FNSACC504 Prepare financial reports for corporate entities

FNSACC504 Prepare reports for corporate entities

Student Name# Shahriar Ahmed

AIA-FNSACC504-AT1-V2017.1

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FNSACC504 Prepare financial reports for corporate entities

Assessment Task 1 Cover Sheet

Student Declaration
To be filled out and submitted with assessment responses
 I declare that this task is all my own work and I have not cheated or plagiarised the work or colluded
with any other student(s).
 I understand that if I If I am found to have plagiarised, cheated or colluded, action will be taken against
me according to the process explained to me.
 I have correctly referenced all resources and reference texts throughout these assessment tasks.
Student name

Student ID number

Student signature

Date

Assessor declaration
 I hereby certify that this student has been assessed by me and that the assessment has been carried
out according to the required assessment procedures.

Assessor name

Assessor signature

Date

Assessment outcome S NS DNS Resubmission Y N

Feedback

Student result response

 My performance in this assessment task has been discussed and explained to me.
 I would like to appeal this assessment decision.
Student signature

Date

A copy of this page must be supplied to the office and kept in the student’s file with the evidence.

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Assessment Task 1: Written Questions

Task summary
 This is an open book test.
 Students need to answer all of the written questions correctly.
 Questions must be completed within 1.5 hours.
 Answers must be word processed and sent to your assessor as an email attachment.

Required
 Access to textbooks/other learning materials
 Computer and Microsoft Office
 Access to the internet

Timing
The assessor will advise you of the due date of this submission.
Write in the due date below as advised by your assessor:

Submit
 Answers to all questions

Assessment criteria
 All questions must be answered correctly in order for a student to be assessed as having completed
the task satisfactorily.

Re-submission opportunities
Students will be provided feedback on their performance by their Assessor. The feedback will indicate if you
have satisfactorily addressed the requirements of each part of this task.

If any parts of the task are not satisfactorily completed your assessor will explain why and provide you
written feedback along with guidance on what you must undertake to demonstrate satisfactory performance.
Re-assessment attempt(s) will be arranged at a later time and date.

Students have the right to appeal the outcome of assessment decisions if they feel they have been dealt
with unfairly or have other appropriate grounds for an appeal.

Students are encouraged to consult with their assessor prior to attempting this task if they do not understand
any part of this task or if they have any learning issues or needs that may hinder them when attempting any
part of the assessment.

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Written answer question guidance

The following written questions use a range of “instructional words” such as “identify” or “explain”, which tell
you how you should answer the question. Use the definitions below to assist you to provide the type of
response expected.
Note that the following guidance is the minimum level of response required.

Analyse – when a question asks you to analyse something, you should do so in in detail, and identify
important points and key features. Generally, you are expected to write a response one or two paragraphs
long.

Compare – when a question asks you to compare something, you will need to show how two or more things
are similar, ensuring that you also indicate the relevance of the consequences. Generally, you are expected
to write a response one or two paragraphs long.

Contrast – when a question asks you to contrast something, you will need to show how two or more things
are different, ensuring you indicate the relevance or the consequences. Generally, you are expected to write
a response one or two paragraphs long.

Discuss – when a question asks you to discuss something, you are required to point out important issues or
features, and express some form of critical judgement. Generally, you are expected to write a response one
or two paragraphs long.

Describe – when a question asks you to describe something, you should state the most noticeable qualities
or features. Generally, you are expected to write a response two or three sentences long.

Evaluate – when a question asks you to evaluate something, you should do so putting forward arguments
for and against something. Generally, you are expected to write a response one or two paragraphs long.

Examine – when a question asks you to examine something, this is similar to “analyse”, where you should
provide a detailed response with key points and features and provide critical analysis. Generally, you are
expected to write a response one or two paragraphs long.

Explain – when a question asks you to explain something, you should make clear how or why something
happened or the way it is. Generally, you are expected to write a response two or three sentences long.

Identify – when a question asks you to identify something, this means that you are asked to briefly describe
the required information. Generally, you are expected to write a response two or three sentences long.

List – when a question asks you to list something, this means that you are asked to briefly state information
in a list format.

Outline – when a question asks you to outline something, this means giving only the main points, Generally,
you are expected to write a response a few sentences long.

Summarise – when a question asks you to summarise something, this means (like “outline”) only giving the
main points. Generally, you are expected to write a response a few sentences long.

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Assessment Task 1 Instructions

Provide answers to all of the questions below:

1. Review the Australian Taxation Office web site and identify company tax rates for the current
tax year for the following types of entity:
 Small business entity
 Non-profit company
 Non-profit company that are small business entities

Answer to the question No:1

Particulars Rate
Small business entity – 27.5%

Non-profit company –

Income (up to $415) Nil

Income (from $416 to $915) 55%

income (above $915) 30%

Non-profit company that are small business entities –

Income (up to $415) Nil

Income (from $416 to $831) 55%

income (above $831) 27.5%

2. Explain ATO requirements for businesses regarding GST registration.

Answer to question No.2

If the yearly turnover exceeds $75,000 for a business or $150,000 for a non-profit
organisation, GST registration is mandatory for the business.

3. Explain how the Corporations Act 2001 defines a Pty Ltd company and requirements regarding
the number of directors and members.

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Answer to the question No:3

According to corporations Act 2001, A pty Ltd. Company must have more than 50
shareholders.one director must be the citizen of the Australia.

4. Under the Corporations Act 2001, how long must a registered company keep its financial
records.

Answer to the question No:4

According to corporations Act 2001, A registered company keeps its financial records at
least 7 years.

5. Explain under what circumstances consolidated accounts must be prepared?

Answer to the question No:5

It has been presumed that the parent company holds control over its subsidiaries. If the
parent company holds at least 51 shares of the subsidiary company. In this case, the parent
company must be prepared consolidated accounts.

6. Outline key considerations for a professional accountant in evaluating interests and

relationships that may create a conflict of interest and provide three examples of situations
which could result in a conflict of interest for a professional accountant.

Answer to the question No:6

It is presumed that conflict of interest in professional accounting occurs when a firm

provides multiple service to the same client such as audit, tax, forensic accounting etc.

A. Conflict of interest occurs when two firms are competing with each
other to acquire a company where the advice of the accounting
professionals might be relevant to the interest.
B. Conflict of interest occurs when accounting professionals provide
services to both vendor and a purchaser in relation to the same
transactions.
C. Conflict of interest occurs when accounting professionals
represent two clients regarding common issue who are in legal
dispute such as dissolution of partnership business.

7. Outline two mechanisms that an accountant working in a large accountancy firm could take to
prevent unauthorised disclosure of confidential information when performing professional
services related to a particular matter for two or more clients whose interests with respect to that
matter are in conflict.

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Answer to the question No.7

A. Accountant should monitor the activity of the clients whether they are trying to leak
the confidential information. If they try take necessary measures to prevent these.
B. Accountant should increase the security of electronic devices such as laptop, PC,
Mobile, Email account. In this case two factor authentication can be useful.

8. Explain the circumstances in which an accountant’s duty of confidentiality would be overridden,

and give at least one example of this.

Answer to the question No.8

An accountant’s duty of confidentiality would be overridden when disclosure is

required by law.

For example: If Court has wanted to see the financial statements of the company
due to any dispute related to tax. Company always tries to hide its income
by some way so it is confidential for the company.

9. Explain at least five key features of integrated computerised accounting systems, for example
MYOB or Xero.

Answer to the question No:9

Integrating: It provides the facilities of integrating all business activities such as sales,
Finance, tax, audit etc.

Instant reporting: It can generate a quality report in real time because of high speed and
accuracy.

Accuracy and speed: Computerised accounting system provides the facility of customized
templates for users which allow fast and accurate data speed.

Security: Computerised data system provides high security to data.

Quick decision making: It provides the facility of quick decision as the report got instantly.

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10. Explain the purpose of General Purpose Financial reports as set out in the Accounting Standard
AASB 101 Presentation of Financial Statements and how these differ to special purpose
reports.
Answer to the question No:10

The general purpose of financial report is to inform all about the economic
transactions while the purpose of special financial reports is to inform specific
person about the economic transactions such as sales Journal, Purchase Journal.

11. Explain components of a financial report as set out in the Accounting Standard AASB 101
Presentation of Financial Statements, giving a brief description of each.

Answer to the question No:11

Statement of the financial position: showing the amount of assets, liabilities and
equity on a point of time.

Comprehensive income statement: showing the amount of income and expenses

and net profit on a certain period of time.

Statement of the cash flows: Showing all cash inflows and out flows on a certain
point of time.

Statement of the retained earnings: showing the equity of the owners after a
certain period of time usually one year.

Financial notes and disclosure: Deprecation calculation method, Inventory

Calculation method

12. Explain fair presentation and compliance with AAS as set out in the AASB101 Presentation of
Financial Statements

Answer to the question No:12

When company prepares financial statement following all the compliance with AAS as
set out in the AASB101 Presentation of financial statement, this will be considered as fair
presentation.

13. Explain the two accounting principles on which the calculation and reporting of deprecation is
based.
Answer the No question to:13

Cost principle: The cost of the assets should be recorded on the basis of historical
cost

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Matching principle: The cost of the assets should be allocated according to the
estimated life of the asset.
14. Outline two common methods for calculating depreciation that can be used by an accountant.
Answer to the question No:14

Straight line method: The amount of the deprecation well be equal of the life of the
assets.

Double decaling method: The amount of the deprecation will be higher in the first
year than gradually it will be decreased

15. Outline three deductions that a business may not claim, and explain why for each.
Answer to the question No:15

Utility Bill: If any profit does not come from using utility bill, you must give certain amount
as service charge or line charge.

Rent: Even if no production or official activity has been occurred, you need to pay the rent.

Salary: If no transactions have been occurred, you need to pay salary to the employee.

16. Outline the ATO requirements for reporting fringe benefits tax.

Answer to the question No:16

The businesses must submit a return to the ATO. Then the company needs to pay the tax if
the company is entitled to get fringe tax benefits then it gets the money as return tax
money.

17. Explain the T-format of displaying accounts and why a business may choose to adopt this
format rather than a list approach.
Answer to the question No: 17

In T –formats the Journal is divided into portions One is debit and another one is credit. A
business may choose to adopt this format than a list approach because they can know the
debit and credit balance at a time.

18. Explain four general features of financial statements that a business must take into account
when preparing financial statements as per the AASB 10 Presentation of financial statements.
Answer to the question No:18

Fair presentation: Using the accounting standards.

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Going concern: There is no certain time limit of running business.

Accrual basis: Transactions should be recorded when it is incurred no matter

whether cash or credit.

Matching principles: Income should be offsetting against cost.

19. Explain the basic principle of double entry bookkeeping.

Answer to the question No:19

There must be two parties in a transaction .one party is debit another one is credit.
The amount of debit should be equal to the balance of credit.

20. Explain accrual accounting and why a business may choose to adopt this approach over cash
basis accounting.

Answer to the question No:20

In accrual basis accounting transactions should be recorded when it is occurred. Business

adopt this because it reflects the scenario of the business.

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Assessment Task 1 Checklist

Student’s name:

Did the student provide a sufficient and Completed

clear answer that addresses the successfully Comments
suggested answer for: Yes No
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

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