ACCT 2517 Lecture Notes PDF

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School of Accounting, Auditing & Taxation

ACCT2511 Financial Accounting Fundamentals Financial Reporting Assignment – MYOB Information Document

Table of Contents Section 1: Setting up the business account .................................................................................. 6 Section 2: Chart of Accounts, Tax codes and Opening Balances ................................................... 9 Section 3: Regular contacts ....................................................................................................... 19 Section 4: Recording Sales......................................................................................................... 22 Section 5: Recording purchases ................................................................................................. 33 Section 6: Banking ..................................................................................................................... 40 Section 7: General journals (adjustments) .................................................................................. 45 Section 9: Financial Reporting .................................................................................................... 50 Section 10: The Statement of Cash Flows .................................................................................. 51 Section 11: Annual Report for Shareholders ............................................................................... 52 Section 12: Submission.............................................................................................................. 55

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ACCT2511 - Financial Reporting Assignment – MYOB Overview In this assignment, you are to create a business profile and record day to day transactions and payroll transactions by using MYOB Essentials™. This project also involves the preparation of common financial statements. Based on the information you have processed and the financial reports you have prepared by using MYOB, you will also be required to write a reflective essay to evaluate the performance of the business.

Parameters This is an individual assignment. When undertaking this assignment you commit to completing the work by yourself. Once you have submitted the assignment your MYOB account activity will also be checked to show completion of the assignment activities. Weighting:

10%

Due date/time: 19 November – 5pm Sydney-time Submission: You are required to submit the electronic files only to Moodle. The link for submission will located in the “Assessments” section. Late policy: Assignments submitted late will incur a 5% per day late penalty up for up to 5 business days. After 5 business days no further late submissions are permitted.

Required PART A: You are required to generate and submit the following documents by using MYOB Essentials™: 1) 2) 3) 4)

A Quote generated for a customer on request, Journals – a list of all journal entries created on a specific date, Journals – Adjustment journal entries, Financials – profit and loss statement (also known as an income statement) and balance sheet for a specific period; (12 marks each, 48 marks in total)

PART B: You are required to assemble a Statement of Cash Flows using the Direct Method based on the information you have processed by using MYOB Essentials™. However, this Statement of Cash Flows needs to be prepared by yourself without using the accounting software. You will use Microsoft Excel to prepare the Statement of Cash Flows. (20 marks) PART C: You are required to prepare an annual report for shareholders. This annual report will contain the following components: (i) CEO letter; (ii) Financial highlights; (iii) Management discussion & analysis of financial statements; (iv) Management Report on adopting MYOB Essentials™; and (v) Financial statements generated in parts A and B of the assignment. (32 marks) TOTAL: 100 MARKS (10% of the overall grade in this course)

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Further information Background – your company You are the CEO of a private company with 20 shareholders. The company is preforming well and has gained a good reputation in the security services industry. Your current strategy is to grow the company beyond Sydney. To do this expansion your plan is to raise the funding by listing on the Australian Securities Exchange (ASX) within the next 5 years. The company sells one type of specialised industrial alarm system (called Javas Ultra02) and provides related services including the installation, maintenance, and repair services of alarm systems. Your company is based in Sydney. You are currently the sole employee and you have an external financial consultant, Jessica Fletcher, to provide advice you about compliance with corporate financial reporting. The financial statements are annual audited by Top, Chen & Qi Audit Firm. When the company takes on a large project from time to time parts of the job are sub-contracted to pool of reliable talented owner and operated security companies. You have some regular suppliers and customers. The financial year of your company is 1 July to 30 June. In the prior years your company used to prepare all its financial statements using Microsoft Excel. The financial consultant, Jessica Fletcher of Winterthur Ltd, has encouraged you to start using an accounting software MYOB Essentials™ as part of the future growth strategy. She indicates this will help prepare the company in preparation to the financial statements that will be required to be prepared for the initial public offering on the ASX. You have decided to take the advice and start to use MYOB Essentials™, a cloud-based accounting software package, to account for your company. Your task is to set up your business profile, record and process daily transactions of your business using MYOB Essentials™. It is hoped that at the end of each month, you will be able to evaluate the operation of your business by examining the financial information generated from accounting software package.

MYOB Essentials™ MYOB Essentials™ is an easy online accounting software that has everything needed to take care of a small business. It is a fast and easy way to manage cash flow and Australian Tax Office (ATO) compliance requirements. It includes time saving features to help take care of the day-to-day bookkeeping and financial reporting. More details about MYOB Essentials™ can be found at: https://www.myob.com/au/accounting-software/essentials

Assignment tasks You will complete this assignment by following the step-by-step instructions documented in this information document. Your Lecturer-in-charge, Dr Victoria Clout, will set you up a student trial account with MYOB Essentials™ and invite you into the file as a “user”. Since MYOB Essentials™ is a cloud-based software package you can work on this assignment anytime and anywhere where internet is available. MYOB Essentials™ can be accessed via a range of devices, but it is NOT recommended that you use your mobile phone for completing this assignment. It is recommended that you use ‘Chrome’ as your browser. To download Chrome, go to: https://www.google.com/chrome/.

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Second, you will input and process the required information specified in this information document. This assignment is to be completed entirely by your self-instructed learning. Note that this assignment is an individual assignment. Although you can chat with your fellow classmates if you get stuck on section but remember that this assignment is must be completed using your own efforts to ensure you understand the process of recording transactions in a software package. The UNSW assessment policies about the conduct of student assessments apply. Detailed guidance on what and how to submit is provided in the Section 12 of this Information Document.

Technical assistance If you require technical assistance then please drop by the Lecturer-in-Charge Dr Victoria Clout’s weekly consultation session or send a message via Microsoft Teams or an email with questions. Details of consultation drop-in sessions are as follows during Weeks 2-5;7-10. Day Mondays

Time 2pm-5pm

Consultation Zoom link https://unsw.zoom.us/j/84519473532

This drop-in consultation sessions are completely optional. No teaching or discussion will be involved in this consultation session. You may want to use time to ask particular questions to the Lecturer-in-Charge or you can make use of this time slot to complete some tasks of this assignment. There will be no dedicated lecturing time and tutorials on the specific tasks of this assignment during the Term. There are two online learning modules to provide you with guidance on how to get started with MYOB.

Certification In addition to your marks achieved from the successful completion of this assignment, you will receive a certificate of proficiency jointly issued by MYOB and the UNSW Sydney. The Lecturer-in-Charge will provide details after the successful submission of this assignment to arrange the certificates to be sent via email.

All the best for your ACCT2511 Financial Reporting Assignment - MYOB! 5 CRICOS Provider Code 00098G

Section 1: Setting up the business account It is assumed that you are the CEO of a company located in Sydney. You are to use MYOB Essentials™ to create your business profile. MYOB Essentials™ is a cloud-based system. You can logout and login to continue working on the project at any time as long as internet is available. *Make sure you allow screen pop-ups.

Step 1: Your Lecturer-in-Charge will set up your Essentials™ online file You will receive an invitation via email from your Lecturer-in-Charge to access the new trial file. This file will be available for your educational study usage for the period of up to 6 months.

Once you accept the Invite you will need to use your student email in zID format, e.g. [email protected] OR if that does not work try using the email address as displayed in Moodle, e.g. [email protected] and create a new password of your choosing. If you have problems with logging in get in touch with the Lecturer-in-Charge. You then need to setup a MYOB 2FA (2 Factor authenticator) which is a 6 digit secure code which is part of MYOB security. You may choose phone or email – we recommend email as it will not involve the downloading of any apps.

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Step 2: Student to set up file online Once you have access to your file/account, you will be asked to enter your business name and industry.

Create the business name by using your own name (preferably your Surname), if desired a word to describe your company and ‘Security Systems and Services’. For instance, if your name is Jeff Noddy, your business could be named: ‘Noddy Security Systems and Services’. If you would like to add descriptive word here some examples: • • • •

Wen Wonder Security Systems and Services. Taylor Top Security Systems and Services. Smith Spy Security Systems and Services. Cleaver Covert Security Systems and Services.

If you like it be free to be creative with your company name. Note in this Information Document you will see ‘Noddy Security Systems and Services’ imagine instead that in your version you are entering your own company name.

Please also select (tick) þ the role as “Student or teacher.” (Note this protects your email inbox from receiving marking emails from MYOB). Then click ‘Get down to business” to continue. When you log into MYOB, make sure you choose to log in the software pack of ‘MYOB Essentials™’.

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Step 3 Entry of business details Open the ‘Business details’ page to update your business information. This can be accessed via clicking on the business name on the top-right of the screen to open up the account settings. Select ‘Business Details’. Use the following information to complete the required sections. Business name

Noddy Security Systems and Services (note – your file might already have a name like this OR feel free to enter adapt the name you have chosen previously for your company here, e.g. Taylor Top Security Systems and Services)

Trading Name

As Above

ACN Number

123 156 112

Client code

NSS 001

Contact Details

[Your choice of details – you could make this fictious as it’s just a sandpit environment and no one see this information - e.g. 159 Pitt St, Sydney NSW 2000, Phone: 02 8912 1234]

Financial Year

2020

Last month in financial year

June

Opening balance date

July 2019 - Do not click on “prevent changes prior to the lock date”

When you have finished, click

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Step 4 GST setting Stay on this page and click tab under the heading called “GST Settings”. Make sure that this has the ‘No’ option selected and this will remove GST from the company’s Invoices. Whereby the company’s invoices will simply state “Invoice”

What if I made a mistake and leave GST turned on? You can always come back to this area and edit business information to turn off the GST settings. Just come back to this tab and make the required changes and click “Save”.

Step 5 Report settings Click on the top tab with your business name, e.g. “Noddy Security Systems and Services” and then click on the option called “Report settings”. This area is where you can select your preferences for reporting and pre-set them. Note while generating reports you can at any time change these options within the report. On the “Report Settings” page setup the Accounting Method and Exceptions alerts as per the table below. Then click on the “User preferences” tab and select the options as per the table below: REPORT SETTINGS: Accounting Method

Accrual

Exception alerts

Show

USER PREFERENCES: Year-end adjustments

Include

Display negative amounts

With a minus sign -100

Other preferences

Select “Account No”, “Currency symbol” and “Cents”.

PDF Export

Open in a new tab

Others

Leave as default

When you have finished, click Step 6 Sales settings Click on the top tab with your business name, e.g. “Noddy Security Systems and Services” and then click on the option called “Sales settings”. On the first page called “Layout” in the “Field layout” drop-down list select the option “Services and items”. Then click “Save”.

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Section 2: Chart of Accounts, Tax codes and Opening Balances MYOB Essentials™ has a standardised chart of accounts for the convenience of users. In this section, you will learn how to view and edit the chart of accounts and enter the opening balance for your business.

Step 1: View the chart of accounts Click on the “Accounting” Tab and down to click on “Chart of accounts”. You can come back to this area at anytime and make edits throughout the company’s life. If you forgot to make a particular account you can always come back and create it here. Now, take a quick look at this default chart of accounts that have been pre-loaded into the account. Pay attention to the Account numbers, Account names and Account types. Although it is not regulated by any particular accounting standard, a chart of accounts is usually set up by following the convention: Assets account start being number with a ‘1’; liability accounts start being numbered with a ‘2’ and so on. This is based on a historical convention among the past practices of accountants. MYOB Essentials™ sets up default accounts that you can later on customise.

Step 2: Customise the chart of accounts Use the highlighted functions, as indicated below, to customise the chart of accounts by editing and adding. To delete accounts, you need to click into the Account name to open that particular one, then bottom left you can “Delete”. [Note your chart of accounts will not look like this, it depends on the industry type choose, just ignore the accounts listed below.]

There are a number of accounts you will be directed to delete, turn to inactive, some to modify and some to add in the next steps. If you don’t see a particular account in your MYOB Essentials™ account that you are directed to delete just ignore this direction. The reason you may not see these accounts could be because the business account was setup another industry classification other than retail and this turn created a different default set of accounts. You can navigated quickly between the accounts by using the tabs which filter to particular account types. Note that “Income” is the heading under which you will find the Revenue accounts that are recurring in the ordinary course of business whereas “Other Income” section will contain those irregular revenues and gains. Likewise the Expenses section is for regular recurring expenses in the ordinary course of business whereas “Other Expenses” section is where the irregular expenses and losses are located. The choice of classification is entirely at the discretion of managers of a company. 10 CRICOS Provider Code 00098G

1) Delete the following accounts: Account number 2-1100 2-1211 2-1542 6-1450 3-2000

Account name Credit Cards GST Liabilities Gift Vouchers Issued Filing Fees Owner’s Drawings/Personal Expenses

Tip: Use the ‘search’ function (e.g. search the account number) to quickly locate the account you want to delete. Set the following account as “Inactive”: 2-1212 GST Balance. To do this click on the name of the account within the chart of accounts, then on the “Edit account” page click on the button at the bottom called “Inactive account”:

This will hide the GST Balance account as we are not needed it for this company. We have assumed no GST. If you would like to see the other accounts that are currently set as “inactive” you can click on the “Show inactive” button on the Chart of Accounts page. Click off to once again hide the inactive accounts.

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2) Modify the following existing accounts (*as above Account #s may vary due to industry selected at set up). If no account exists then create a new account with these names: Number

Old account name

New account name

1-1110

Business Bank Account #1

FirstBank Savings Account

1-1320

Inventory

Inventory – Javas Ultra02 Systems

2-2105

Business Loan #1

FirstBank Business Loan

3-1000

Owner's Funds Introduced/Personal Income

Contributed Share Capital

4-1400

Sales

Sales – Javas Ultra02 Systems

3-8000

Retained Earnings

Retained Profits

6-1110

Accounting & Bookkeeping

Accounting Fees

For the following account change the number of the accounts as follows: Account Name

Old number

New number

Motor Vehicle

1-2510

1-2910

Accum. Depr Motor Vehicles

1-2520

1-2920

Sales – Javas Ultra02 Systems

1-1400

4-1000

When you have finished, click

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3) Create the following new accounts – use the button “Create account” Number

Name

Type

Parent

1-2610

Office equipment & computers

Fixed Assets

Property, Plant & Equipment

1-2620

Accum. Depr Office equipment & computers

Fix...