QUICKBOOKS ASSIGNMENT

How do electronic accounting packages help people manage a business?

Task 1 Concept Map:

Categories 1 2 3 4
Exercise 1, Excel Test Assets (own)
FIXED COSTS

Examples
Land, car/boat, house, computer Loan, rent, council rates Staff, electricity, advertising, insurance Price x quality

Liabilities (owe)
VARIABLE COSTS long term

Expenses
short term

Revenue

Item
Rent Electricity Car House Mortgage Computer Rubber Land Wages paid Salaries paid Distribution costs Sales Commission Received Reputation Bridge Broadband network Repairs to broadband Insurance Capital A4 paper

Classification
Liability Expense Asset Asset Expense Asset Expense Asset Liability Liability Liability Revenue Revenue Asset Asset Asset Expense Expense Asset Expense

Y/N
X - Expense

Reasoning
gets used up

X - Liability

fixed cost/long term

X - Expense & Liability X - Expense

variable cost/runs out business choice variable cost/runs out

X - Owners equity

Definitions: Asset something that is owned and is a fixed cost Liability something that is owed, is a variable cost and usually long term (+ 5years) Expense something that is paid, usually short term Revenue something that is paid but are used up/run out Owners equity owners investment in the business

Use the following information to complete a balance sheet for Super Car's Business (owned by Jaimie)

1 2 3 4 5 6 7 8

Jaimie invested $300000 into the business Paid $70000 to buy a car with cash Purchased $2000 worth of stock on credit Paid $1500 cash to suppliers to reduce Accounts Payable Purchased $5000 worth of stock on credit Purchased a delivery van on credit worth $30 000 Jaimie withdrew $5000 cash and put it in his personal bank account Purchased furniture on credit worth $ 6250

Exercise 2, Balance Sheet:

Assets

Liabilities and Owner's Equity

Bank Car Stock Accounts payable Van Furniture

187250 70000 7000 1500 30000 6250

Capital Credit

297000 5000

302000

302000

Exercise 3, Classification
1) Classify each of the following items as either an asset, liability, owner's equity, revenue or expense

Item Cash Bank account advertising expense land stock fee income sales car loan capital supplies expense rental income wages expense mortgage motor vehicle electricity accounts receivable account payable

Classification Asset Asset Expense Asset Asset Revenue Revenue Liabilitity Owner's equity Expense Revenue Expense Liabilitity Asset Expense Asset Liabilitity

Why? Something that the business owns Money is something that the business owns Variable cost and is used up in the short term Something that the business owns Something that the business owns Money coming in to the business Money coming in to the business Money owed to someone else over the long term money invested into the business by the owner supplies are purchased and then used up also VC money coming in to the business Variable cost and is used up in the short term Fixed cost and paid over the long term Something that the business owns VC paid in the short term and is used up Money owed to the business by customers Money the business owes to other businesses paid in the

long term drawings rental expense stationery Owner's equity Expense Expense Owner withdrawing some of their initial investment out of the business Paid in the short term and is used up VC and used up in the short term

Exercise 3, Assets, Liabilities and Owners Equity

Assets 56000 *40500 42800 *101900 18200

Liabilities 8000 24000 *36050 12300 16700

Owners Equity

Exercise 5, Peter Smiths Balance Sheet

* 48000 Show the following transactions in the balance sheet on the right. 16500 6750 89600 *1500 The first transaction is done for you. Date Feb-01 Feb-02 Feb-08 Feb-13 Feb-16 Feb-19 Feb-24 Transaction Jaimie invested 300000 into the business Paid $150000 cash to buy a building for the business Purchased $1700 stock on credit Paid $900 off Accounts Payable Purchased land worth $180000 with a bank loan Paid $750 off Accounts Payable and $280 for more stock Owner withdrew $2000 cash.

Exercise 4, Class Balance Sheet

SEXY BOY INDUSTRIES

Assets Bank Stock Shop Car 5000 5000 50000 50000 Liabilities + OE Bank loan Car loan 50000 5000

Balance Sheet of Peter Smiths Business:

Assets Item Bank Amount 146070 150000 1980 180000

Liabilities + Owner's equity Item Capital Accounts Payable Bank Loan Drawings Amount 300000 50 180000 -2000

Capital

10000

Building Stock Land

60000

60000
Total Assets 478050 Total L and OE 478050

This calendar was used to predict the dates to write the process journals/plan so that I knew exactly what the date was and could document them more accurately.

Situation: As an employee for a company, Fuzzy Finance that offers training for workers of large organisations it is my duty to offer a course for these recruiters. QuickBooks is one of the courses that is provided. Problem: I have been assigned the duty, from the Finance Manager of Fun Facts, of designing a demonstration activity that can be used to provide education to an employee who has no knowledge of QuickBooks. Task 2 Plan: Task Assignment distributed Task 1 Due Date 4 June 11 June x x x Progress Check/Changes made I did not attend school this day so therefore, the assignment was received on the 5 June. During this week various exercises were also completed in order to practice and understand how balance sheets work and are collated. Microsoft Excel was used for these tasks and spreadsheets.

Task 2 Task 3 Task 4

12 June 16 June 18 June

x x x

The investigation section was completed on the 17 June. This allocated extra time to complete the next task/section for the assignment. *Investigation Progress Check - deadline met

Task 5 Task 6 Task 7 Task 8 Task 9 Task 10 Task 11 Hand in Assignment

6 July 13 July 16 July 31 July 3 August 6 August 11 August 13 August

Task 3 Design Brief: This assignment involves the investigation of Financial Management and how it relates to the collection, organisation and interpretation of financial information in order for effective decision making within a business. It is evident that using computerised accounting applications does not necessarily require a great understanding of accounting. However, it does entail practice in the use of a range of procedures and is regularly a challenging task for a new recruited worker to understand and comprehend the accounting system as well as fulfil their other responsibilities. Hence, I have been contacted by Mr Eroom, the Finance Manager of Fun Facts which is a large renowned book store on the Gold Coast. He has requested that I provide his new employees with a demonstration activity that can be used to provide instructions to the workers that have no understanding of the program QuickBooks. Mr Eroom appears eager to hire my firm to provide a complete four week QuickBooks tutorial. However, he is hesitant to pay the full cost of $10,000 unless provided with a sample of a demonstration lesson that shows the quality of my instructional materials. Mr Eroom has provided me with some requirements that the introductory exercise must include for him to consider using the course. These requests include the following; At least twenty different transactions Cash, credit and cheque transactions Capital contributions Both assets and expense purchases Sales recipes Payments by instalment Collections from debtors and creditors Work solutions with a) a complete list of transactions b) a profit and lost statement c) a balance sheet The materials provided for the task include A4 paper and the resources and tools (equipment) eligible for use is the QuickBooks program and Word Processing Applications such as Microsoft Word for displaying the final assignment and Microsoft Excel for completing practice exercises and balance sheets. Task 4 Research: a) What are expenses? An expense is the amount/s paid for goods and services that may be currently tax deductible.
Anon, 2009. WordNet Search. [Internet] Available: http://wordnetweb.princeton.edu/perl/webwn?s=expense [Accessed 17 June 2009] Anon, 2008. Expenses.[Internet] Available: http://www.co.washoe.nv.us/repository/files// [Accessed 17 June 2009]

b) What are capital purchases? Capital purchases include; business assets purchases such as machinery, cash registers, computers and cars (these items are also referred to as plant and equipment, and land and buildings. These assets can be new and may be imported. Things that are not capital purchases include; trading stock, normal running expenses such as stationery and repairs, or equipment rentals or leases.
Australian Government, 2009. What are Capital Purchases. [Internet] Available: http://www.ato.gov.au/businesses/content.asp?doc=/content/42132.htm&page=48&H48 [Accessed 17 June 2009] FinancialStability.gov, 2009. Capital Purchase Program. [Internet] Available: http://www.financialstability.gov/roadtostability/capitalpurchaseprogram.html [Accessed 17 June 2009] University of Calgary, Financial Services, 2009. Financial Services. [Internet] Available: http://www.ucalgary.ca/financial/controller/asset_management/capital

[Accessed 17 June 2009]

c)

What is a sales revenue? Income from sales of goods and services, minus the cost associated with things like returned or undeliverable merchandise.
Nelson, T. (2006) Nelson Business Education. Victoria: Nelson Australia Pty Limited. Moneychimp, 2009. Sales Revenue. [internet] Avialable: http://www.moneychimp.com/glossary/sales_revenue.htm [Accessed 17 June 2009]

d) What is Goods and Services tax? The Goods and Services Tax (GST) is a broad-based tax of 10 per cent on the sale of most goods and services and other things in Australia. You must register for GST if; your business has a GST turnover of $75 000 or more ($150 000 or more for non profit organisations), you provide taxi travel as part of your business, regardless of your GST turnover. By registering for GST, you will be entitled to claim input tax credits for the GST included in the price paid for things that you acquire for use in your business. If you are not registered, you will not be able to claim input tax credits.
Australian Government, 2008. How GST works. [Internet] Available: http://www.ato.gov.au/businesses/content.asp?doc=/content/25378.htm [Accessed 17 June 2009] Business.gov.au, 2009. Goods and Services Tax.[Internet] Available:http://www.business.gov.au/Business+Entry+Point/Business+Topics/Taxation/Taxes+explained/Goods+and+Services+T ax.htm [Accessed 17 June 2009]

e) What are Capital contributions? A Capital contribution is a contribution that increases the equity capital for a company, but does not increase the amount of outstanding shares.
InvestorWords.com, 2008. Capital Contributions. [Internet] Available: http://www.investorwords.com/6437/capital_contribution.html [Accessed 17 June 2009] Murray, J. 2009. Capital Contribution. [Internet] Available: http://biztaxlaw.about.com/od/glossaryc/g/capitalcontrib.htm [Accessed 17 June 2009]

f)

What is difference between cash, credit and cheque transactions? A cash transaction uses currency (dollars and cents) to pay for products or services. A credit transaction means that you are posting the transaction to a credit card or loan. In this case, the merchant gets paid (often the next day) for products or services rendered, and you pay the loan issuer or credit card company back. Sometimes, there are fees involved (a percentage of the transaction amount) to use a credit card - especially if you don't pay the issuer back within the established terms, which is called interest and finance charges.
Bargaineering, 2009. Cash, Cheques or Credit. [Internet] Available: http://www.bargaineering.com/articles/cash-cheques-or-credit-when-traveling-internationally.html [Accessed 17 June 2009] Queensland Professional Credit Union, 2009. Fees and Charges and Free Services. [Internet] Available: http://www.qldprofcu.com.au/Doc/Fees%20and%20Charges.pdf [Accessed 17 June 2009]

g)

What is the difference between payments by instalments, debtors and creditors? Instalment orders An instalment order allows you to pay off a debt in set amounts at set intervals. You can get separate instalment orders to pay off a number of debts. These orders can help you, but the process can also be used to wear you down and increase costs if you cannot manage the payment. Debtors and creditors can both apply for instalment orders. Debtor applications

If you have looked at your finances and decided that you can afford to repay a certain amount of money, applying for an instalment order may have some advantages for you. Once the creditor gets the instalment order they must stop trying to get money from you until the court makes a final decision. If a court grants your application for an instalment order, and you keep making the payments, the creditor cannot take any other action. The creditor can apply for the order to be changed or cancelled if; there is a substantial improvement in your ability to pay or it can be proved that you gave inaccurate information to the court. Creditor applications A creditor who has a judgment for a debt can also apply for an order forcing you to repay a debt by instalments. A creditor would be likely to do this because payment over time is better than no payment or irregular payment.
Commonwealth of Australia, 2007. Debtors and Creditors. [Internet] Available:http://westone.wa.gov.au/toolboxes/bookkeeping/toolbox11_06/units/account_systems/html/accruals_debtors_cases tudy.htm [Accessed 17 June 2009] Victoria Legal Aid, Lawyers and Legal Services, 2009. Instalment orders, Debtor applications and Creditor applications. [Internet] Available: http://www.legalaid.vic.gov.au/1786.htm [Accessed 17 June 2009]

h) What is the difference between profit and loss? Profit and loss accounts are accounts compiled at the end of an accounting period to show gross and net profit or loss. Income statement, also called profit and loss statement (P&L) and Statement of Operations, is a company's financial statement that indicates how the revenue (money received from the sale of products and services before expenses are taken out, also known as the "top line") is transformed into the net income (the result after all revenues and expenses have been accounted for, also known as the "bottom line"). The purpose of the income statement is to show managers and investors whether the company made or lost money during the period being reported.
Brennan. M, 2009. Glossary of Business Terms. [Internet] Available: http://www.swantower.com/marie/essays/business/glossary.html [Accessed 17 June 2009] Anon, 2009. Profit and Loss. [Internet] Available: http://wordnetweb.princeton.edu/perl/webwn?s=profit%20and%20loss [Accessed 17 June 2009]

i)

What is the different between assets and liabilities? Assets and Liabilities, terms used in economics and accounting. Assets represent property or rights to property and liabilities are debts owed to others. Assets and liabilities together determine the wealth of an individual, a firm, or a nation.
Encarta, 2009. Assets and Liabilities. [Internet] Available: http://encarta.msn.com/encyclopedia_761579934/assets_and_liabilities.html [Accessed 17 June 2009] Le Moine. J, 2004. Accounting Advice: Assets, Liability and Equity. [Internet] Available: http://www.lemoineandjames.com/gaap/22ale.html [Accessed 17 June 2004]

Task 5 Design Specification: As an employee for Fuzzy Finance, it is my duty to provide a training course for employees for successful organisations. The Finance Manager of Fun Facts, Mr Eroom has contacted me and requested that I create a complete four week QuickBooks tutorial. However, he is hesitant to pay the full cost of $10,000 without a demonstration activity that can be used to provide instructions to an employee who has no knowledge of the QuickBooks program. After researching various aspects of balance sheets and discovering the workings of the program I now have a better understanding of how to approach the task which has increased the achievement of the outcome.

It has been revealed that there has been a rapid increase in the last decade in the number of businesses using computerised accounting applications to document and organise financial data such as sales an expense transactions and calculation of the assets and debts of the firm. The reasoning for the dramatic increase of using this approach is because the applications provide standard systems of categorising economic transactions and will automatically assemble the statistics to product financial reports essential at the end of the financial year. From the research is can be evident that the demonstration activity produced must be efficient, understandable and engaging in order for the instructions it provides to be understood and interesting to follow. The example transactions must be relevant and significant for a bookstore worker which will enable the user to relate to the situations and become more comfortable recording the types of transactions they may encounter. This approach will allow the employee to practice manoeuvring the amounts of cash in situations that they are presumably to come to terms with during their career. The information the demonstration activity displays must be understandable, easy to comprehend and follow. Therefore, the instructions it offers must be shown using a program that allows the user to manoeuvre to the different steps, hence, Microsoft PowerPoint will be used. This program will allow the employee using the demonstration activity to easily convert from one step to another by using the slideshow features. This program also allows images to be inserted in the slides which enables the user to view the steps visually that have to perform in order to complete that particular transaction. Research has shown that some people understand directions more clearly if they are displayed visually rather than reading the steps, this form of presenting the information will therefore appeal to more people increasing the success of the tutorial. Another requirement the QuickBooks tutorial should entail that was discovered from the research collated, is that the employees using the demonstration course book need to understand the difference between assets, liabilities, revenue, expenses and owners equity. This will ensure that the employees learning to use the QuickBooks program understand where to put the cash amounts. Ensuring that they recognize these distinctions will result in the success of the balance sheet and later the business. NEEDS Business 1 (Fuzzy Finance): The company I work for needs to supply an efficient QuickBooks demonstration activity for the company, Fun Facts employees. The success of the course will be determined by the detail the information is displayed in and also how easy it is to comprehend when translating the instructions on the QuickBooks program. The tutorial that the business provides needs to meet the needs of the intended buyer in order for the company to make a profit. Business 2 (Fun Facts): The consumer business, (the business interested in purchasing the product) Fun Facts needs to have a tutorial of how use QuickBooks. The business must also feel confident that the product purchased is successful and works. Employers: The employers need to be able to trust that the QuickBooks course is efficient and teaching their employees how to use the program. The employees accuracy will determine the success of the business and result in the profit the company receives from the customers. The employers need to know that the course demonstrates the right information and is teaching the employees instructions that will be used during their working careers. The employers satisfaction with the tutorial will ensure that the company continues to use Fuzzy Finances training programs and therefore, making a profit for Fuzzy Finance. Employees: The employees need to be able to use the functions easily and properly to create balance sheets using the QuickBooks programs in order for them to do their job properly. Their accuracy will determine how trustworthy the business is and impact on the profit the business makes. Customers: The customers need to have suitable and precise balance sheets as their money is of great value to them.

Customers need to know where they are spending and saving their money, which essential for all financial planning even when purchasing books. The customers satisfaction entailing the balance sheets accuracy will determine their decision on continuing to buy from the store. This factor will contribute to the profit the business makes as the amount of customers purchasing books will verify the amount of money coming into the business.

TESTING The demonstration QuickBooks course will be tested by inviting members of the public to trial the tutorial. Two participants will be asked to follow the instructions provided by the QuickBooks tutorial and use the information to complete a balance sheet. The success of the demonstration activity will be determined on whether the participants can comprehend the information and correctly collate a balance sheet according to the scenario provided. The tutorial will be successful if the balance sheet displays the correct amounts under each appropriate heading and therefore, the course will be appropriate for employees at Fun Facts to use and meet the requirements set forth by the Finance Manager Mr Eroom.