay GST instalments quarterly and report annually, you may use the GST instalment
method.
5. On your annual GST return, you must report the following GST information:
6. -G1 Total sales
7. -1A GST on sales
8. -1B GST on purchases
9. -1H GST instalment amounts reported in your quarterly instalment notices for the period
9. What is the penalty rate to be applied if a supplier does not provide an ABN?
When a payer makes payments to suppliers for goods or services to the business, those suppliers generally
need to quote an Australian business number (ABN). They can quote their ABN on an invoice, or some other
document that relates to the goods and services they provide. If a supplier does not provide its ABN, the
payer may need to withhold an amount from the payment for that supply – this is referred to as ‘no ABN
withholding’. Certain suppliers are not required to quote an ABN to a payer. In these cases, the suppliers can
use the form to justify the payer not withholding from the payment to the supplier.
10. A non-profit organisation needs to register for GST after it has a turnover of more than how much?
Your GST turnover meets the registration turnover threshold if your current GST turnover or your projected
GST turnover threshold is at or above the turnover threshold. Your current GST turnover is the value of all
the supplies (sales) you make during the current month and the previous 11 months. Your projected GST
turnover is the value of all of your sales you make during the current month and the next 11 months.
Both the current and projected GST turnover is based on your gross income, excluding all of the following:
1. sales that are input taxed sales
2. sales not connected with an enterprise that you carry on
3. sales that are not made for consideration (unless the sales made to associates).
4. A gift made to you is not considered payment for a sale and is not subject to GST. The value of a
gift is also excluded when calculating your GST turnover.
5. If you are not registered for GST, you will need to calculate your current GST turnover and your
projected GST turnover each month to identify if you are required to be registered for GST
purposes, i.e. when either of these turnovers are $150,000 or more.
6. Generally, you must register for GST within 21 days if either GST turnover meets or exceeds the
GST turnover threshold of $150,000.
11. List the key information that must be included on a tax invoice for sales of $1,000 or more.

Tax invoices for sales of $1,000 or more need to show the buyer’s identity or ABN.
If your tax invoices meet the requirements for sales of $1,000 or more, you can also use them for sales of
lesser amounts.
 that the document is intended to be a tax invoice

 the seller’s identity
 the seller’s Australian business number (ABN)
 the date the invoice was issued
 a brief description of the items sold, including the quantity (if applicable) and the price
 the GST amount (if any) payable – this can be shown separately or, if the GST amount is exactly
one-eleventh of the total price, such as a statement which says ‘ Total price includes GST’
 The extent to which each sale on the invoice is a taxable sale (that is, the extent to which each sale
includes GST).
12. Identify and explain three types of financial statements and their purpose.
Financial statement provide a picture of the performance, financial position, and cash flows of a
business. These documents are used by the investment community, lenders, creditors, and management
to evaluate an entity. There are four main types of financial statements, which are as follows:
 Income statement: This report reveals the financial performance of an organization for the
entire reporting period. It begins with sales, and then subtracts out all expenses incurred during
the period to arrive at a net profit or loss. An earning per share figure may also be added if the
financial statements are being issued by a publicly-held company. This is usually considered
the most important financial statement, since it describes performance.
 Balance sheet: This report shows the financial position of a business as of the report date (so it
covers a specific point in time). The information is aggregated into the general classifications
of assets, liabilities, and equity. Line items within the asset and liability classification are
presented in their order of liquidity, so that the most liquid items are stated first. This is a key
document, and so is included in most issuances of the financial statements.
 Statement of cash flows: This report reveals the cash inflows and outflows experienced by an
organization during the reporting period. These cash flows are broken down into three
classifications, which are operating activities, investing activities, and financing activities. This
document can be difficult to assemble, and so is more commonly issued only to outside parties.
13. Describe the type of entity that is required to have financial reports audited.
Certain types of entities must have their financial reports audited by a registered company auditor.
A company (other than a small proprietary company), registered scheme (managed investment scheme)
or disclosing entity (a body that holds enhanced disclosure securities) must have its annual financial
report audited and obtain an auditor’s report. However a proprietary company may be exempt from
having its financial report audited (see Regulatory Guide 115 and CO 98/1417 Audit Relief for
Proprietary Companies) or may otherwise be eligible for audit relief. A disclosing entity must have its
interim financial report reviewed and obtain a registered company auditor’s review report.
14. Explain the purpose of a financial audit and auditor’s report.

Audit report
The purpose of an audit is for an independent third party to examine the financial statement of an entity. This
examination is an objective evaluation of the statements, which results in an audit opinion regarding whether
the statements have been presented fairly and in accordance with the applicable accounting framework (such
as GAAP or IFRS). This opinion greatly enhances the credibility of the financial statements with users, such
as lenders, creditors, and investors. Based on this opinion, users of the financial statements are more likely to
provide credit and funding to a business, possibly resulting in a reduced cost of capital for the entity.
Auditor’s report
An auditor’s report is a written letter attached to a company’s financial statements that express its opinion on
a company’s compliance with standard accounting practices. The auditor’s report is required to be filed with
a public company’s financial statements when reporting earnings to the Securities and Exchange Commission
(SEC). However, an auditor’s report is not an evaluation of whether a company is a good investment. Also,
the audit report is not an analysis of the company’s earnings performance for the period. Instead, the report is
merely a measure of the reliability of the financial statements.
15. Describe why companies may choose to develop budgets.

Budgeting is the basis for all business success. It helps with both planning and control of the finances of the
business. If there is no control over spending, planning is futile and if there is no planning there are no
business objectives to achieve.
A budget is a plan to:
 control the finances of the business

 ensure that the business can fund its current commitments
 enable the business to meet it objectives and make confident financial decisions; and
 Make sure that the business has money for future projects.
The benefits of budgeting should never be underestimated when running a business:
 budgeting estimates revenue, plans expenditure and restricts any spending that is not part of the plan
 budgeting ensures that money is allocated to those things that support the strategic objectives of the
business
 a well communicated budget helps everyone understand the priorities of the business
 the process of creating a budget provides opportunities to involve staff, resulting in them sharing the
organization’s vision; and
 Engaging the team in reviewing and comparing the budget with actual can provide information that
highlights the strengths and weaknesses of the business.
If you’re running your business without a proper budget, you may find you’re actually just running around in
circles and not meeting your long-term goals. By taking the time now to set a budget, you will free up time in
the future and give yourself the best chance of achieving the rewards you want for your hard work.
16. Explain the main steps in the budgeting process.
Are economic troubles causing you to consider your personal financial situation? You may be worried about
losing your job or how much debt you have. Avoid a potential personal financial crisis; get back to basics
with a budget you can stick to. Here’s how to start:

Step 1: Set Realistic Goals: - Goals for your money will help you make smart spending choices. Ask
yourself: What do I want my finances to look like in one year? Decide what’s important to you and start
there.
Step 2: Identify your income and expenses: - You probably know how much you earn each month –
but do you also know where it all goes? Find out by tracking what you’re spending. Spend as you
normally would, but for a few weeks, jot down every cent you spend. It’s easy and you might be
amazed by what you find out.
Step 3: Separate Needs and Wants: - Ask yourself: Do I want this or do I need it? Will spending this
money get me closer to my financial goals or further away? Can I live without it? Set clear priorities for
yourself and the decisions become easier to make.
Step 4: Design Your Budget: - Make sure that you are not spending more than you make. Balance
your budget to accommodate everything you need to pay for. One easy way to do this is with our free,
easy-to-use budget calculator spreadsheet and worksheet that’s built for Canadians.
Step 5: Put Your Plan into Action: - Match your spending to when you receive your income. Decide
ahead of time what you’ll use each pay cheque for. Ask yourself: Have I allocated money for my
necessities (housing, food, utilities, transportation, etc.)? Have I put money aside for my debt payments,
unexpected expenses, savings and the fun stuff? This will protect you from going into debt further
because you won’t rely on credit to pay for your living expenses.
Step 6:- Seasonal Expenses:- You know that things will “just come up” – school expenses, new shoes
or an annual membership. Set money aside to pay for these expenses so you can afford them without
going into debt.
17.

17.List 5 ways to improve cash inflow and give examples.

1 – Regular financial reviews
Having detailed and up-to-date knowledge of your financial performance is critical. If financial management
isn’t your strength, engage a strong finance team to advise you, and ensure they maintain a steady focus on
cash flow and profitability rather than growth rate.
Your schedule should include a monthly analysis of your financial statements, looking not just at your
current financial status, especially your free cash flow, but also at past performance (your trends and
trajectory, particularly your profitability ratios and return on capital employed (ROCE)) and at forecasts for
the immediate and longer-term future.
Regularly drill down and examine the financial performance of each of your product or service lines and
sales channels, as well as your stock levels, debtors and assets.
This information will help you to make informed strategic decisions about your operations, and enable you to
identify potential issues in time to take corrective action to protect your cash flow. For example:
 Organizing short-term finance to cover working capital shortages

 Matching the timing of expenditure to income if you have fluctuating income (by delaying
discretionary purchases or negotiating with creditors)
 Adjusting your stock policy if you’re tying up cash in excess inventory (be wary, for example, of
buying extra stock to take advantage of vendor discounts or rebates, as savings can quickly be lost to
storage costs)
 Tightening up your credit terms or collection policies if too much cash is tied up in bad debts, and
imposing purchase restrictions until debts are cleared, or even ending relationships with clients that have a
poor payment record.

2 – Regular strategic reviews
Unfortunately, for many businesses, a strategic plan is something that’s created once then either forgotten or
followed rigidly without review. As a result, precious cash gets tied up in obsolete stock, irrelevant marketing
campaigns, bad debts and unnecessary assets.
To stay competitive and keep your cash flowing freely you need to regularly re-examine every aspect of your
business to make sure that your:
 Product lines or services still meet your customers’ needs

 Sales channels are aligned with your customers’ preferences
 Marketing initiatives are successfully attracting new customers
 Technology and equipment are appropriate for your needs (it can be tricky to find the balance
between staying efficiently up-to-date and not wasting cash on unnecessary upgrades).
Being willing to change direction and redefine your strategy – including making tough decisions on the
future of product lines, sales channels, marketing strategies and assets that are draining your cash flow – is
critical to long-term success.
3 – Cautious growth
One of the main reason’s companies run is that they grow too fast.
The risk is that in order to meet the demands of new customers or clients, you’ll have to invest heavily in
infrastructure, materials or labor. That up-front investment can wipe out your working capital reserves and
leave you dangerously exposed until you receive the funds from the extra sales.
If you don’t have the cash to meet your financial obligations in the meantime, your business may not survive
to reap the benefits of that sales growth.

Focus instead on steady, cautious growth that won’t exhaust your cash reserves or stretch your resources to
the point where your service levels (and reputation) will suffer. And be very wary of funding growth with
borrowings, especially when interest rates are rising.
4 – Prudent borrowing
Loan repayments can be a major drain on your cash reserves, and unless you’ve locked in fixed interest rates,
you’re always at risk from rate increases that can play havoc with your forecasts and quickly deplete your
cash reserves.
The most important measure you can take to minimize your cost of borrowing is to make sure the term of
your loans matches your business needs:
 Never use short-term facilities like an overdraft or credit card to finance the purchase of long-term
assets. Not only will you pay higher interest rates and charges, you also run the serious risk of having the
facility withdrawn before the asset is paid off – leaving you with an instant cash flow crisis.
 Avoid using long-term funding to boost your working capital. Many long-term loans have penalties
for early repayment, which can leave you locked into paying for finance you no longer need. Instead, opt
for at-call finance to smooth out fluctuations in your cash flow, so that you’ll only pay interest on funds
when you need to draw on the facility.
 Shop around for business finance, especially if you need a fast cash injection – the ‘fintech’
alternative loan market is booming in Australia, offering a competitive source of funding for businesses of
all sizes. Be aware, though, that alternative lenders aren’t regulated in the same way that Australian banks
are, and some may seek to impose restrictive loan conditions in order to reduce their risk.
5 – Putting your cash to work

While most cash flow improvement measures focus on finding ways to increase cash reserves, it’s actually
possible to have cash too much, earning negligible interest and leaving you with poor ROCE.
If you do happen to have large cash reserves – more than you need to meet your working capital needs, fund
your loan obligations and cover an extended downturn in sales – you may want to consider reinvesting those
funds in your business.
One way you can use excess funds to improve cash flow is to repay loans (if you can do so without incurring
penalties) since the interest you earn on your savings will never match the amount you’re paying on your
borrowings.
18. Explain the use of electronic spreadsheets in developing budgets and give two of their key features.
An electronic spreadsheet can be used to automatically perform numerical calculations. Spreadsheet

programs are usually set up in the form of a table with rows and columns. Each row and column
intersect to form a cell in which data may be stored. These data may be a text label, a number, or a
formula that combines data from other cells. In security management spreadsheets are of immense
value in preparing and tracking budgets, calculating expenses, estimating job costs, and conducting
other numerical analyses. Data entries can be easily changed to analyse their effect. Another useful
feature of most spreadsheet programs is the ability to graphically display results. Different types of
graphs and charts can be used to visually display fluctuations and trends in the relationships between
different variables within a spreadsheet. Spreadsheets are also a useful tool to keep track of expense and
income.
1. There are many features of an electronic spread sheet that makes it really significant.
2. *The sheet helps to organize and assess different types of information with ease.
3. *The sheet can be used to generate various kinds of reports for communication within
departments.

4. *The sheet is a vital tool for data management activities like data entry, data sorting, and data
extraction.
5. *The sheet can calculate mathematical formulae based on content entered in other cells.
6. *The sheet offers functionality, portability, and flexible customization to a great extent.
7. *The sheet enhances productivity by reducing time spent on everyday accounting task
19. Explain three key principles relating to the management of a chart of accounts.
Principle No.1
Financial Statements should present information simply.
This is especially important when those who must read the financial statements do not have financial
management training (as in a sporting club committee)
Second Principle.
There is a delicate balance between having too much information in the financial reports and too little. Either
way, the value of the financial reports is diminished to the manager or management committee.
The chart of accounts needs to be set up so as to provide the right amount of detail in the financial reports.
Every business (sport and recreation organization) will be different, and therefore there is no magic formula
for a chart of accounts.
As a general rule though err on the side of using a simpler chart of accounts. Try to make it easy for the
manager (management committee) to ready the financial reports.
Principle No.2
Be cautious about adding extra accounts

to the chart of accounts.
Sometimes it is necessary to add extra accounts

but more usually it's not!
Third Principle. .
In setting up, or redesigning a chart of accounts for a business, you need to think about what information you
really need.
For example, if you are running a football club which generates income from football programs and the bar
and gaming machines in the clubhouse, the management committee are most likely to need information that
tells them:

1. How much profit is being generated by the bar and gaming machine operations in the clubhouse,
and thereby how much money can be spent on football!
2. Whether the football side of the business is running at a profit or a loss
Principle No.3
Think about the key information you will need to know how well the business is going..
Streamline your chart of accounts so that you get key information you need
Bad example of a Chart of Accounts
Let's look at a really bad example! This is a Chart of Accounts that went really wrong because the
bookkeeper did not understand the principles.
Before you look at the example, you need to know what you are looking at! The document is a real-life
profit & Loss Statement produced for a club. Unfortunately, the statement is five pages long and a
complete mess as a result of not knowing how to set up and work with a Chart of Accounts.
Some of the things you might look for in this bad example are:
There are 35 listed expenditure categories for soccer. Some of the expenditures are listed in
1 the Cost of Sales section and some listed in the Overheads section without any satisfactory
reason
Ideally, the manager / management committee needs to be able to compare the revenue and
costs of all (overall) soccer operations. Do the soccer operations run at a profit or a loss, and
by how much?
Having a large number of expenditure categories split between two sections (Cost of
Sales and Overheads sections) does not help in this regard.
The profit and loss statement needs to be simplified very considerably.
2 There is duplication (and over complication) of categories:
 "4 A side" is listed three times in the cost of sales section. The operator of the
accounting system has created three accounts for same thing.
 "Player’s travel" and "players traveling" in the cost of sales section.
 "Insurance" and "Public liability" (a form of insurance) in the expenses section
 "Tony's expenses" in the cost of sales section and "Tony's mobile" in
the expenses section (why itemize mobile expenses separately from other
expenses?)
 "Trophies" and "Presentation Expenses" in the Cost of Sales section. A category
such as "Trophies and Presentations" will suffice.
 "Fuel and Diesel", "Rego for Car", and "Car Maintenance" in the expenses section.
A category such as "Motor Vehicle" expenses will suffice.
 "Cleaning" and "Cleaning Material" in the expenses section. Presumably,
"Cleaning" is the wages component and "Cleaning Material" is the cost of

materials. If the Management Committee need to find out how What value is
there in differentiating between "club expense" and "club maintenance"? What is
"club expense anyway?
20. Explain the purpose of a profit and loss statement and give two of its key features.
The P&L statement answers a very specific question: Is the company profitable? While accountants use the
P&L statement to help gauge the accuracy of financial transactions and investors use the P&L statement to
judge a company’s health, the company itself can review its own statement for productive purposes. Closely
monitoring financial statements highlights where revenue is strong and where expenses are incurred
efficiently, and the opposite is true as well. For example, a company might notice increasing sales but
decreasing profits and search for new solutions to reduce costs of operation.
 Interest Expense
 Taxes
 Net Income
Interest expense is one of the core expenses found in the income statement. A company must finance its
assets either through debt or equity. With the former, the company will necessarily incur an expense related
to the cost of borrowing. Understanding a company’s interest expense helps to understand its capital structure
and financial performance.
Tax accounting is one of the largest subsets or specializations within the field of accounting. In terms of
corporate finance, there are several objectives when it comes to accounting for income taxes and optimizing a
company’s valuation.
Net income is the amount of accounting profit a company has left over after paying off all its expenses. Net
income is found by taking sales revenue and subtracting COGS, SG&A, depreciation, and
amortization, interest expense, taxes and any other expenses.
Assessment Task 1 Checklist
Student’s name:
Did the student provide a Completed
sufficient and clear answer that successfully? Comments
addresses the suggested answer
Yes No
for the following?

Question 1
Question 2
Question 3
Question 4
Question 5
Question 6
Question 7
Question 8
Question 9
Question 10
Question 11
Question 12
Question 13
Question 14
Question 15
Question 16
Question 17
Question 18
Question 19
Question 20
Task outcome:  Satisfactory  Not satisfactory
Assessor signature:
Assessor name:
Date:

Assessment Task 2: Budget planning project
Develop a draft marketing budget.
King Edward VII College
Master Marketing Budget (monthly)
2016 - 2017 FY Projected expenses

Marketing Activity July August September October November December Janu
Redesign web site $1,500
Incentive scheme $200 $200 $200 $200 $200 $200 $20
Radio advertising $1,500 $1,500 $1,500
VCE Careers expo 2020 $3,3
Promptional brochure $1,500
Community profile
Contigency amount
Total $200 $1,700 $1,700 $1,700 $200 $3,200 $5,0
2016 - 2017 FY Actual Expenses

Marketing Activity July August September October November December Janu
Web site redesign $2,000
Incentive scheme $200 $200 $200 $200 $200 $200 $20
Education Expo2016 $3,500
Promotional brochure $1,500
Community sponsorship
Radio advertising
Total $200 $200 $200 $200 $1,700 $5,700 $20

January February March April May June 2016/17 Total
$5,000
$200 $200 $200 $200 $200 $200 $2,400
$1,500 $2,000 $2,000 $10,000
$3,300 $3,300
$1,500
$2,000 $2,000
$800 $800
$5,000 $1,700 $2,200 $2,200 $2,200 $3,000 $25,000


January February March April May June 2016/17 Total
$2,000 $3,000 $7,000
$200 $200 $200 $200 $200 $200 $2,400
$3,500
$1,500
$2,000 $2,000
$2,000 $2,000 $2,000 $2,000 $2,000 $10,000
$200 $6,200 $2,200 $5,200 $2,200 $2,200 $26,400
1. Send an email to the CEO (your assessor).
Hi mam,
Here is the marketing budget of King Edward college on monthly basis. Can you please check my
budget and can I have your appointment to discuss about the budget. It would really appreciate and
grateful if you like my budget,
Thank you
Regards,
Lovepreet
Finance Authorisation Policy and Procedures
Purpose of the Policy
All money exchanges as verified in this arrangement are to be approved by the prominent approved
individual preceding the exchange being attempted. This approach is to be perused related to other
explicit money strategies were pertinent.
Systems
Preceding any of the accompanying money exchanges being embraced, the approving individual noted
should approve the exchange.

Where extra arrangement is noticed, this approach should likewise be clung to when undertaking the
money exchange.
Petty cash Policy
Insignificant money ought to be utilized to pay for private company expenses up to $100 where
instalments through creditor liabilities or charge card are not defended or suitable.
Procedures
Giving Petty Cash
Petty cash vouchers should be finished before any money is taken from the frivolous money glide.
Simply up to $100 can be dispensed at any one time. All trivial money vouchers gave should be
endorsed by a Senior Manager. When the frivolous money is spent, a receipt or receipt ought to be
connected to the voucher and got back to insignificant money with any equilibrium of monies unspent
All finished vouchers should have the accompanying subtleties included:
• Issue date of voucher;
• Name of individual who gave the voucher;
• Number of monies dispensed;
• Details of cost;
• Invoice or receipt
• Signature of endorsement individual,
Reconciling Petty Cash
Frivolous money drift is to be accommodated essentially month to month. This is the duty of {insert
applicable occupation title here} All insignificant money use should be gone into the monetary
framework once the unimportant money has been accommodated. The equilibrium of monies and
vouchers should approach the insignificant money coast sum before repayment can be made.
Repayment of frivolous money will be approved by a Senior Manager.
Utilization of Business Credit Card Policy
This approach gives rules to the issue and utilization of business Mastercard’s.

Procedures
A representative might be given a Visa once the Credit Card Authorisation Form has been finished. The
business Visa must be utilized for movement, approved amusement and acquisition of little worth costs or
gear up to the worth of $500. No loans are to be assumed utilizing the business acknowledgment card except
if approved by the Finance Manager. Where a business Visa is lost or taken, the proprietor of this card is to
tell the Finance Manager, who is liable for advising the responsible office and guaranteeing the card is
dropped.
The business Mastercard isn't to be utilized for individual costs. All holders of business Visas are needed to
accommodate the month-to-month financial record to the cost structure, join all receipts for instalments made
on the Mastercard and have the cost explanation approved by the Finance Manager.
Upon consummation and authorisation of the month-to-month cost articulation, these reports are to be sent to
the Finance Manager for instalment of the financial record. All business charge cards are to be gotten back to
the business when the individual is mentioned to by the Finance Manager or where they are presently not a
representative of the business.
New Supplier Policy
Purpose
All new providers to the business should be surveyed and acknowledged as per this strategy to guarantee that
the provider administration is lined up with the business destinations.
Procedures
Picking a New Supplier
Another provider should give our business quality items, incredible assistance, cutthroat evaluating and
effective conveyance. The accompanying data table should be finished preceding consenting to
administrations
*Supplier Selection Background Information
*Business Name of Supplier:
*Area of Supplier:
*Items/Services given by provider: (Attach a rundown if vital)
*Name of entrepreneur/salesperson:
*For how long has the provider been exchanging?
Appointment of Supplier

The arrangement of another provider will be approved by the Finance Manager. All pertinent subtleties of the
provider will be gone into the monetary framework by Administration Assistance whenever endorsement is
acquired from the Finance Manager. The Finance Manager will survey data went into the monetary
framework and freely confirm the ledger or other instalment subtleties of the provider to guarantee
instalments made are to the right provider
Supplier Payment Terms
All buys from providers should be upheld by a buy request. Instalment expressions for all providers should
be looked into by {Insert important occupation title here} each {Insert timing of survey here, suggested
essentially once a year}. Following this survey every provider should be drawn nearer to look for further
developed instalment terms by Finance Manager.
All provider instalment terms should be at least 30 days.
Any variety to the above should be approved by Finance Manager.
All provider instalments are to be evaluated once a quarter to guarantee that instalment terms are clung to.
For instalments made to any providers before or later than the concurred terms. The Finance Manager will set
up a report that subtleties the reasons why instalment terms have not been clung to.
Send an email to the CEO (your assessor).
Hi mam,
Here is the marketing budget and all the information which we need. Can you please check my budget
and can I have your appointment to discuss about the budget. It would really appreciate and grateful if
you like my budget,
Thank you
Regards,
Lovepreet

Student’s name:
Completed
successfully? Comments
Did the student: Yes No
Access budget information from the case

study and use this to develop the marketing
budget?
In the meeting, discuss and confirm the

marketing budget with the CEO?
Negotiate changes to the budget based on

presenting coherent arguments for the use of
television advertising?
Allow for contingencies within the budget?
During the meeting to discuss budgets and

financial policies and procedures,
demonstrate effective communication skills
including:
 Speaking clearly and concisely
 Using non-verbal communication to
assist with understanding
 Asking questions to identify required
information
 Responding to questions as required
 Using active listening techniques to
confirm understanding
Discuss the budget with the team?
Use templates to record all information

according to company procedures?
Provide information to team members to

follow required financial procedures?

Assessor signature:
Assessor name:
Date:

Assessment Task 3: Monitor and control finances project
King Edward VII College

Marketing budget report
Projected budget and actual budget.
This year the spending that have been assigned is $25,000, which is generally 10% of salary. Your spending
limit excludes pay and wages of staff, which is spoken to through another cost centre. For the foreseen that
total entirely for what had set is $24,200. In any case, the genuine expenses are having over spending plan
around $2,200. That genuine cost hard and fast is $26,400. So, it may need to assemble it at next time.
Overall level of variance, as well as variance for individual marketing activities
This year the spending that have been doled out is $25,000, which is around 10% of pay. Your cash related
purpose of imprisonment rejects pays rates and wages of staff, which is addressed through another cost centre
premium. For the anticipated that all out sum for what had set is $24,200. Regardless, the true costs are
having over spending plan around $2,200
Reasons for overruns
 Under financing. One of the main reasons that cause budget overrun is under financing. ...
 Unfeasible Cost Estimates. Cost estimation is an important process in a project and one common
reason for budget overrun. ...
 Underestimating the Project Complexity. Large projects are usually at risk of overrunning its budget
because the larger the project, the bigger the complications that may arise during its execution.
 Prolonged Project Schedule. If the project is on schedule, that does not necessarily mean that the
project budget is also being met.
 Lack of Backup Plan. If you do not have a backup plan for any problem that might arise, then even
the smallest delay in the schedule will cause an overrun.
Proposed solutions for following year’s budget
Step 1: Build a Gantt chart

Gantt charts are loved and hated. It is undeniable; however, that they are the clearest overview you can get of
a project in its entirety.
If you’re trying to convince the evaluator, then plot every work package and task on a Gantt chart and
provide him or her with a clear picture of what will happen when. This will also tell them that you have
thought that part out carefully.
The Gantt chart is one of the documents every project need — but for now, at this point in the work, you
won’t need to complete every one of those in detail.
Step 2: Add Person-Days per Company

This is a core point. In order to estimate costs well, you first need to estimate the amount of work you need to
put into each activity you have planned.
Not only that: you need to estimate who will do the work. I don’t mean who personally (name and surname),
I mean what type of person or role will work on each task.

Is it developers? Is it marketers? Is it researchers? Each one has a different hourly rate and a different pace of
work.
Plan your person-days accordingly. If you are part of a consortium, remember to separate these estimates per
company, as you will also need to present the budget broken down per company. In the example below,
Almira has been allocated 656 person-days for work package 1.
There are more examples in Eduardo’s book, Writing Proposals: A Handbook of What Makes your Project
Right for Funding
Step 3: Estimate Lab our Costs

Once you have the duration and the person-days or hours for each project task, it’s time to write down how
much their work would cost. To do this, you simply need to multiply the hourly or daily rate of each category
of personnel in each company by the number of days/hours they will be working.
If you want, you can also work with a weighted average, your call. As for the daily rate, if you are not
familiar on how to calculate it, take a look at the end of the article as I’ve included a brief how-to for you.In
the example below, Almira’s 656 person-days have been broken down into four staff categories with four
daily rates.
Multiplying daily rates by person days per category and summing the four totals gives the budget allocation
for Almira for WP1 (540,25*122 + 489*255 + 262*255 + 125*24 = 260.415,50).
Step 4: Add Subcontracting and Travel Costs

Subcontracting and travel costs are the two other categories of costs you need to take care of. You can add a
third category “other” to use for whatever costs are still left out (e.g., purchasing specific equipment). For
Travel Costs, multiply the number of travellers by the cost of a return ticket to their destination. Slightly
overestimating the costs is a good idea. After you have that, add a daily allowance for each traveller.
If you don’t have estimates for daily allowances you can refer to the official ones used for the OECD staff
(available here). Remember to note what work package each travel is grouped under. For subcontracting you
merely need to indicate who you will hire, in what work package and for what.
Step 5: Bring It All Together

As mentioned in the beginning, presenting everything in a clear and simple way is the number one
requirement of a good budget.You’re combining resource management, schedule management and project
financial management (important project management Knowledge Areas) to prepare a package for your
proposal that no one will be able to resist!
So how does this budget information look in your proposal? Below is an example of how it all comes
together. This is taken from Edoardo’s book: Writing Proposals: a handbook of what makes your project
right for funding. All company names are made up.
Example of Proposal Budget

Here’s an example of a proposal budget.
Our Consortium proposes a total price of € 2,223,471,26 (19% VAT excluded) for this project, distributed as
follows:
 Staff Costs: € 897.231,26
 Subcontracts: € 260,00

 Travel Costs: € 980,00
 Other costs: € 000,00
The tables below provide a further breakdown of the budget. (WP stands for ‘work package’ in the tables
below.)
Overview
The table below shows the overview. This is what you’d put at the beginning of your project proposal
document to show the overall costs at a glance.
Staff Costs
Here’s the worked example table of the staff costs. For each work package (which would be detailed
elsewhere in the proposal documentation), we have said which individual and company would be incurring
what cost.
Then the staff costs per work package are totalled across the line, and then the total per work package is
summed at the bottom.
Remember, this table is just staff costs, not the overall cost of the work package.

Subcontracting
We also need to include detail of subcontracting costs, if your proposal relies on other parties to complete the
work. In the example below, the table shows the partner, the work package they will be involved in, the total
cost for that element and then what the cost is for.
Subcontracting costs include things like external consultancy fees, survey agency payments, any fees related
to contractors using special materials, a creative team and so on.
Travel Budget
All partners except Leri will be sending 2 people to each meeting. 9 meetings have been planned, totalling 18
travellers per partner (9 for Lerei).
We can show the travel budget in another table. The example travel budget for this project is shown in the
table below. It sets out the partner, the work package where the travel costs will be incurred, the cost per

traveller and the number of people who will be traveling at that time. There is also the total cost and the
description.
Travel costs are generally people going to meetings. The more you can demonstrate your expertise in running
a virtual team, the lower you can make these costs (although they may be offset by some extra tech or
licenses required for remote working software).
Other Costs
The listed cost of €25,000 is for the purchase of a specific accounting software package for WP1.
Make sure you record any other costs that don’t fit neatly into the categories above. All these tables are going
to be in the back of your proposal documentation as an appendix, so there should be plenty of space for you
to include everything you need. This is also important for transparency.
Timing
The picture below outlines the timing of the project throughout the 41 planned weeks as well as the
deliverables throughout the project.

This is a worked example of a Gantt chart for this example project. Your timings are obviously going to be
different, but you can see that the tasks are listed per work package with a number of weeks duration clearly
marked.
The Gantt chart is relatively high level and for the purposes of communication rather than for project tracking
and monitoring.
Worked Example: Hourly Rate Calculation

Your hourly rate must be related to the actual working hours you have in a year (this is based on The
European Commission’s Horizon 2020 Methodology). Follow the steps in the image below to get started.
In summary, you work out the working days per year, then take off annual holidays, bank holidays and an
estimate for sickness absence and other days out of the office e.g., training. That gives you the number of
working days per year your resource will be available. Then work out the working hours per day. Typically,
this is 8 hours per day. With the number of hours per day (8) and the number of working days (around 210)
then you can calculate the hours worked per year.
Hourly rate calculation

Once that is taken care of, it is time to estimate the hourly rate. To do this you need to have the following
information for each person:
 Employee’s salary
 Employer’s social security charges per year per employee
 Other Direct costs per employee (Lunch tickets, car, telephone…)
 Overhead (if any)

Hi mam,
Here is the projected budget and actual budget of King Edward college and all the information which we
need. Can you please check my budget and can you give guidelines for betterment of this project. It would
really appreciate and grateful if you like my budget,
Thank you
Regards,
Lovepreet
Student’s name:
Completed
Interpret and analyse information for budget

reporting?
Monitor and report on expenditure and

costs?
Record budget information in required

documents?
Modify contingency plans?
Report on budget and expenditure?
Interpret a profit and loss account?
Evaluate the campuses’ performance based

on financial information provided?
Recommend solutions in relation to

variances?
Assessor signature:

Assessor name:
Date:

Assessment Task 4: Debtor management project
Task summary
This assessment task requires you to review and evaluate financial management processes.
This assessment is to be completed in the simulated work environment in the RTO.
Required
 Access to textbooks and other learning materials
 Computer with Microsoft Office and internet access
 Access to the internet
 Aged Debtor Summary
 Aged Debtor Monitoring Summary
Assessment Task 4 Instructions as provided to students
Complete the following activities:
1. Write an Aged Debtor Report for the CEO.
Aged Debtor Report
Summary
This document is Aged Debtor

Monitoring Report
It is part of the supporting assessment resources for Assessment Task 4 of BSBFIM501
Company X
Aged Debtors Analysis
As of June 30th
2017
Report: Aged
Debtors Analysis
Client Range: All
Client Name 120+ 90 days 60 days 30 days current Total

days
Client 1 $4,356.00

Client 2 $2,714.00
Client 3 $3,781.00
Total $2,71400 $4,35600 $3,781.00 0.00 0.00 0.00
When running this report, select an as at date. The report will consolidate trades if they were unprecedented up
until that date. For case, requesting that were envisioning portion on the report date are incorporated, without a
doubt in case they've been paid since.
Debtor management
Assessment of the company’s aged debtor processes
1. Information in the aged debtor report

The report ordinarily sorts the solicitations and credit notes by client and by date, and gatherings together
unpaid solicitations that are expected in different timeframes. It subtotals solicitations and credit notes by
client and by time span so It can be perceived the amount it is waited to get from every client, and the
aggregate sum that should contact it by a particular date.
In case the company is enlisted for VAT, the report will show the solicitations and credit notes
comprehensive of VAT since that is how a lot of cash you will get from the client – despite the fact that the
company do not find a workable pace all.
The aged debtors report for the most part partitions out unpaid solicitations that are expected to be paid to the
company inside 30 days, in 30 to 60 days, in 60 to 90 days and in over 90 days, being for Grow Management
Consultants the payment 10 days for invoice.
2. Good practice debtor management
The good practice needs to be in terms of the records, about the years and the future view of the debtors. It is
necessary to implement a good cash flow and debtor-tracking tools which helps to pull through the financial
data regarding the necessary debts overview.
The financial department needs to implement the efficient methods and tools to reducing the size of the debt.
 Ensure all instalment game plans with account holders are constantly affirmed recorded as a hard
copy
 For late instalments, contact the account holder expeditiously to affirm they got their receipt
 Create a month-to-month borrower matured examination
 Make sure your solicitations meet your clients' configuration necessities
 Create a borrower's day exceptional graph to recognize potential income upgrades if your business
could limit past due instalments
3. Recommendations that could be adopted by the company
To practice an efficient aged-debtors report, the company can:
 Implement a cash flow and debtor-tracking software in terms of the debts overview.
 Have a positive reviewing with the aged debtor reports regularly, to watch out its behaviour.
 Priority the late-paying customers.
 Automate the notifications and emailing with late-paying customers.
 Enforce payment terms.
Credit Policy and terms of trade: They should be routinely investigated to guarantee they are suitable for
the associations hazard profile. The credit approach ought to be unmistakably verbalized recorded as a hard

copy to all indebted individuals and comprehended by all staff. Terms of exchange ought to be recorded and
spread regions, for example, prepayments, up front instalments, terms and any limits for early settlement.
Invoicing and estimates: All quotes, estimates, invoices, contracts, agreements, purchase orders, and related
documentation ought to allude to your terms of exchange and credit approach, and data on the idea of
work/items provided, amounts, timings and the structure and technique for instalment ought to be obviously
explained so as to limit any misconceptions. Guaranteeing that acknowledgement of terms recorded as a hard
copy is prescribed. Also, obviously, receipt as right on time and as regularly as could be expected under the
circumstances.
Accounts receivable processes: The process for collections should be unmistakably mapped out and
comprehended by staff, with the timings of different correspondences (letters/messages/calls) verbalized. In
case of indebted person questions, instalment of the non-contested sum ought to consistently be tried to keep
up sources of income.
Conduct Credit Checks to identify and mitigate risks: Credit checks for new and existing clients ought to
be done routinely to distinguish issues which can impact credit limits. Acknowledge information items, for
example, record observing and alarms are progressively accessible to distinguish decay in credit-value and
moderate credit chance.
Review system and ledger monitoring: Scheduled reviews of credit limits are basic to guarantee settings
are fitting for singular borrowers. Routinely observing the days outstanding (DSO) is basic to recognize
antagonistic patterns in the indebted individuals' record and guaranteeing brief activity.
Tips for improving debtor management

Include at least 5 recommendations that could be adopted by the company
1. be crystal clear with your payment policies
Don’t fall into the trap of assuming your clients will read the fine print – even when you’ve made signing the
contract dependent on their acceptance.
The easiest debtor management strategy you can put in place is adding essential payment term information in
prominent positions on your proposals, invoices and even your website. Make the information easy to find,
clear and concise. Also consider adding in a step to your proposal process to seek clarification from the client
that they’ve understood, and accepted, those terms in particular.
2. Reduce your payment terms
This may seem counterintuitive – if a client is struggling to pay within 30 days now, why make the invoice
due even earlier? A month, or longer, gives clients far too much of an opportunity to forget about (or
misplace) your invoice. Instead, consider if 7- or 14-day payment terms may work better for your business.
Cash-on-delivery is also increasingly common (although these days, it’s more tap-on-delivery or bank-
transfer-on-delivery) and may work for your business, given the right mobile point of sale technology. At the
very least, consider it as an option for clients who have been repeat late payers.
3. Offer early payment discounts

While it may not always be an ideal option to offer an incentive to pay on time, it can be a powerful tool for
getting invoices paid early. Consider a small percentage discount for paying before the due date, or provide
an additional service or product instead.
On the flip side, you could also consider charging interest on late payments – although always make sure this
is clearly stipulated in your terms and clients are acutely aware that this penalty exists. A surprise late
payment fee is never a good look.
4. Automate your debtor management process
Automation software, such as Xerox, is a great way to streamline the debtor management process.
With accounts receivable automation, you can build your payment term policies into the system that sends
the invoices and tracks payments. Consider implementing automated emails to your clients 7 and 3 days
before an invoice is due. Also ensure the overdue email reminders are set up for 7, 14 and 21 days, and that
you’re notified as soon as an invoice is more than one day overdue.
5. Provide additional payment options
Some clients want to pay via bank transfer, others via credit card. Some want to pay online, some in person.
Offering a wide variety of payment methods, such as our Accounts Pay solution, gives your clients the
freedom to choose their preferred way to pay, making it all the more likely that they’ll pay on time.
Hi mam,
Here is the aged debtor report and you can all the necessary information and can you give me an
approval so, that I can implement best practice debtor management processes. It would really appreciate
and grateful if you like my budget,
Thank you
Regards,
Lovepreet

Aged debtor summary

Company X
Aged Creditors Analysis
As of June 30th 2017,
Report: Aged Creditors Analysis

Client Range: All
Client Name 120+ Days 90 Days 60 Days 30 Days Current
Client 1 $4,356.00
Client 2 $2,714.00
Client 3 $3,781.00

Totals 2,714.00 4,356.00 3,781.00 0.00 0.00
Monitor debtor management procedures.
Company X
Aged Creditors Analysis
As of December 31 2017,
Report: Aged Creditors Analysis

Client Range: All

Nam
Client e 120+ Days 90 Days 60 Days 30 Days Current Total
Client A $345.00 $534.98 $ 435.00 $ 457.00 $ 122.00
B $435.00 $524.00 $645.00 $5.00 $111.00
C $543.00 $123.98 $536.00 $534.00 $100.00
D 342 543 424 435 120
Totals 1,665.00 1,725.96 2,040.00 1,431.00 453.00
Hi mam,
Here is the aged debtor summary and monitor debtor management procedures, you can check all the
necessary data and can you please check all the figures are relevant according to requirement. It would
really appreciate and grateful if you like it.
Thank you
Regards,
Lovepreet

Student’s name:
Completed
Analyse information on the effectiveness of

financial management processes?
Recommend improvements to financial

management approaches based on best
practice approaches?
Implement improved financial management

approaches?
Monitor improved financial management

approaches?
Assessor signature:
Assessor name:
Date:

Student Assessment Tasks: BSBFIM501 Manage Budgets and Financial Plans

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What are the basic principles of double entry bookkeeping?

What are the basic principles of double entry bookkeeping?

What is the principle of cash accounting and what are its advantages and disadvantages?

What is the principle of cash accounting and what are its advantages and disadvantages?

MID CITY EDUCATION PTY LTD

RTO Code: 45100 CRICOS Code: 03627G

Student Assessment Tasks

BSBFIM501 Manage budgets and financial plans

Provide answers to all of the questions below:

1. Explain the basic principle of double entry bookkeeping.

© 2020 RTO Works <RTO Name and ID> Page 2

o Union Excise duties

© 2020 RTO Works <RTO Name and ID> Page 3

o Duties of Excise (Medicinal and Toilet Preparations)

o Additional Duties of Excise (Textiles and Textile Products)

o Additional Duties of Excise (Goods of Special Importance)

o Additional Duties of Customs (commonly known as CVD)

o Special Additional Duty of Customs (SAD)

o Cesses and surcharges

B. State taxes that are subsumed under the GST are:

o Central Sales Tax

o Entertainment Tax (not levied by the local bodies)

o Entry Tax (other than those in lieu of octroi)

o Taxes on lotteries, betting and gambling

© 2020 RTO Works <RTO Name and ID> Page 4

Pay super, at least quarterly, for eligible employees.

You don't have FBT obligation

 Water, Sewerage, and drainage

 Sales through duty-free shops

1. -If your GST turnover is less than $10 million

© 2020 RTO Works <RTO Name and ID> Page 5

1. sales that are input taxed sales

2. sales not connected with an enterprise that you carry on

© 2020 RTO Works <RTO Name and ID> Page 6

 that the document is intended to be a tax invoice

14. Explain the purpose of a financial audit and auditor’s report.

© 2020 RTO Works <RTO Name and ID> Page 7

15. Describe why companies may choose to develop budgets.

 control the finances of the business

The benefits of budgeting should never be underestimated when running a business:

16. Explain the main steps in the budgeting process.

© 2020 RTO Works <RTO Name and ID> Page 8

© 2020 RTO Works <RTO Name and ID> Page 9

17.List 5 ways to improve cash inflow and give examples.

 Organizing short-term finance to cover working capital shortages

 Product lines or services still meet your customers’ needs

© 2020 RTO Works <RTO Name and ID> Page 10

5 – Putting your cash to work

An electronic spreadsheet can be used to automatically perform numerical calculations. Spreadsheet

© 2020 RTO Works <RTO Name and ID> Page 11

Financial Statements should present information simply.

Be cautious about adding extra accounts

Sometimes it is necessary to add extra accounts

© 2020 RTO Works <RTO Name and ID> Page 12

Bad example of a Chart of Accounts

The profit and loss statement needs to be simplified very considerably.

2 There is duplication (and over complication) of categories:

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Assessment Task 1 Checklist