Assignment Submission Front Sheet

Salha Mahdali Abu-khairah

Learners Name:

Diploma in Small Business Management

Qualification:
Unit 29 - Establish and maintain a cash accounting system
Unit number & title:

Assignment Title: Assignment 1

15th Apr 2017 ABCD
Issue Date: Target Grade:
20th Apr 2017
Date Work Due In: Deadline Met:
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Scenario
Smart Computer Solutions
Mr. Alharbi is the owner of Smart Computer Solutions. His
company, Smart Computer Solutions is a small business which
provides computer related services for both the office and home
markets.
Smart Computer Solutions needs to prepare a chart of accounts
and maintain proper documents as per the financial
requirements.

Task 1 (Unit 36) (Identify relevant

information to establish a chart of accounts
SLO 1. Skill Scope 1 & 2)
Smart Computer Solutions has several branches in Jeddah and
has hired you as a consultant to review their accounts and
prepare a chart of accounts.
His current accounts and their balances are:
Bank 100,000
Loans 25,000
Cash 15,000
Utility Bills 8,000
Service Revenue 20,000
Rent 15,000
Building 63,000
Machinery 20,000
Sales 22,125
Payroll 12,650

i) You are required to prepare a chart of accounts for the

accounts listed above
Bank (Assets)
Loans (Liability)
Cask (Assets)
Utility Bills (Expenses)
Service Revenue (Revenue)
Rent (Expenses)
Building (Assets)
Machinery (Assets)
Sales (Revenue)
Payroll (Expenses)

1. Balance Sheet Account:

Assets.
Liability.
Owners Equity.
2. Income Statement Account:
Revenue.
Expenses.

i. Mr.Alharbi would like to add a separate account for

telephone bills. How would you insert that into the chart of
accounts? (This must be done in Excel.) Refer to the Excel
sheet
ii. What does your chart of accounts consist of?
Name
Block indicator
Maintenance language
Controlling integration
The GL account number
Chart of account key
Group chart of account

What existing material do you use to identify the

components of a chart of accounts?
Code
Name and description
Type
Tax rate
YTD (year to date)
iii. What accounting software do you think Smart Computer
Solutions use?
TALLY Software.
iv. Who validates the chart of accounts?
The manager will validate the chart account because he will need to
use a Virtual Private Network (VPN) to access key business systems
including the Berkeley Financial System (BFS).

Task 2 (Set up and maintain a petty cash

system SLO 4 Skill Scope 3)

Smart Computer Solutions has the following petty expenses for

the month of February.
Write up a petty cash book, with analysis columns for office
expenses, motor expenses, cleaning expenses and casual labor.
The cash float brought down is $600 and the amount spent is
reimbursed on 28 Feb. Show the balance carried down to 1 March.
(In Excel)
Year 2016
$
Feb 1 Letter headings 32
2 F.Lee-casual labour 15
2 Unique Motors- motor repairs 33
4 Petrol 27
5 Paper clips 10
8 Envelopes 12
9 Cleaning materials 15
11 C.Hop- casual labour 27
13 Mr.Ng-cleaner 21
16 Typewriter ribbons 24
18 Motor taxation 60
21 K.Kwan - casual labour 20

You are required to:

i) Prepare an analyzed petty cash book entry starting from
May 1st 2015 to June 1st 2015
ii) Calculate the cash to be received on May 1st
iii) Balance the account on May 30th
iv) Calculate the impress reimbursement on June 1st
v) Make the appropriate cash book and ledger entries for office
expenses, motor expenses, cleaning expenses and casual labor.
(Do this in Excel)
Task 3 (Process and reconcile credit card
payments SLO 5 Manage bank
reconciliations SLO 6 Prepare and produce
financial reports SLO7. Skill Scope 4)
i) The following are the extracts from the Cash book and Bank
statement for Smart Computer Solutions.

This must be done in Excel.

ii) Smart Computer Solutions has to prepare and produce

financial reports at agreed intervals on organization's
financial position from the data in the accounting system.
List 2 reports that are drafted at agreed intervals, to
whom are these reports sent to and how are these
reports verified?
Income statement
Balance sheet
These reports will send to the finance manager of the business.

How are these reports verified?

Income statement: calculate the difference between the
revenue and expense numbers to verify the equity section, as
owner's equity is simply the difference between the revenue and
expenses.
Balance sheet: verification of Assets and liability to verified the
balance sheet.
 iii) How will the business Process and reconcile credit card
payments?
Created a backup copy of the company file.
Setup the bank or credit card account in QuickBooks with
the correct beginning balance.
Entered all unclear transactions for the statement period.
Received a copy of your bank or credit card statement.
Task 4 (Analyse and verify source
documents SLO2 Process receipts and
payments SLO3. Skill Scope 5)

i. How do you verify invoices and other documents for

accuracy and compliance?
If a faxed or copy invoice is presented for payment, determine
whether the invoice has already been submitted for payment
using the following ways:
If procurement Inquiry does not show that a check has
been issue, contact AP (oooshsa@yale.edu, 4882-594)
to determine if the invoice was previously submitted for
payment. Proceed as instructed by AP.
To make sure that an actual invoice is not a statement has
been received from the supplier. Refer to Guide Invoice
Identification.

ii. What method do you use to identify discrepancies between

amounts owed and amounts paid?
Cash tendered is a sum of money given in payment. It may not be
equal to the exact amount owned. Using cashiering as an example
(which is part of a businesss A/R), cash is presented as payment for
a service or to settle an outstanding bill. That cash is tendered. If it
is exactly equivalent to the amount of money owned, then cash
tendered is equal to (the amount of) cash paid.

If the amount of cash tendered is greater than the amount owed, a

credit balance is owed to the customer. The credit might be change,
or it might be entered onto the books of the business as an A/P item
due to that customer in the future. This is a case when cash
tendered is greater than cash paid. Note that cash tendered minus
cash paid equals change returned to the customer or the sum
entered into the books as A/P.

If the amount of cash tendered is less than amount owed, the

business might accept this money. If so, A/R would be reduced by
the amount of cash tendered. Often the terms of the transaction will
not allow cash tendered to be less than the amount due though!
 Examples are restaurant bills and instalment payments e.g. credit
card monthly charges or a mortgage payment. If so, none of the
cash tendered by the customer will be accepted by the business.
This is a scenario where cash tendered is greater than zero while
cash paid is equal to zero.

iii. How do you investigate and resolve the discrepancies?

Recount with a different person performing the second count.
Track down incorrectly recorded transactions.
Verify outstanding transaction.
Identify consignment item.
Confirm and reconcile the size of units so units are consistent.
Track down second storage locations.
Isolate incorrectly stored item and restore them to their
correct storage.
Verify part number or locate missing part numbers.

iv. How do you think Smart Computer Solutions process

receipts and payments?
How to Process Receipts:
There are two functions on your Sales System Menu in which you
can enter funds received from your Customers: Customer Receipts
Quick Entry and Sales Receipts. Both will allow you to either
start a new Lodgement or add to one which has previously been
created. A Lodgement is a batch of Cheques received from your
Customers to which you add a reference number and which
subsequently corresponds to an actual Bank Lodgement of the
Receipts entered against that Lodgement No. For Bank
Reconciliation purposes this greatly simplifies the process
subsequently. This same Lodgement creation (and addition) facility
is also available in Bank Sundry Receipts and in the Sales Receipt
alternative method of entering Customer Receipts.

How to Process Payments:

The Menu items Supplier Payments Quick Entry and Purchase
Payments function in exactly the same way for Suppliers as
Customer Receipts Quick Entry and Sales Receipts do for
Customers. The exact same facilities are available to both and so do
not need repeating in this instance.
The one exception, however, relates to Batch processing. In the case
of customer receipts you have the facility to create a Lodgement
from a batch of receipts and, clearly, this is neither needed nor
available in supplier payments processing.

Reading List
 The student should demonstrate a clear understanding of all unit
outcomes by undertaking simple solutions to tasks; all unit outcomes must
be met to achieve a minimum of Grade D.
Students are able to resubmit work to achieve a higher grade, providing
they have met the original submission deadline. Students can resubmit
work twice only.
All outcomes at each grade must be evidenced in order to achieve that
grade A-D.

Grade D

The trainee

Shows some awareness of chart of accounts and accounting

software.
Makes the appropriate cash book and ledger entries for office
expenses, motor expenses, cleaning expenses and casual labor.
Shows limited understanding in preparing an updated cash book

Identifies and lists 2 financial reports

Shows basic understanding of processing and reconciling credit card

payments
Identifies how to verify invoices and other documents for accuracy
and compliance.

Grade C

The trainee has achieved everything at grade D and

Shows good awareness of chart of accounts

Has correctly identified the accounting software

Correctly records the opening balance of cash in the petty cash

book.
Prepared a correct updated cash book

Shows good understanding of financial reports.

Shows good understanding of processing and reconciling credit

card payments
Explains the method used to identify discrepancies
between amounts owed and amounts paid.
 Grade B

The trainee has achieved everything at grade D and C

The assignment is submitted a week late

The assignment has few spellings and grammatical mistakes

Shows correct understanding of chart of accounts

Explained the use of accounting software correctly

Correctly calculates the closing balance in the petty cash book.

Prepared the bank reconciliation with some mistakes.

Correctly identifies to whom the financial reports are sent.

Explains how to investigate and resolve the discrepancies

Grade A

The trainee has achieved everything at grade D and C and B and has

Submitted the assignment on time.

Made no spelling or grammatical mistakes in the assignment.

Shows excellent explanation of chart of accounts and the use of

accounting software.
Correctly calculates the impress reimbursement at the end of
the period
Prepared an accurate bank reconciliation statement.

Correctly explains how the financial reports are verified

Explains process receipts and payments