Securing Higher Grades Costing Your Pocket? Book Your Coursework Help at The Lowest Price Now!

  • +1-617-874-1011 (US)
  • +44-117-230-1145 (UK)
Online Customer Service

BSBFIA401 Double Entry of Bookkeeping

To complete the unit requirements safely and effectively, the individual must:

  • Explain double-entry bookkeeping principles
  • Identify general journal and general ledger entries
  • List the key provisions of relevant legislation, regulations, standards and codes of practice that may preparation of financial reports
  • Describe organisational accounting systems
  • Outline relevant organisational policies, procedures and accounting standards. 

Assessment must be conducted in a safe environment where evidence gathered demonstrates consistent performance of typical activities experienced in the financial administration field of work and include access to:

  • Office equipment and resources
  • Computer equipment and relevant software
  • Relevant standards
  • Samples of financial data
  • Workplace reference materials such procedural manuals and company policy
  • Case studies and, where possible, real situations.

Answer:

Accounting principle

Describe and state when used

Double – entry bookkeeping principles

Double entry of bookkeeping accounting system states that each transaction from business will engage 2 or more accounts. It also allows to establish the accounting equation that is Assets = Liabilities + Equities. Except some small entities standard method of recording the transactions is through double entry. Whenever there is a debit entry there shall be an adjusting credit entry for the same amount.

General journal and general ledger entries

General journal is referred as books of the original entry. In the journal the accounting entries are listed in accordance with the dates. General ledger entries are the set of numbered accounts used by the businesses for tracking the financial transactions and preparing the financial reports. General journal is used when the entity uses the double entry book keeping system through debit and credit to maintain the accounting equation. On the other hand, the general ledger entries are passed by the businesses that employ double entry book keeping system that is each of the financial transactions have impact on 2 general ledger accounts and each entry has debit as well as credit transaction (Easton and Sommers 2018).

Key provisions of relevant accounting and auditing standards

Auditing and accounting practices are regulated with worldwide standards. Requirement of developing the auditing and accounting practices created from birth of the joint stock companies during the year 1844 that was accompanied with the segregation of ownership and control. The segregation required that the management


shall report to owners regarding fairness of stewardship and resources assigned to them on the periodic basis. Accounting standards are considered as major regulatory mechanisms while preparing general purpose financial statements. It is concerned about the measurement scheme and the disclosure principles. On the other hand, auditing standards are necessary for subsequent auditing of the financial statements. It is used for providing the users of financial statements with the auditor opinion regarding whether the financial statements are presented in fair and material aspect (Lane and Farleigh 2017).

Goods and services tax (GST) regulation

GST is 10% fee added by Australian government to all the services and goods those are imported to Australia. All the Australian businesses having turnover of $ 75,000 per annum ($ 150,000 for the non-profit entities) shall register themselves for GST. For registering under GST, the business house must have ABN (Australian business number).

 

Date

Particulars

Folio

Debit

Credit

June 1

Colin a/c

Capital

 

$ 200,000

 

$ 200,000

June 2

Inventory a/c

Input GST

Accounts payable

 

$ 6,000

$ 600

 

 

$ 6,600

June 15

Rent expenses

Input GST

bank a/c

 

$ 1,500

$ 150

 

 

$ 1,650

June 28

Insurance expenses

Input GST

Bank a/c

 

$ 300

$ 30

 

 

$ 330

June 30

Motor vehicle

Input GST

Bank a/c

 

$ 22,000

$ 2,200

 

 

$ 24,200

June 30

Cash a/c

Sales a/c

Output GST

 

$ 55,000

 

$ 50,000

$ 5,000

Bank account

Date

Particulars

Folio

Debit

Credit

Balance

June 15

Rent expenses with GST

 

 

$ 1,650

 

June 28

Insurance expense with GST

 

 

$ 330

 

June 30

Motor vehicle purchase with GST

 

 

$ 24,000

$ 26,180 (Credit)

Capital a/c

Date

Particulars

Folio

Debit

Credit

Balance

June 1

Colin a/c

 

 

$ 200,000

$ 200,000 (Credit)

Inventory a/c

Date

Particulars

Folio

Debit

Credit

Balance

June 2

Accounts payable

 

$ 6,000

 

$6,000 (Debit)

GST paid and collected

Date

Particulars

Folio

Debit

Credit

Balance

June 2

Accounts payable

 

$ 600

 

 

June 28

Bank a/c

 

$ 2,380

 

 

June 30

Cash a/c

 

 

$ 5,000

$ 2,020 (Credit)

Rent a/c

Date

Particulars

Folio

Debit

Credit

Balance

June 15

Bank a/c

 

$ 1,500

 

$ 1,500 (Debit)

Accounts payable

Date

Particulars

Folio

Debit

Credit

Balance

June 2

Inventory

 

 

$ 6,000

$ 6,000 (credit)

Motor vehicle

Date

Particulars

Folio

Debit

Credit

Balance

June 30

Bank a/c

 

$ 22,000

 

$22,000 (Debit)

Insurance

Date

Particulars

Folio

Debit

Credit

Balance

June 28

Bank a/c

 

$ 300

 

$ 300 (Debit)

Sales>

Date

Particulars

Folio

Debit

Credit

Balance

June 2

Cash a/c

 

 

$ 50,000

$ 50,000 (credit)

Trial balance as at 30th June (Extract)

Account name

Debit

Credit

Bank account

 

$ 26,180

Capital a/c

 

$ 200,000

Inventory

$ 6,000

 

GST

 

$ 2,020

Rent

$ 1,500

 

Accounts payable

 

$ 6,000

Motor vehicle

$ 22,000

 

Insurance

$ 300

 

Sales

 

$ 50,000

 

Accounting principle

Describe and state when used

Balance sheet function and purpose

Main function of the balance sheet is informing the investors, company owners and the creditors regarding the liabilities, assets and shareholder’s equity at specific point of the time. Purpose of the balance sheet is revealing the financial status of the business at particular point of time. It reveals what is owned by the company in terms of assets, what is owed in terms of liabilities and the amount invested as equities (Robinson et al. 2015)

Revenue statements

Revenue statement is one of the three major financial statements used to report the financial performance of the company over the particular accounting period. Revenue statement is mainly focussed on the expenses and revenues of the company during specific period of time (Henderson et al. 2015)

Ø Cost of goods sold

Ø Gross profit

Ø Operating net profit

Ø Unclassified adjusted expenses and revenues

Ø Cost of sales is direct cost that is attributable to goods production or service supply. It measures the cost incurred for producing the goods or the services provided under a particular period of time.

Ø Gross profit is the amount of profit generated by the entity after deducting all the costs associated with the producing and selling the products or the costs incurred for delivering the services. It is appeared in the income statement of the company and the formula used is gross profit = revenues – cost of sales.

Ø Operating profit is the residual income left with the company after paying all the costs required for operating the businesses. Along with COGS it includes the fixed expenses like rent, rates, insurance and variable costs like freight, shipping charges, utilities and payroll (Wang 2014).

Ø Unclassified adjusted expenses and revenues are recorded in the income statement; however, they are not classified into any classes. Total amount of the revenue or expenses do not change irrespective of the fact that the accounts are classified or unclassified.

Recording of assets –

  • Purchased computer on 1/7/2016 for $ 14,000 with nil residual value and additional $ 1,000 for software installation. Method of depreciation is straight line and estimated useful life is 5 years.

Depreciation = ($ 14,000+$1000 – 0)/5 = $ 3000 per year

  • Purchased computer on 1/9/2016 for $ 9,000 with nil residual value and additional $ 3,000 for installation. Method of depreciation is straight line and estimated useful life is 4 years.

Depreciation = ($ 9,000+$3000 – 0)/4 = $ 3,000 per year

  • Purchased motor vehicle on 1/8/2016 for $ 18,000 with nil residual value and additional $ 2,000 for music system. Method of depreciation is straight line and estimated useful life is 5 years.

Depreciation = ($ 18,000+$2,000 – 0)/5 = $ 4,000 per year

Date

Particular

Folio

Debit

Credit

Purchase

01/07/2016

Computer

Software installation

Bank

(Purchased computer through bank)

160

215

220

14000

1000

 

 

15,000

01/09/2016

Office furniture

Installation

Bank

( Purchased Machinery)

150

215

100

9000

3000

 

 

 

12,000

01/11/2016

Motor vehicle

Music system

Cash

( Purchased computer)

166

215

100

18,000

2,000

 

 

20,000

Depreciation

30/06/2017

Depreciation expense

Accumulated depreciation- computer

(Depreciation calculated as 20% p.a)

 

3,000

 

3,000

30/06/2017

 

 

 

Depreciation expense

Accumulated depreciation-Office furniture

(Depreciation calculated as 25% p.a)

 

3,000

 

3,000

30/06/2017

Depreciation expense

Accumulated depreciation-Motor vehicle

(Depreciation calculated as 20% p.a)

 

4,000

 

 

4,000

 

ASSET REGISTER CARD

Description: Computer

Estimated Residual: 0

Asset ID : Comp001

Depreciation Method : Straight line Method

Location :Admin Office

Depreciation Rate: 20%

Supplier: ABC Company

Estimated Useful Life: 5 Years

Date

Details

Original capital cost

Additional cost

Total capital cost

Depreciation

Written down value

Annual

Accumulated

1/7/2016

Computer purchased

14,000

1,000

15,000

 

 

15,000

30/6/2017

 

 

 

 

3,000

3000

12000

30/06/2018

 

 

 

 

3,000

6,000

9,000

30/6/2019

 

 

 

 

3,000

9,000

6,000

 

ASSET REGISTER CARD

Description: Office furniture

Estimated Residual: 0

Asset ID : Furn005

Depreciation Method : Straight line Method

Location :Admin Office

Depreciation Rate: 25%

Supplier: ABC Company

Estimated Useful Life: 4 Years

Date

Details

Original capital cost

Additional cost

Total capital cost

Depreciation

Written down value

Annual

Accumulated

1/9/2016

Office furniture

9,000

3000

12,000

 

 

12,000

30/6/2017

 

 

 

 

3,000

3000

9,000

30/06/2018

 

 

 

 

3,000

6,000

6,000

ASSET REGISTER CARD

 

Description: Motor vehicle

Estimated Residual: 1000

 

Asset ID : Motr003

Depreciation Method : Straight line Method

 

Location :Admin Office

Depreciation Rate: 20%

 

Supplier: ABC Company

Estimated Useful Life: 5 Years

 

Date

Details

Original capital cost

Additional cost

Total capital cost

Depreciation

Written down value

 

Annual

Accumulated

 

1/8/2016

Office furniture

18,000

2,000

20,000

 

 

20,000

 

30/6/2017

 

 

 

 

4,000

4000

16,000

 

30/06/2018

 

 

 

 

4,000

8,000

12,000

 

30/06/2019

 

 

 

 

4,000

12,000

8,000

 

Additional expenses

Date

Service Provider

Details of work Provided

cost

1/07/2016

Selling company

Software installation

1000

01/9/2016

selling company

Computer services

3000

01/08/2016

Selling company

Music system

2000

 

Profit or loss on disposal –

Item

Carrying value

Selling price

Profit /( Loss)

Computer

6,150

2000

(4,150)

Office furniture

6,000

7,000

1,000

Motor vehicle

8,000

10,000

2,000

Total profit/(loss)

 

 

(1,150)

4.3 project work activity

Answer 1

Register for PPE is the register that lists all the fixed assets owned by business and includes details like the type of asset, location of the asset, date and purchase price and useful life of asset. Fixed asset register includes the following items –

  • Serial number that shows the entries count
  • Identification
  • Description of the asset
  • Name of the asset
  • Date of purchase
  • Purchase costs
  • Date on which the asset is put to use
  • Method of depreciation
  • Rate of depreciation
  • Amount of the depreciation
  • Asset’s gross book value
  • Asset’s net book value
  • Salvage value expected from the asset

Depreciation is allocation of asset’s cost over the useful life of the asset on systematic basis. On the basis of generally accepted accounting principles the method of depreciation is determined. Various factors considered while determining the appropriate method of depreciation are as follows –

  • If it is considered that the equal amount of the asset will be used in each period on continuous basis throughout the useful life of the asset straight line method will be most appropriate. Assets for which this method is used are office furniture and building.
  • If the measurable units are produces by the asset, units-of-production method is used. It allocates the depreciation on per unit basis in each period (Frias?Aceituno, Rodríguez?Ariza and Garcia?Sánchez 2014).  
  • If the asset is used more in early years of the asset’s life as compared to the later years of the asset’s life declining balance method will be appropriate.

Fixed asset register is maintained on a book or on excel spreadsheet that includes the below mentioned details –

  • Identification and serial number
  • Name of the asset
  • Date of purchase
  • Purchase costs
  • Method of depreciation
  • Rate of depreciation
  • Amount of the depreciation and accumulated depreciation
  • Asset’s net book value

At end of each month accountant shall prepare the depreciation schedule for each line item using the rate of depreciation and describing in the sub-section.

There are 2 ways of computing the depreciation on the assets – diminishing balance method and straight line method. Hence, the entities are required to determine the appropriate method that will be suitable for them. Eventually, they are required to record the depreciation in the journal entry.

Prepaid expenses are the future expenses payment for which has been made in advance. In other words, the prepaid expenses are for which costs have been paid but the services has not been availed yet. Prepaid expenses are reported in the balance sheet of the company under current assets. On the other hand, accrual expenses and revenues are that which have already been availed or consumed however, the related payment has not yet been made. Accruals are reported in the balance sheet of the company as liability (Trotman and Carson 2018).

Bad debts are those debts that are not expected to be recovered. Bad debt expenses are recorded in the income statement as expense. Bad debts can be recorded in 2 ways – allowance method or direct write off method. Under direct write off method when it is probable that invoice from specific customer will not be paid invoice amount is recorded to the bad debt expenses directly. It is debit to the bad debt expenses and credit to the receivable account. on the other hand, as per allowance method while the sales transaction is recorded an associated amount for bad debt expense is recorded. It is recorded as debit to bad debt expense account and credit to allowance for the doubtful accounts (Zeff, van der Wel and Camfferman 2016).

1st journal entry is recorded for clearing the opening balance of inventories through debiting the income summary and crediting the inventories for an equal amount of opening balance of inventories. 2nd adjusting journal entry is recorded through debiting the inventories and crediting the income summary for the inventory values at the closing of the accounting period (Macve 2015).  

Main purposes of the adjusting entries are adjusting the expenses and revenues to accounting period to which it pertains. After making the entries in accounting journals they are posted or recorded in the general ledger in same way as other journal entries are recorded.

Every time a transaction takes place shall be recorded. After recording the transactions in journal, they are transferred to general ledger. Each transaction from the journal entry shall be posted to ledger. Ledger is the final entry book and is used for classifying and organizing the transactions. Each of the journal entry is transferred to individual account. These line items are known as ledger accounts (Cao, Chychyla and Stewart 2015).

Final ledger accounts are prepared for reflecting the gross as well as net profits to evaluate the way in which the entity has performed during particular time period. This evaluation can be used for making future decisions.

Revenue statements are prepared for evaluating the entity’s past performance that provides the basis for predicting future performance. It is prepared by taking into consideration all the revenues and deducting the expenses from that (Minnis and Sutherland 2017).

Balance sheet is prepared for revealing the performance of the company. It is regarded as the documented proof regarding the assets and liabilities of the company and the claims of residual ownership against the equity at particular point of time. Balance sheet gives clear idea regarding the assets of the company and liability claims against it. It is prepared through showing the assets that is segregated into current assets and non-current assets, liabilities that is segregated into current liabilities and non-current liabilities and owner’s equity (Kwok 2017).

Reference 

Cao, M., Chychyla, R. and Stewart, T., 2015. Big Data analytics in financial statement audits. Accounting Horizons, 29(2), pp.423-429.

Easton, M. and Sommers, Z., 2018. Financial Statement Analysis & Valuation, 5e.

Frias?Aceituno, J.V., Rodríguez?Ariza, L. and Garcia?Sánchez, I.M., 2014. Explanatory factors of integrated sustainability and financial reporting. Business strategy and the environment, 23(1), pp.56-72.

Henderson, S., Peirson, G., Herbohn, K. and Howieson, B., 2015. Issues in financial accounting. Pearson Higher Education AU.

Kwok, B.K., 2017. Accounting irregularities in financial statements: A definitive guide for litigators, auditors and fraud investigators. Routledge.

Lane, C. and Farleigh, W., 2017. Annual Report and financial statements.

Macve, R., 2015. A Conceptual Framework for Financial Accounting and Reporting: Vision, Tool, Or Threat?. Routledge.

Minnis, M. and Sutherland, A., 2017. Financial statements as monitoring mechanisms: Evidence from small commercial loans. Journal of Accounting Research, 55(1), pp.197-233.

Robinson, T.R., Henry, E., Pirie, W.L., Broihahn, M.A. and Cope, A.T., 2015. International Financial Statement Analysis, (CFA Institute Investment Series). John Wiley & Sons.

Trotman, K. and Carson, E., 2018. Financial accounting: an integrated approach. Cengage AU.

Wang, C., 2014. Accounting standards harmonization and financial statement comparability: Evidence from transnational information transfer. Journal of Accounting Research, 52(4), pp.955-992.

Zeff, S.A., van der Wel, F. and Camfferman, C., 2016. Company financial reporting: A historical and comparative study of the Dutch regulatory process. Routledge.

This problem has been solved.


Please send an Email to help@urgenthomework.com with the Payment ID and the link to the document to collect by email


Cite This work.

To export a reference to this article please select a referencing stye below.

Urgent Homework (2022) . Retrive from https://www.urgenthomework.com/sample-homework/bsbfia401-double-entry-of-bookkeeping

"." Urgent Homework ,2022, https://www.urgenthomework.com/sample-homework/bsbfia401-double-entry-of-bookkeeping

Urgent Homework (2022) . Available from: https://www.urgenthomework.com/sample-homework/bsbfia401-double-entry-of-bookkeeping

[Accessed 29/09/2022].

Urgent Homework . ''(Urgent Homework ,2022) https://www.urgenthomework.com/sample-homework/bsbfia401-double-entry-of-bookkeeping accessed 29/09/2022.


Buy BSBFIA401 Double Entry of Bookkeeping Answers Online

Talk to our expert to get the help with BSBFIA401 Double Entry of Bookkeeping Answers to complete your assessment on time and boost your grades now

The main aim/motive of the management assignment help services is to get connect with a greater number of students, and effectively help, and support them in getting completing their assignments the students also get find this a wonderful opportunity where they could effectively learn more about their topics, as the experts also have the best team members with them in which all the members effectively support each other to get complete their diploma assignments. They complete the assessments of the students in an appropriate manner and deliver them back to the students before the due date of the assignment so that the students could timely submit this, and can score higher marks. The experts of the assignment help services at urgenthomework.com are so much skilled, capable, talented, and experienced in their field of programming homework help writing assignments, so, for this, they can effectively write the best economics assignment help services.

Get Online Support for BSBFIA401 Double Entry of Bookkeeping Assignment Help Online

Resources

    • 24 x 7 Availability.
    • Trained and Certified Experts.
    • Deadline Guaranteed.
    • Plagiarism Free.
    • Privacy Guaranteed.
    • Free download.
    • Online help for all project.
    • Homework Help Services

Tap to Chat
Get Instant Assignment Help
Tap to Chat
Get Instant Assignment Help