Accounts Receivable and Gst Essay

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Words: 2598
Pages: 11

ACCT102-14A: Introductory Financial Accounting
ACCT209-14A: Accounting and Managerial Decision Making

SERIOUS SCIENCE

Case Practice Set 1

Part 1

This material is made available for study purposes only for ACCT102-14A: Introductory Financial Accounting and ACCT209-14A: Accounting and Managerial Decision Making at the University of Waikato and use for other purposes is an infringement of copyright.

Assessment Checklist

Assessment
What is required to be handed in
Working
date
Due date for hand in
Chart of Accounts
Week 3
17 March
Week 4
24 March
All journal entries from source document data
Week 4
24 March
Week 5
31 March
Using a file with the correct journals provided:
Journal entries posted to the general ledger and subsidiary ledgers
Subsidiary ledgers reconciled to control accounts
Trial balance
Week 5
31March

Week 6
7 April

Using a file with a correct trial balance
Financial statements
Week 6
7 April
Week 9
28 April

Introduction
There are two objectives in this assignment:
Students completing this assignment will demonstrate understanding of
1. The accounting cycle
2. Excel spreadsheet use in analysing accounting information
The assignment focuses on a small business registered for GST on the invoice basis.
Students will use Microsoft Excel templates to show the recording and processing of accounting input data through to the preparation of financial statements.
Background
Serious Science is a sole proprietor entity owned by Bill Nigh. The entity sells science kit sets for kids to a wide range of customers. Sales are made to individual customers for cash and to business customers on credit. Bill Nigh has asked you to use spreadsheets to process his accounting data as he can use these as a basis for developing an accounting system for Serious Science.
GST information
Serious Science is registered for GST on the invoice basis using a two-month period. Bill Nigh is mainly concerned that the system you set up follows generally accepted accounting principles and that the financial statements will be prepared on an accrual basis.
You are required to keep accurate records of GST Received (Output tax) and GST Paid (Input tax) but you are NOT required to prepare the GST return.
Being registered for GST on the invoice basis means GST is accounted for when Serious Science receives or issues an invoice or receives or makes a payment, whichever comes first. This is important when recording payments to accounts payable/creditors and receiving payments from accounts receivable/debtors. Except for any discount received/given these payments DO NOT have GST as the GST is accounted for when the invoice is initially recorded.

Inventory information
Serious Science uses a periodic inventory system. This means the Inventory account in the general ledger is only up-dated when a physical stock-take is completed. During the month inventory purchases are recorded in a purchases expense account and inventory sales are recorded in a sales revenue account. No ongoing record is kept of cost of goods sold. Cost of goods sold is determined in the Income Statement using opening and closing inventory and purchases/purchases returns and freight inwards information. Ensure you are familiar with this calculation in a periodic inventory system. It is illustrated in chapter 9 of your text book.
Journals
Serious Science has the following manual journals in use:
Journal name
Used to record
Cash Receipts
All receipts of cash, including cash sales totals from cash register summaries
Cash Payments

All cash payments including direct debits, online banking bill payments, automatic payments, EFTPOS etc
Sales
All credit sales transactions from invoices issued
Purchases
All credit purchases transactions from invoices received
General
All other transactions including returns of inventory

Using Excel
All calculations are required to be made in the…