Group Project 1 BA2341A (dah edit)Account for non accounting student PDF

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BACHELOR’S DEGREE OF CUSTOMER SERVICE MANAGEMENT (HONS.)ACC407 - FUNDAMENTAL FINANCIAL ACCOUNTING AND REPORTINGGROUP PROJECT 1TOPIC: INTERMEDIATE FINANCIAL ACCOUNTING & REPORTINGPREPARED BY:EZRA DEBORA DONATUS 2021847538NOOR SYUHAIDAH BINTI MOHD SALIM 2021474398NURIN NAJWA BINTI MOHAMAD LIBRI 20...

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B ACHELOR’S DEGREE OF CUSTOMER SERVICE MANAGEMENT (HONS.)

ACC407 - FUNDAMENTAL FINANCIAL ACCOUNTING AND REPORTING

GROUP PROJECT 1 TOPIC: INTERMEDIATE FINANCIAL ACCOUNTING & REPORTING

PREPARED BY: EZRA DEBORA DONATUS

2021847538

NOOR SYUHAIDAH BINTI MOHD SALIM

2021474398

NURIN NAJWA BINTI MOHAMAD LIBRI

2021491684

NUR HIDAYAH BINTI ABDUL RAHIM

2021471118

GROUP: BA2341A

PREPARED FOR: SIR SYED ISKANDAR ZULKARNAIN B. SAYD IDRIS

DATE OF SUBMISSION: 18th DECEMBER 2021

Acknowledgement. Alhamdulillah. First of all, we would like to express our gratitude to God for allowing us to complete our homework, which was assigned to us by Principle of Accounting’s lecturer, Sir Syed Iskandar Zulkarnain B. Sayd Idris. This task was completed with the help of all group members, despite a minor issue that arose throughout the course of the project. Fortunately, all of the issues were resolved, and we were able to adjust effectively and prudently. Apart from that, we would like to express our gratitude to Mr Muhammad Shaufi Bin Che Daud, the owner of Aurahak Enterprise, for providing us with the opportunity to learn about the business and for informing us about the events that occurred in the business that were related to the principle accounting, because without him and his assistance, we would not be able to complete the project successfully. On the other hand, we would like to express our gratitude to the lecturer of Principle of Accounting, Sir Syed, for providing a clear explanation of what our group and the other groups should and should not do. Also, thank you for your patience and guidance as we worked on the project. Finally, a thousand thanks to all of the members of our group for their excellent cooperation and constant willingness to assist one another in order to ensure that none of us gets into difficulties while working on this project. Thank you for always sticking together and working hard to complete an excellent project with all of your resources and responsibilities. I'm hoping that all of the funds will be beneficial to both us and our group endeavour. We also want to express our gratitude to all of our classmates for their assistance in completing our group project. They are always providing us with suggestions and feedback on our product, allowing us to develop it in a variety of ways.

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Table of content.

Contents 1 2

Introduction

4

Content: a.

background of the organisation

5

b.

Classification of business items ● Assets ● Liabilities ● Drawing & Capital ● Revenues ● Expenses

6-12

c.

Characteristics of the business

d.

Process of the business

e. Identification of strength and weaknesses of the business

3

Pages

13 14-15 16-18

3

Methodology: Interview (questionnaire/verbal)

19

4

Conclusion

20

5

Bibliography or references

21

6

Appendix

22-23

Introduction. The task set to us was to conduct research into how a certain business uses accounting principles and how the owner applies them to his company in order to create financial statements. We want to determine if the businesses in our study employ and use the proper accounting system. We also opted to conduct study on Aurahak Enterprise, a sole proprietorship business. This is the company that makes Air Mawaddah, which is a brand of packaged drinking water. Our goal as a group was to learn how a company is founded. We were also interested in learning more about the company's history, such as who the owner is, as well as the different types of businesses and their qualities. According to our research, Aurahak Enterprise is a sole proprietorship that was established in the year 2018. The company also manages the country's drinking water supply. The owner decided to make drinking water because he wants to help the government improve the development and progress of drinking water delivery services in Kedah, Malaysia, in particular. Aurahak Enterprise is also committed to becoming a competitive company in taking advantage of government opportunities, ensuring that every service offered is of high quality and productivity.

4

Company Background Aurahak Enterprise began operations in January of 2018. Encik Muhammad Shaufi Bin Che Daud is the owner of Aurahak Enterprise. In general, the company makes Air Mawaddah, a packed drinking water product. It focuses on producing clean, holy, and halal items that have been approved by the Ministry of Health (MOH). Air Mawaddah was created by the late Encik Che Daud Bin Che Mat, the father of Encik Muhammad Shaufi, for the aim of curing his own body, which was suffering from eight ailments at the same time. With the help of Dr. Nordin Darus, the founder of the Worldwellness Network and Aura Cure Therapy, he was able to cultivate and imitate the benefits and effects of Air Zamzam till the creation of a therapeutic drink named Air Mawaddah. Air Mawaddah products are distributed through a number of intermediate channels, including stockists, agencies, and retailers. To avoid scrambling the sales region, the corporation will assign distributors as needed in each district and state. Air Mawaddah has established a strong presence in Peninsular Malaysia, with plans to expand to Sabah and Sarawak in the near future.

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Classification of business items. Assets Assets are properties owned by a business which have future economic value that can be measured and can be expressed in currency. There are two types of assets, non-current assets and current assets. There are three sorts of non-current assets. Investment, Tangible non-current asset, and Intangible non-current asset Land and buildings, machinery, office equipment, furniture and fittings, motor vehicles, and other tangible non-current assets are examples of tangible noncurrent assets. Assets that have no physical existence are known as intangible non-current assets. Franchise, goodwill, patent, trademark, and so forth. The sum of money deposited in other organisations with the hopes of receiving additional money in the form of a return is referred to as an investment. As an example, consider quoted and unquoted investments, as well as a five-dollar deposit (placement period of more than 1 year). Current assets are cash or cash-like assets that can be converted into cash within a year. During an accounting period, these assets alter their form on a regular basis. Inventory or stock, accounts receivable or debtor, cash in the bank, and cash in hand are all examples of current assets. For assets in Aurahak Enterprise also classified by two types of assets. For non-current assets, Aurahak Enterprise owned assets such as a vehicle which is a van and truck for delivery of the stocks to the retail shop and customers. At the first phase of raising the company, they used to use the van that was worth in the range of RM45 000. Machinery like a machine to process the water and bottles also counted as non-current assets. furniture like tables and chairs in the office and the warehouse also counted as non-current assets that were owned by Aurahak Enterprise. For, fixtures and fittings like the furnitures, fan, light in office and warehouse also categorised as non-current assets in Aurahak Enterprise. Also, Aurahak’s office and warehouse is also known as a premise/building that is owned by the company as a non-current asset. Besides, Aurahak Enterprise also has current assets such as its account payable, inventory, cash in hand and cash in bank. Account receivable is known as the retailer who purchased the stocks in a bundle on credit.

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The pictures of non-current assets in Aurahak Enterprise. 1) Vehicles.

7

2) Machinery

8

Liabilities A company's liabilities are its financial obligations to its creditors. Non-current liabilities and current obligations are two types of liabilities. On the credit side of the ledger, the increase in liabilities will be noted. Liabilities are funds provided to the business by third parties for the acquisition of assets. As a result, it is the company's financial responsibilities to third parties. Non-current liabilities and current obligations are the two categories of liabilities. Non-current obligations are sums owed by a company to third parties that must be paid over a long period of time, usually more than a year. Long-term loans, property mortgages, and debentures are examples. Amounts owed by a company to other parties, such as banks and creditors, that must be reimbursed within a year. Short-term loans, bank overdrafts, creditors, and accounts payable are only a few examples. Aurahak Enterprise does have a non-current liability from the suppliers which is from the machine factory, and delivery transportation. Since the amount of the machine of processing the mineral water is above RM20 000, Aurahak decided to repay the loan within more than one year. However, Aurahak Enterprise does not have any debt of current liability. As stated by the owner, the business’s stock is known as raw material that can be obtained using the owner’s money.

9

Drawing. Drawing is the act of a business owner withdrawing cash or other assets from the company for personal use. Drawings can include anything that is deemed a commercial asset, such as products or equipment that is removed from the business for personal use by the owners, as well as cash or goods withdrawn from a business account. Any sort of withdrawal diminishes a company's capital or owner's equity. Drawings, on the other hand, are not considered a commercial expense. If the drawing is growing, it will be recorded as a debit in the financial account. Aurahak enterprise’s owner always makes a drawing once in a month for his personal use. However, it is always be recorded in the financial statement every time the owner withdraws the cash from the business for personal use. Besides, Aurahak enterprise’s owner also takes out some products or equipment for personal use in 2-3 times in a year. The acts are also recorded to make the financial of the business more accurate. Capital. Funds raised to support a certain firm or project are referred to as capital. Capital can also refer to a company's accumulated wealth, which is represented by its assets minus its liabilities. Capital can also refer to a company's shares or ownership. Cash in bank accounts, tangible machinery such as production equipment, machinery, storage buildings, and other types of capital are all examples of capital. Raw materials are not considered capital in the production process. Aurahak Enterprise started the business, beginning with brought in the capital amounted RM50 000. Plus, the owner also brought in some of the owner’s own assets into the business such as first vehicle and office equipment. After a few years, Aurahak enterprise’s owner injects another RM50 000 of capital into the business. So in total of the capital, worth RM100 000 of capital the owner had brought in, in this year.

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Revenue Funds raised to support a certain firm or project are referred to as capital. Capital can also refer to a company's accumulated wealth, which is represented by its assets minus its liabilities. Capital can also refer to a company's shares or ownership. Cash in bank accounts, tangible machinery such as production equipment, machinery, storage buildings, and other types of capital are all examples of capital. Raw materials are not considered capital in the production process. Revenues are the revenues that were earned from the primary business activity. For example Aurahak Enterprise that sells mineral water gains the revenue/sales from selling the product, which is the mineral water. Aurahak Enterprise received the revenues from its daily business transaction. Everyday, Aurahak Enterprise business set the target to achieve at least RM 2000 of revenues. But in fact, this business successfully to achieve more than the target which is around RM 3000 to RM 4000 each day. That means it makes the yearly revenue almost RM 50 000.

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Expense. The cost of the assets or services utilised to generate revenue is referred to as expense. Operating expenses and non-operating expenses are the two types of expenses that can be categorised. Operating expenses are costs directly related to the day-to-day operations of a business. Selling and distribution expenses, general and administrative expenses, and financial expenses can all be classified into this category. Non-operating expenses are those that aren't directly related to the day-to-day operations of a firm. Interest on a bank loan, for example. Expenses are the costs of goods or services consumed in the process of earning money. A business must incur expenses that are required for the business to continue to operate, but for which there is no long-term gain. Purchase of commodities, salaries, interest expense, rent expense, and discounts, for example, are all permitted. Aurahak Enterprise has a lot of operating expenses. For example, utility expense for above RM 1 000 monthly, worker’s salary for above RM10 000 monthly, rent expense on the premise for above RM 7000 monthly, travelling expense for RM1000 monthly, insurance expense for RM1200 monthly, and general expense for RM 150 monthly. Aurahak Enterprise has also incurred certain non-operating expenses. Depreciation of assets and tax expense, for example.

12

Characteristics of visited business Aurahak Enterprise is a one-person operation. The simplest type of business to start is a sole proprietorship. A sole proprietorship may easily be identified from other business types since the business usually has the phrase 'enterprise' after its name, just like Aurahak Enterprise has the word 'enterprise' behind its name. Aurahak Enterprise, on the other hand, is a company that makes Air Mawaddah, a type of packaged drinking water. The Aurahak Enterprise's main focus is on the supply of drinking water and transportation services. Aurahak Enterprise also provides truck transportation and drinking water to customers all around the country. The company is registered with Suruhanjaya Syarikat Malaysia as a sole proprietorship. Encik Muhammad Shaufi Bin Che Daud is the only owner of Aurahak Enterprise, and the company's first financing came from the owner's own savings. The business was thereafter managed by the proprietor with the assistance of his employees. The assets and liabilities of Aurahak Enterprise are limitless. It may have as many assets and obligations as it desires, depending on the financial capacity of the owner. Finally, the firm has the feature that all earnings will be earned by the owner. The owner is also responsible for the company's liabilities.

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Process of the Business The accounting process is the original document that compile all the transactions from each company to get financial statement in the end of the process. It involves a specific steps like source documents, journal, ledgers and many more. Source Documents First of first, the accounting process will start after the transactions has been carry out to the company which are taken from source documents. For example, Aurahak Enterprise’s source document for the recording goods purchased is the supplier’s invoice from the company’s purchased. The company always use the invoices, bills, and receipts for the transaction, and they not always use the other source documents. Books of Journal Next, the transaction will continue to be recorded in the books of prime entry such as Cash Books and Journal. However, Aurahak Enterprise just use the books of journal to record all the transactions. There are so many types of journals that the company use for the transaction’s record like purchase journal, general journal, sales journal, cash payment journal, purchase return journal and sales return journal. Ledgers After all the transactions are recorded to the journal, it will continue with the ledgers to confirm either a debit or credit on T-account. Aurahak Enterprise always use the general ledger after completing the books of journal. Mr Muhammad Shaufi, the owner of the company uses these ledgers to summarize the individual transactions that listed on the books of journal. Trial Balance

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Trial balance is the important thing to do after done the ledgers which is the owner will do another report to balance in each of the record. It will be use at the end of the month to check whether all the transactions have been recorded correctly or not. Every month, owner of Aurahak Enterprise, Mr Muhammad Shaufi will focus to balancing the business’s account so that he knows all the transactions is recorded in perfectly. Adjusted Entries It is normal if the company will do the adjustment entries at the end of the month including Aurahak Enterprise. Adjustment may help Mr Muhammad Shaufi to knows if he pays expenses before he actually incurred. They often result in inventory adjustment or depreciating assets which is important to balance the account. Adjusted Trial Balance The adjustment of trial balance is to show the updated balance after done doing the adjustment entries. Other than that, adjustment trial balance is used to prepare the closing entries. Mr Muhammad Shaufi thorough on doing the adjustment because this adjustment will continue with the last and most important part of accounting which is financial statement. Financial Statement Finally, the last process of the accounting process is the financial statement that can be prepared by the list of balances from the trial balance. Owner of Aurahak Enterprise commonly do the financial statements of profit and loss but at the same time, he also does the statement of financial position. For example, are assets, liabilities, and equities. Reversing Entries Reversing entries is an optional to the owner of the company at the beginning of month. Aurahak Enterprise always do the reversing entries because it is an entry to undo an adjusting entry. It will be easier for Mr Muhammad Shaufi to keep on track for all the transactions from month to month because he sure that reversing entries are a way to handle the transactions.

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Strength and weaknesses of the business Internal corporate strengths and weaknesses are things you have some influence over and can modify. Who is on your staff, your patents and intellectual property, and your location are all examples. External opportunities and risks are those that occur outside of your firm, in the bigger market. Internal corporate strengths and weaknesses are things you have some influence over and can modify. Who is on your staff, your patents and intellectual property, and your location are all examples. External opportunities and risks are those that occur outside of your firm, in the bigger market. Therefore, we have identified some of the strengths and weaknesses found in the Aurahak Enterprise business. Strength

i. Strong employee attitudes We discovered that Aurahak Enterprise personnel are exceptionally committed and diciplined. They pay close attention to the industrial processes. They take great care of the environment in terms of cleanliness and also handle the production process carefully since their products are made with the recitation of the holy verses of the Quran. When employees are happy and engaged, attitudes and productivity are more likely to be positive. By effectively managing the workplace and employees, a company can positively shape attitudes and even improve their company's performance.

ii. Excellent customer service

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The most important rule in providing excellent customer service is to be friendly. Providing excellent ...