Accounting System And Process

Questions: 1.Define Plagiarism. Why is Plagiarism/Collusion unfair to honest students?2.How can Computer Spreadsheets be pasted into a Word Document showing Rows and Column Headings?3.List five Web Sites relevant to Accounting with their URLs. Explain how is each relevant to Accounting. Evaluate the usefulness to you in understanding accounting.4.What is Second Life? What is its Connection with CPAA? Explain.5.Describe the Computing Environment in your Current or Previous Workplace or Home Office - Equipment, Software, Processes etc. 6.Play the CPA ABC Learning Movies (from Interact2 Resources or the Internet). Identify and briefly explain three (3) Financial Reporting issues and three (3) Accounting Ethical issues raised by this Case.7.Explain how this Equation affects the relationships with increases and decreases in P A L E R. 8.Balance Sheet Equation9.Give 3 examples each of Assets, Liabilities and Owners Equity (Proprietorship) Accounts.10.What is a Chart of Accounts? Evaluate its purpose? 11.List six Accounts with Normal Debit Balances. List six Accounts with Normal Credit Balances. 12. Create Trial balance.A. Create a Manual Solution using Pen and Paper. Scan or take an e-photo and Paste in your Assignment. B. Create a Spreadsheet Solution. Paste normal and Formula Views.C. Change 4 numbers such that the Trial Balance still Balances. Paste this new Normal View. There should be no need to Paste a New Formula View. Ensure that you choose the 4 changes yourself. Highlight the Data Changes with the yellow highlighter in Excel.13.Distinguish between Cash and Accrual Accounting? Give Examples.14.Why are Adjusting Entries needed at the end of the Period?15.List four types of Adjusting Entries and give Examples of each.16.You pay $120 for a magazine subscription for the next 12 months. How should the magazine Company Account for this Transaction? Show the Journal Entry. Show the adjusting entry after 5 months.17.Distinguish between the Adjusted Trial Balance and the Post-Cl osing Trial Balance. 18.Distinguish between Current and Non-Current Liabilities. Give your own Examples of each.19.Explain the Current Ratio and the Debt Ratio. Create your own Numerical Examples.20.Add a ten Column Worksheet beneath the following Data. Your Cpreadsheet will also create the Financial Reports. Answers: 1.Plagiarism and its outcomes: Plagiarism is actually the act of theft. Plagiarism takes place when someone duplicates another writers languages and claimed it as his own. There are copyright laws to protect the writers creation. To avoid the charge of plagiarism a writer must give credit to the original writer. Even the unintentional plagiarism is not acceptable at academic level. To use anothers work, it must be cited properly. An honest student, who has completed his task with honesty may get less marks as compared to a student who have committed plagiarism. This is very unfair to a honest student (Chaddah 2014). 2.How to paste excel sheet in words: Excelsheet is inserted in word file by through these: Open the ward and excel file that is the destination file and the file from which information is to be copied. Click to the excel file, press CTRL+C from the keyboard on the selected data and then in the word file press CTRL+V from keyboard. Formula view: To demonstrate the excel sheet in formula view, following methods need to be done: From toolbar section in excel, press the tab written formula Then from the tab of formula auditing, click on the formula view Copy and paste methods: On the selected document, press from keyboard the CTRL + C button for copying and then to the target file, press CTRL + V from keyboard to paste. Select the document, right click on it and then choose the copy option. Next, in the target file, right click and choose paste option Normal View: Table 1: spreadsheet (Source: As created by the author) Formula view: Table 2: spreadsheet (Source: As created by the author) 3.Resources of accounting in Internet: Following websites are used as sources for accounting: Accounting Education .Com it is used for the requirements of educational accountants. Website - https://www.accountingeducation.com/ Financial standard board for accounting they provide information about investors, accounting standards and tax rates. Website - https://www.fasb.org/ Pivot table with Budgeting it helps in management accounting with use of pivot table. Website - https://www.accountingweb.co.uk/ Smart Pros it provides career and professional data for accountants. Website - https://accounting.smartpros.com/ Electronic Accountant it provides guide for resources and web magazines for accountants. Website - https://www.accountingtoday.com/ 4.Second Life and CPAA: Second life is actually a implicit world, which offers relation with public, education and monetary propositions. CPA is profession related to public accounting in the second life. CPAA, that is, CPA Australia has established relationship with accounting bodies professionally with second life (Wang and Burton 2013). 5.Work integrated assessment: Computer equipment are those which are used in the working environment are printers, fax machines, laptops, computers, and LAN. Using of companys LAN and Wireless technology are permitted by the administration and they can withdraw the permission anytime they want.. There is significant damage risk or demolition to the company's computer system, or information loss, from any illegal access that may results into loss of records or intrusion. The workers are therefore prevented from using own computers or storage space devices like "smart" phones, USB / flash drives, external hard drives, or laptops or iTouch/iPods/iPads/ or other sources for storage of data, in the working atmosphere. The company may use different software to carry out the financial tasks. Accounting software helps in developing the records and properly transacting them to the annual report. It helps in preparing wage bill, debtors and creditors invoice, payment and expenditure invoices and records. The company uses Tally ERP software for accounting purposes. Tally ERP is easy to install and maintain. The experts for Tally ERP software are easily available. Additional part can be installed easily and employees can be familiar with the software with less training. The company also uses the other other programmes like Web browsers, Adobe reader, Microsoft office, and PDF. 6.ABC Learning and Ethics: ABC Learning was the worlds most famous and largest childcare. They were subject to the collapse in the corporate level. Fabulous pick and speedy fall of the company was an incident of possibilities of damage that a company can face if it does not follow the basic objectives of accounting. Accounting issues were: Liquidity problem and inflation in the asset valuation caused the closing of the company. Finance and business managers should have assured the sound practices of accounts The company should have controlled the future benefit of accounts arising from economy Ethical issues were: The management of the company should manage the required accounting processes with ethical concerns. company directors should have carried out the business ethically and should have followed the corporate law to defend the investors ABC should have carried out the business for the welfare of the society and concentrating only on income was not ethical (ABC Learning collapse case study, 2016). 7.Sources = Uses theory of P A L E R is stated in the mechanism of P A L E R that when the materials are segregated under sources and uses, it is probably be equal. The owners equity and liabilities and net profits are expected to show on the left side of balance sheet and the assets are placed in the right side of the financial statement. 8.Balance sheet equation: Data: Table 3: spreadsheet (Source: As created by the author) Report: Table 4: spreadsheet (Source: As created by the author) 9.Assets examples: Cash, Land, bills receivable Examples of liability: Accounts payable, interest payable, customer deposit Examples of owners equity: preferred stock, Paid up equity capital, and paid-in capital from treasury stock 10.Chart of accounts and its uses: Account Chart is use to list all the systems followed in preparing the accounts. It gives confirmation for equity, expenses, revenues, liabilities and assets. Accounting chart used by different companies varies from each other as the system of accounting is different for different company. It list all the systems used for accounting (Anderson et al. 2013). 11. Debit and Credit balance: Debit Balance: This is the closing balance found in the ledger accounts left side. Examples of debit balances are cash, prepaid expenses and inventory. Their balances improve with a debit entry, and collapse with a credit entry. Credit Balance: Credit balance is the closing balance found in the ledger accounts right side. Examples of credit balances are Sales, Liabilities, gains, revenues and owner equity. Their balances improve when the account is credited and their balances collapse when they are debited (Donavan et al. 2016). 12.Trial Balance: (A) Figure 1: manual trial balance Source: created by author (B) Normal view: Table 5: excel view without formula (Source: As created by the Author) Formula view: Table 6: excel view with formula (Source: As created by the Author) (c) Trial balance after changing 4 numbers: Table 7: excel view after changing numbers (Source: As created by the Author) 13.Differences between accrual accounting and cash accounting: Cash Basis: Revenue is transacted only after the receipt of cash. Expenses are transacted only after the payment of cash for expenses Accrual basis: Incomes are recorded when they are earned, which is generally occurs before the amount received Expenses are recorded in the statement of income in the period when they takes place, generally it is different from the period of payment (Cohen, Kaimenakis and Venieris 2013). 14. Adjusting entries: These are the journal entries of accounting which alter the accounting transactions of the company to the accountings of accrual basis. A journal entry for adjustment is transacted before preparing the financial report (Porter 2012). 15.Types of adjusting entries: Four types of period end adjusting entries are as follows: Accrued revenues: The revenue when earned, however, not received is known as accrued revenue. As example, ABC Corp. received commission income of $1000 related to September 2014 and received it on 10th February 2015. ABC Corps financial period closed on 31st December 2014. Journal entry for the transaction will be : Commission income receivable A/c debit $1000 To Commission on service tax $1000 On receipt of commission (10th February 2015) the journal entry: Service tax A/c debit $1000 To commission income receivable $1000 Accrued expenses: The expenses when incurred but the amount not paid is the accrued expenses. For example, PQR Corp. paid insurance of $500, for November 2013 in February 2014. Journal entry will be: Insurance expenses A/c debit $500 To insurances payable $500 On insurance payment (February 2016) the entry will be: Insurance payable A/c debit $500 To cash $500 Deferred revenues: Incomes for which the bill is served in advance and facility is provided afterwards. As example, PQR Corp provides auditing services to XYZ Corp and billed for $20000 in advance for yearly cost before providing the auditing service. The journal entry: Revenue receivables A/c debit $2000 To Deferred revenue $2000 Deferred Expenses: Incomes which has not earned but the facility already given to the client. As example, wage expenses for $500 for February 2015 has been paid in November 2014 The journal entry : Prepaid wage expenses A/c debit $500 To cash $500 16.Revenue received in advance: To the magazine company, payment made for $240, as payment for next 12 months in advance. The company shall transact the entry initially as deferred revenue income. The journal entry for the transaction will be: Cash A/c debit $240 To unearned revenue $240 5 months later, magazines amounting ($240/12*5) = $100 is provided, the entry will be: Unearned revenue A/c debit $100 To income from sale of magazines $100 17.Difference between the post-closing trial balance and adjusted trial balance: Closing balances from the general ledger are recorded in the trial balance. Normally trial balance is made before transacting the entries for adjustment at the financial year closing. When the trial balance is prepared after transacting the adjustment entries, it called the adjusted trial balance. For example, if the statement of revenue is prepared after the adjustment in the trial balance, then post closing trial balance can be prepared. Post-closing trial balance is always prepared before the preparation of the balance sheet. However, revenue and expenditures are not included in the post closing trial balance (Their et al. 2015). 18.Non-Current and Current liabilities: Current liabilities: current liabilities are realised within 12 months of the balance sheet period. Current liabilities are paid out of available cash or selling any stocks. One liability can be exchanged for another liability. Generally the current liabilities are reflected at historical cost. Short term loan is one example for current liability. Non-Current Liabilities: Non-current liabilities does not get settled in 12 months. These are the long-term obligation of the company. Investors and shareholders want to know the non current liability position of the company as it reflect the burden level of companys liability on its cash inflow. Long-term loan is an example for non-current liability (Sheets 2016). 19.Ratios: Current ratio: It measures the ability of a firm to pay off its long term as well as short term liabilities (Chen, Lee and Shrestha 2013). It is calculated as: Current ratio = Current assets / Current liabilities For example, a firms current asset is $40000 and current liabilities is $20000, then current ratio: Current Ratio = $20000/$10000 = 2. Debt ratio: it is the proportion of long-term and short-term debt to the total asset. It is formulated as Debt ratio = Total debt/Total asset For example, if a firms asset is $1000000 and the short-term and long-term debt is $250000 then its debt ratio is: Debt ratio = $250000/$1000000*100 = 25% 20.Table 8: Adjusted Trial Balance (Source: As created by the author) Table 9: Adjustment Worksheet (Source: As created by the author) Table 10: Income statement (Source: As created by the author) Table 11: Financial statement (Source: As created by the author) Table 12: Statement of changes on equity (Source: As created by the author) Table 13: Adjustment Worksheet after changing figures (Source: As created by the author) References: ABC Learning collapse case study. (2016). Cpaaustralia.com.au. Retrieved 8 December 2016, from https://www.cpaaustralia.com.au/professional-resources/education/abc-learning-collapse-case-study Anderson, J., Frandsen, W., Healy, J. and Degele, S., Microsoft Corporation, 2013.Logical chart of accounts with hashing. U.S. Patent 8,539,006. Chaddah, P., 2014. Not all plagiarism requires a retraction.Nature,511(7508), pp.127-127. Chen, S.S., Lee, C.F. and Shrestha, K., 2013. Futures hedge ratios: a review. InEncyclopedia of Finance(pp. 871-890). Springer US. Cohen, S., Kaimenakis, N. and Venieris, G., 2013. Reaping the benefits of two worlds: An explanatory study of the cash and the accrual accounting information roles in local governments.Journal of Applied Accounting Research,14(2), pp.165-179. Donavan, A.A., Gerchak, C.D., Abbamonte, S.M., McAll, K.J., Strader, C.P., Ginac, C.W., Hare, T.C., Tremblay, A.M., Mueller, D.W., Yu, X. and Maddox, R.W., 2016.Gaming system and method providing a plurality of different player-selectable wager alternatives when a credit balance is less than a designated wager amount and greater than or equal to a lowest eligible credit balance. U.S. Patent Application 15/052,459. Porter, J.C., 2012. 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