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.

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Answer 2:

An employee should follow the following procedures:

  1. The employee should be fully aware of the amount of money that he is about to deposit.
  2. 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.     
  1. 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:

  1. The documents should be complete from all aspects.
  2. All fields in the document should be correctly filled.
  • The filing should be made as per the requirements of respective legislation.

Answer 4:

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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:

  1. Firstly, the colleague should have deposited the cash overnight even though he had a busy day.
  2. 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:

  1. GST registration number of the creditor.  
  2. ABN must be provided of the supplier.
  • GST amount showing separately in the invoice.
  1. 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:

  1. To ensure that the document contains all details.
  2. 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:

  1. Entering wrong amounts.
  2. Classification errors.

Answer 22:

  1. Stamped deposit receipts from bank.
  2. Up-to-dated bank statements.
  • Up-to-dated pass book of appropriate bank accounts.
  1. Intimation from banks.

Answer 23:

  1. Sales transactions.
  2. 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 30th 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.