Business Banking Procedures And Financial Management

Understanding Source Documents in Financial Management

An original record from which the accounting entries are recorded in the books of accounts or in accounting system can be described as a source document. For example supplier’s invoice is the source document for recording purchase entries in the books of accounts of an organization.

Answer 2:

An employee should follow the following procedures:

The employee should be fully aware of the amount of money that he is about to deposit.
He should take full precautions to ensure there is no risk of misplacing the cash in the bank while depositing.

Immediately after depositing the cash into the bank the employee should take the deposit receipt from the bank.

The employee should take a bank statement to check that the amount deposited is showing in the bank statement properly (Hoyle, Schaefer & Doupnik, 2015).

Answer 3:

The documents should be complete from all aspects.
All fields in the document should be correctly filled.

The filing should be made as per the requirements of respective legislation.

Answer 4:

The clerical officer shall be asked to submit the cash deposit receipt of the bank to the office immediately after depositing the money into the bank. Duly stamped deposit receipt from the bank is a possible proof of lodgements.

Answer 5:

MYOB is a popular accounting software in the country. Auditing the records of the company is one of the ways to be used to evaluate whether the data has been correctly recorded in the accounting software in an organization. There is a separate currency tab in the software that shall be clicked to ensure selection of appropriate currency in the software. The key purpose of accounting reporting are as following:

To keep record of all financial transactions properly.
To report the financial performance and position of an organization.
To provide the management with important financial information as and when needed to take important business decisions.
To provide the stakeholders of an organization important financial information about the organization as on a particular date (Schaltegger & Burritt, 2017).

Answer 6:

An organization must have a strong authentication process to ensure there is no fraudulent online transactions. Use of unique user id and password is a must. In addition the system should have one time password system that shall be generated and send to the private numbers of the individuals making payment to ensure there is minimum risk of fraudulent transactions in the online.

Answer 7:

The supporting documents shall include bills and invoices to support such petty cash expenditures must be attached with the petty cash vouchers. Generally the cashier is the responsible person to approve such petty cash claims.

Answer 8:

Firstly, the colleague should have deposited the cash overnight even though he had a busy day.
However, even if left the cash in the cash register he should have locked the cash register properly to ensure no one can take any cash out of the register.

Answer 9:

GST registration number of the creditor.
ABN must be provided of the supplier.

GST amount showing separately in the invoice.

Signature of appropriate persons in the invoice must be there (Libby, 2017).

Answer 10:

In case no ABN has been provided then 49% of the invoice amount must be withheld and the account payable shall be recorded accordingly.

Answer 11:

There should be CCTV cameras in the cash counter. The cash registers should have proper locks. Employees other than cashier should not be allowed to enter inside the cash counter without the permission of the cashier.

Answer 12:

Banking Act 1959 and the Reserve Banking Act 1959 are the main legislations governing banking activities in Australia. These legislations are important to correctly regulate the banking industry in the country.

Answer 13:

Daily transactions are processed all at once are described as batch total whereas receipts issued show the number of transactions occurred during the period from last batch to the current batch.

Answer 14:

Business banking services shall be used to perform business banking procedures.

Answer 15:

The credit information of the customers must stay confidential. There should not be any breach in internal controls and securities while accepting payments from credit card and debit card of customers.

Answer 16:

Amount of cash along with denomination of different notes and coins must be maintained properly and taken in the banks at the time of deposit along with the pass book of the bank account and cash deposit slips.

Answer 17:

The person should take the stamped deposit receipt from the bank and submit it to the office properly. The bank statements should be collected and if it is not possible at least the passbook must be up-dated immediately to check that the deposited amount has been correctly entered in the pass book.

Answer 18:

The deposit clerk shall be asked to explain the reason for such differences. In addition the differences must be reconciled immediately.

Answer 19:

To ensure that the document contains all details.
All details in the documents have been entered correctly.

The necessary authorization has been made correctly.

Answer 20:

The invoice must have ABN of the supplier along with GST registration number. The details of the invoice shall be checked with the purchase order along with inventory register. The amount showed for different items should be checked to ensure these are correctly calculated in the invoice. The amount of GST must be correctly calculated in the invoice.

Answer 21:

Entering wrong amounts.
Classification errors.

Answer 22:

Stamped deposit receipts from bank.
Up-to-dated bank statements.

Up-to-dated pass book of appropriate bank accounts.

Intimation from banks.

Answer 23:

Sales transactions.
Purchase transactions.

Contract transactions.

Answer 24:

An appropriate person shall be given the responsibility of handling cash, cheque and vouchers. The vouchers must be processed only after checking proper authorization in the vouchers.

Answer 25:

Tax invoice
Robin’s Landscaping Services	277 Kent Street, Sydney 2000
ABN 12 345 678 910
Dated: 19 November, 2012
To: Mascot Pty Ltd 19 Rodrigo Road Mascot NSW 2017 ABN 16 987 653 21
Description of services	Quantity	Rate ($)	Amount ($)
Ride on Mower grass cut	6 Hours	77.00	462.00
Weeding services	2 Hours	66.00	132.00
Whipper snipping services	5 Hours	22.00	110.00
Rubbish removal	5 Loads	110.00	550.00
Total price inclusive of GST	1,254.00

Answer 2:

Date	Assets	Liabilities	Owners’ Equity
	Premises	Bank	Plant and machinery	Inventory	Motor vehicle	Laptop	Bank loan	Accounts payable
1	150000	20000	15000	10000			50000	8000	137000
2		(5000)		5000
4		(2000)					(2000)
9					10000			10000
13				6000				6000
16		(900)				900
19		(10000)						(10000)
21		(1500)							(1500)
22		5000		(3500)					1500
30		(2500)							(2500)

Journal entries:

Date	Account titles	Folio	Debit ($)	Credit ($)
April, 2016
1	Cash		30,000.00
	Owner’s capital			30,000.00
	(being cash introduced in the business)

2	Office equipment		1,000.00
	GST		100.00
	Accounts payable -Quick Office Equipment	1,100.00
	(Being office equipment purchased)

3	Inventory		6,600.00
	GST (6600 x10%)		660.00
	Cash			7,260.00
	(Being inventory purchased)

7	Cash		6,050.00
	Sales			5,500.00
	GST			550.00
	(Being sales affected)

	Profit and loss account		3,500.00
	Inventories			3,500.00
	(Being inventories used for sale)

	Sales		5,500.00
	Profit and loss account			5,500.00
	(Being sales recorded in the profit and loss account)

8	Accounts receivable- Accurate Limited	2,860.00
	Sales			2,600.00
	GST			260.00
	(Being sales affected)

	Profit and loss account		1,800.00
	Inventories			1,800.00
	(Being inventories used for sale)

	Sales		2,600.00
	Profit and loss account			2,600.00
	(Being sales recorded in the profit and loss account)

9	Rent		1,500.00
	GST		150.00
	Cash			1,650.00
	(Being rent paid)

14	Cash		1,980.00
	Sales			1,800.00
	GST			180.00
	(Being sales affected)

	Profit and loss account		1,200.00
	Inventories			1,200.00
	(Being inventories used for sale)

	Sales		1,800.00
	Profit and loss account			1,800.00
	(Being sales recorded in the profit and loss account)

15	Inventory		2,000.00
	GST (2000 x10%)		200.00
	Accounts payable -Prompt Services		2,200.00
	(Being inventory purchased)

17	Cash		33,000.00
	Bank loan			33,000.00
	(Being money borrowed for business purpose)

21	Owner’s capital		2,900.00
	Bank			2,900.00
	(Being cash used for personal expenses of the owner)

29	Accounts payable -Prompt Services	2,200.00
	Cash			2,200.00
	(Being cash paid)

30	Bank		2,860.00
	Accounts receivable- Accurate Limited	2,860.00
	(Being cheque received)

Cash
Date	Particulars	Fol	$	Date	Particulars	Fol	$
April, 2016				April, 2016
1	Owner’s capital		30000	3	Inventory		6600
7	Sales		5500	3	GST		660
	GST		550	9	Rent		1500
14	Sales		1800	9	GST		150
	GST		180	17	Owner’s capital		2900
17	Bank Loan		33000	29	Accounts payable- Prompt Supplies		2200
					Balance c/d		57020
			71030				71030

Inventory
Date	Particulars	Fol	$	Date	Particulars	Fol	$
April, 2016				April, 2016
3	Cash		6600	7	Profit and loss account		3500
15	Accounts payable -Prompt		2000	8	Profit and loss account		1800
				14	Profit and loss account		1200


					Balance c/d		2100
			8600				8600

Owner’s capital
Date	Particulars	Fol	$	Date	Particulars	Fol	$
April, 2016				April, 2016
21	Cash		2900	1	Cash		30000
	Balance c/d		27100
			30000				30000

GST
Date	Particulars	Fol	$	Date	Particulars	Fol	$
April, 2016				April, 2016
3	Cash		660	7	Cash		550
9	Cash		150	8	Accounts receivable -Accurate Limited		260
15	Accounts payable -Prompt		200		Cash		180
2	Accounts payable –Quick Office equipment		100
14	Cash		180		Balance c/d		300
			1290				1290

Office equipment
Date	Particulars	Fol	$	Date	Particulars	Fol	$
April, 2016				April, 2016
2		Accounts payable -Quick Office Equipment	1000
					Balance c/d		1000
			1000				1000

Sales
Date	Particulars	Fol	$	Date	Particulars	Fol	$
April, 2016				April, 2016
				7	Cash		5500
				8	Accounts receivable -Accurate Limited		2600
				14	Cash		1800

	Balance c/d		9900
			9900				9900

Accounts payable -Quick Office Equipment
Date	Particulars	Fol	$	Date	Particulars	Fol	$
April, 2016				April, 2016
				2	Office equipment		1000
	Balance c/d		1100		GST		100
			1100				1100

Rent
Date	Particulars	Fol	$	Date	Particulars	Fol	$
April, 2016				April, 2016
9	Cash		1500		Balance c/d		1500

Accounts payable-Prompt services
Date	Particulars	Fol	$	Date	Particulars	Fol	$
April, 2016				April, 2016
29	Cash		2200	2	Inventory		2000
					GST		200
			2200				2200

Bank Loan
Date	Particulars	Fol	$	Date	Particulars	Fol	$
April, 2016				April, 2016
				17	Cash		33000
	Balance c/d		33000

Bank
Date	Particulars	Fol	$	Date	Particulars	Fol	$
April, 2016				April, 2016
30	Accounts Receivable- Accurate Limited		2860
					Balance c/d		2860
			2860				2860

Accounts Receivable- Accurate Limited
Date	Particulars	Fol	$	Date	Particulars	Fol	$
April, 2016				April, 2016
8	Sales		2600
	GST		260	30	Bank		2860
			2860				2860

Trial Balance of Jacob as on 30^th April, 2016:

Trial balance
Account titles	Debit ($)	Credit ($)
Cash	57,020.00
Inventory	2,100.00
Owner’s capital	27,100.00
Sales		9,900.00
GST	300.00
Office equipment	1,000.00
Rent	1,500.00
Accounts payable -Quick Office Equipment	1,100.00
Bank loan	33,000.00
Bank	2,860.00
Suspense	6,320.00
Total	71,100.00	71,100.00

Trial Balance	Write correct balances here
Account	Debit	Credit	Debit	Credit
Drawings		12,000.00	12,000.00
Bank Loan	11,000.00			11,000.00
Office equipment	19,500.00		19,500.00
Interest paid	820.00		820.00
Accounts receivable		36,330.00	34,330.00
Bank	21,100.00		23,100.00
Accounts payable	11,200.00			9,200.00
GST Collected/Payable	3,700.00			3,700.00
Insurance	1,200.00		1,200.00
Capital		50,000.00		50,000.00
Computer equipment	5,200.00		5,200.00
Sales	448,000.00			448,000.00
Advertising	4,800.00		4,800.00
Cost of goods sold		336,000.00	336,000.00
Wages	42,400.00		47,200.00
Rent	12,000.00		12,000.00
Bad debts		500.00	500.00
Bank fees		150.00	150.00
Inventory	27,500.00		27,500.00
	607,420.00	434,980.00	428,150.00	521,900.00

Part a:

Date	Transaction details	Source Documents	Amount	Inc GST	Journal ??
Mar 01	R. Stirling commenced a building supply business by depositing cash in the bank	Memo	30,000		Cash receipts
02	Purchased fixtures & fittings for cash	Chq 0001	6,600	√	Cash payments
02	Paid rent on shop premises	Chq 0002	1,100	√	Cash payments
05	Purchased stock on Credit – B Jones	Invoice 47	2,200	√	Purchase distribution
06	Sold goods for cash	Cash	770	√	Sales distribution
06	Credit sales to E. Johnson	Invoice 11	1,100	√	Sales distribution
09	Paid wages	Chq 0003	650		Cash payments
09	Sold goods to F Black	Invoice 12	704	√	Sales distribution
10	Cash sales	Cash	2,750	√	Sales distribution
13	Paid television advertising	Chq 0004	2,420	√	Cash payments
14	Cash sales	Cash	1,320	√	Sales distribution
14	Sales to E. Thomson	Invoice 13	550	√	Sales distribution
16	Sales to D Brown	Invoice 14	825	√	Sales distribution
16	Purchases from P. Plummer	Invoice 687	792	√	Purchase distribution
17	Cash purchases	Chq 0005	1,650	√	Purchase distribution
17	Paid wages	Chq 0006	450		Cash payments
21	Cash purchases	Chq 0007	1,265	√	Purchase distribution
21	Cash sales	Cash	2,200	√	Sales distribution
25	Credit sales to E. Green	Invoice 15	880	√	Sales distribution
27	Received cash from F Black for payment of account in full	Receipt 01	704		Cash receipts
28	Paid bank interest	Chq 0008	250		Cash payments

Part b:

	Cash receipts journals
Date	Account titles	Debit ($)	Credit ($)
March
1	Cash	30,000.00
	Owner’s capital	30,000.00

27	Cash	704.00
	Accounts receivable	704.00
		30,704.00	30,704.00

Cash payments
Date	Account titles	Debit ($)	Credit ($)
March
2	Fixture and fittings	6,600.00
	Cash		6,600.00

2	Rent	1,100.00
	Cash		1,100.00

9	Wages	650.00
	Cash		650.00

13	Advertisement expenditures	2,420.00
	Cash		2,420.00

17	Wages	450.00
	Cash		450.00
28	Bank interests	250.00
	Cash		250.00

Purchase distribution
Date	Account titles	Debit ($)	Credit ($)
March
5	Purchases	2,200.00
	Accounts payable	2,200.00

16	Purchases	792.00
	Accounts payable	792.00

17	Purchases	1,650.00
	Cash		1,650.00

21	Purchases	1,265.00
	Cash		1,265.00

		5,907.00	5,907.00

Sales distribution
Date	Account titles	Debit ($)	Credit ($)
March
6	Cash	770.00
	Sales		770.00

6	Accounts receivable	1,100.00
	Sales		1,100.00

9	Accounts receivable	704.00
	Sales		704.00

10	Cash	2,750.00
	Sales		2,750.00

14	Cash	1,320.00
	Sales		1,320.00

14	Accounts receivable	550.00
	Sales		550.00

16	Accounts receivable	825.00
	Sales		825.00

21	Cash	2,200.00
	Sales		2,200.00

25	Accounts receivable	880.00
	Sales		880.00

		11,099.00	11,099.00

Journal entries of Bright Ltd.

Date	Particulars	Debit ($)	Credit ($)
	Bad debt (1650 x10/11)	1,500.00
	GST	150.00
	Accounts receivable- Shade Supplies	1,650.00
	(Being bad debt recognized)

	Cash	11,000.00
	Motor vehicle (11000 x 10/11)	10,000.00
	GST		1,000.00
	(Being motor vehicle sold)

	Owner’s capital / Drawings	1,000.00
	Lap top		1,000.00
	(being lap top taken for personal use)

	Accounts receivable – Sunny Pty Ltd.	660.00
	Bank		660.00
	(Being the cheque received dishonoured)

	Motor vehicle	25,000.00
	GST (25000 x 10%)	2,500.00
	Sydney Cars Ltd		27,500.00
	(Being motor vehicle purchased)

	Cash	50,000.00
	Owner’s capital		50,000.00
	(Being additional capital introduced)

	$	$
Credit balance as per bank statement		25,037.80
Add: Direct debit	3,330.00
Bank charges	50.00
Cheque dishonoured (176+20)	196.00
Direct debit -Optus	384.00
		3,960.00
		28,997.80
Less: Unresented cheques	351.00
Interest credited	23.70
Receipts on 30th December yet to recorded in bank statements	1,300.00
		1,674.70
Debit balance as per cash book		27,323.10

Answer 8:

Petty Cash Book of Durable Pty ltd.
Receipts	Date	Voucher No.	Details	Payments	Travel	Postage	Stationery	Sundries	GST Paid
150	31-03-16	Cheque no. 536
	01-04-16	203	Tax fare	34	30.9				3.1
	03-04-16	204	Coffee	15				13.65	1.35
	04-04-16	205	Stamps	45		40.9			4.1
	06-04-16	206	Pens	4.5			4.1		0.4
	08-04-16	207	Biscuits	8.35				7.6	0.75
	11-04-16	208	Newspaper	3.5			3.18		0.32
	14-04-16	209	Tax fare	23	20.9				2.1
				133.35	51.8	40.9	7.28	21.25	12.12

			Balance C/D	16.65
		Reimbursement

References:

Hoyle, J. B., Schaefer, T., & Doupnik, T. (2015). Advanced accounting. McGraw Hill.

Libby, R. (2017). Accounting and human information processing. In The Routledge Companion to Behavioural Accounting Research (pp. 42-54). Routledge.

Schaltegger, S., & Burritt, R. (2017). Contemporary environmental accounting: issues, concepts and practice. Routledge.

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