A Step by Step Approach to Preparing Financial Statements for Non-Reporting Entities using MYOB AccountRight v19

Transcription

1 A Step by Step Approach to Preparing Financial Statements for Non-Reporting Entities using MYOB AccountRight v19 Copyright Notice: Copyright 2011 Software Publications. All rights reserved. No part of this material may be reproduced or copied in any form or by any means (graphic, electronic or mechanical, including photocopying or by information retrieval systems) without permission in writing from Software Publications. Originating Author: Marian Brown Dip T [Commerce], MICB BAS Agent Cert IV Workplace Training and Assessment, Cert IV in Financial Services [Bookkeeping] MYOB Certified Consultant for 16 years MYOB Accredited Author, MYOB Accredited Trainer Revised August 2011 Leanne Berry, MICB Cert IV Workplace Training and Assessment, Cert IV in Small Business Management, Cert IV in Frontline Management, Cert II in Quality Management MYOB Certified Consultant for 6 years MYOB Accredited Author, MYOB Accredited Trainer, Member MYOB Partner Advisory Group BAS Agent The Numbers Game leanne@thenumbersgame.com.au Publishers: Software Publications Pty Ltd [ABN ] Unit 10, 171 Gibbes Street Chatswood NSW 2067 Phone: Web address: ISBN Printed August 2011 FNSACC404A Prepare financial statements for non-reporting entities Software Publications 2011 FNSACC404A Prepare financial statements for non-reporting entities Index i

2 Copyright/Trademark Information: MYOB, MYOB AccountEdge, MYOB AccountRight, MYOB AccountRight Plus, MYOB BusinessBasics, MYOB FirstEdge, MYOB M-Powered, MYOB M-Powered Services, MYOB M-Powered Bank Statements, MYOB M-Powered Invoices, MYOB M-Powered Payments, MYOB ODBC Direct, MYOB PowerPay, MYOB AccountRight Premier and MYOB AccountRight Enterprise are registered trademarks or trademarks of MYOB Technology Pty Ltd and their use is prohibited without prior consent. Ceedata, Solution 6 MAS and Xlon are registered trademarks or trademarks of Solution 6 Holdings Limited, a member of the MYOB group. Bpay is a registered trademark of Bpay Pty Ltd, ABN MasterCard is a registered trademark of MasterCard International Inc. Microsoft, Access, Excel, Internet Explorer, Office, Outlook, Smart Tags, Windows and Word are registered trademarks or trademarks of Microsoft Corporation in the United States or other countries. VISA is a registered trademark of Visa International Service Association. Other products mentioned may be service marks, trademarks or registered trademarks of their respective owners. Screen captures from MYOB AccountRight Plus v19 reproduced with permission. Limitations of Liability: This material is designed to provide basic information on how to use MYOB AccountRight Plus v19. Because business circumstances can vary greatly, the material is not designed to provide specific GST or business advice for particular circumstances. Also, because aspects of the GST are complex and detailed, the material is not designed to comprehensively cover all aspects of the GST. Further, the laws implementing GST and rulings and decisions under those laws may change. Before you rely on this material for any important matter for your business, you should make your own enquiries about whether the material is relevant and still current, and whether it deals accurately and completely with that particular matter; and as appropriate, seek your own professional advice relevant to that particular matter. This information is for the general information of MYOB clients and is not to be taken as a substitute for specific advice. Consequently Software Publications Pty Ltd, Leanne Berry and Marian Brown will accept no responsibility to any person who acts on information herein without consultation with Software Publications Pty Ltd. The information in this book is relevant to MYOB AccountRight Plus v19. Earlier or later versions of MYOB AccountRight software could change the instructions in this workbook. References to websites may also change owing to the changing nature of this type of information. Please note: The information in this workbook is accurate at the time of printing [August 2011] only. Because payroll legislation and associated websites are constantly changing, URL S and screen dumps of websites in this workbook may have changed. ii Index - FNSACC404A Prepare financial statements for non-reporting entities Software Publications 2011

3 Unit 5: Entering Data and Checking Accuracy In this Unit you will: Read the Policies and Procedures of RT Engineering sales, purchases, receipts, payments and discrepancies Learn about transactions Learn about the Accounting Cycle Revise double-entry bookkeeping principles Process a variety of transactions, coding, classifying and checking for accuracy in accordance with organisational policies and procedures Check internal [banking] and external financial data [Bank Statement] to ensure consistency and accuracy Reconcile Bank, Debtors and Creditors Run the Company Data Auditor to check for any discrepancies Identify discrepancies and follow Policies and Procedures to rectify This unit covers the following performance criteria: Element 1.1 Element 1.2 Required knowledge/skills: Data is systematically coded, classified and checked for accuracy and reliability in accordance with organisational policies and procedures. Internal and external financial data is checked to ensure consistency and accuracy. Organisational guidelines and procedures Principles of double-entry bookkeeping and accrual accounting Software Publications 2011 FNSACC404A Prepare financial statements for non-reporting entities Unit 5: Entering Data 41

4 RT Engineering Accounting Policies and Procedures [Sales, Purchases and Receipts] Accounting Procedures: The Accounts of RT Engineering are kept on an Accrual Accounting System, registered for GST and reports monthly on a Cash Basis. Cash Receipts Procedures: 1 A Tax Invoice is printed for each sale using MYOB AccountRight. Cash and cheques are recorded in MYOB immediately upon receipt. 2 At the end of each day, the cash and cheques are reconciled with the data in MYOB. 3 Cash and Cheques are held in the safe and banked when convenient. 4 Dishonoured cheques must not be deleted. They must be reversed. Customer Billing Procedures: 1 A Credit Application form needs to be completed before sales on credit are permitted. Credit References are checked for reliability of payment. 2 A Tax Invoice will be printed at the time of sale and handed to the customer to maximise customer satisfaction. Before processing a new sale to an existing customer, overdue accounts are checked. If accounts are more than 60 days overdue, a hold is placed on their account until payment is up to date. Debt Recovery procedures will be put in place. 3 Customer enquiries and complaints are handled immediately in a professional manner. 4 Statements are printed at the end of each month. 5 Retentions are usually held for 6 months. Cash Payment Procedures: 1 The chequebook is kept in the safe. 2 Petty Cash is kept in a locked Petty Cash Box. 3 All invoices received are checked for accuracy before payment is made. 4 Payment details are written on each source document. 5 All source documents are filed in a monthly folder. Purchasing Procedures: 1 Tony personally purchases all supplies required by his business. Orders for steel are usually handwritten [stock is not inventoried] and faxed to the supplier. 2 At the time of delivery of goods, Tony receives a printed Tax Invoice listing all items and total cost of materials purchased. This is checked for accuracy against the original order and supplier s Price List. The Tax Invoice is entered in MYOB. 3 Suppliers send a statement at the end of the month. Tony checks this statement with the invoices received at the time of the purchase. Tony is expected to pay the amount owing for the month by the end of the following month. Discrepancies: Any discrepancies or inconsistencies should be discussed with Tony. Any available paperwork or screen dump should be kept in a Discrepancy folder which may be needed by the accountant. 42 Unit 5: Entering Data FNSACC404A Prepare financial statements for non-reporting entities Software Publications 2011

5 Opening the MYOB data file Transactions in this unit will be entered using the month of JUNE An assumption has been made that you have some knowledge of entering data in MYOB. The transactions in this unit should however extend your data entry knowledge. (i) (ii) (iii) (iv) Open the RTEngineering19.myo data file. Select Setup in the Menu Bar. Select Company Information. To identify your printouts in a classroom environment, change the name of the business to RT Engineering your name. (v) Click on OK to return to the Command Centre. Processing Transactions The term Transaction refers to any event that is recorded in the accounting system. There are 3 types of transactions: 1. External transactions External transactions are dealings with customers and suppliers that affect the Profit and Loss and Balance Sheet e.g. - sale of goods [e.g. trailers which have been built] and services - purchases of steel or a new asset e.g. computer - payment of wages to employees - borrowing money from the bank 2. Internal transactions Internal transactions occur within the business. If this transaction results in a change to the financial reports it is recorded e.g. - transfer of money between bank accounts - correct an incorrect account allocation 3. Non-Event transactions Non-Event transactions have no effect on the financial reports therefore not recorded in the accounts however a note in the Contact Log is recommended e.g. - ring a customer with reference to an overdue account - changing cash discount terms Software Publications 2011 FNSACC404A Prepare financial statements for non-reporting entities Unit 5: Entering Data 43

6 The Accounting Cycle The Accounting Cycle is the process which takes place starting with the transactions and resulting in the Financial Statements. Business Transaction Occurs Only transactions that have an effect on the Financial Statements are recorded. Source Document is Prepared Source documents provide verification that a transaction has occurred invoice, cheque, receipt and so on. Transaction is recorded in a Journal Transactions are analysed and recorded in a journal [manual set of books] or in a function box in MYOB eg Enter Sales, Receive Money. MYOB produces the Journal Entry automatically. Evidence of entry is indicated on the source document eg stamp ENTERED and signature. Journal Entry is posted to the Ledger Transactions are posted to the Ledger eg a transaction involving the payment of the telephone bill will be recorded in the Telephone Account. This procedure is automatically performed in MYOB. A Summary of the Ledger [Trial Balance] is Prepared At the end of the month or specified time, a summary of the Ledger is prepared. This summary is known as a Trial Balance. In MYOB, the Trial Balance report can be printed. Financial Statements are Prepared The Financial Statements [and other reports] are prepared. In MYOB, the Profit and Loss, Balance Sheet and Statement of Cash Flows is printed. Accuracy depends on the designing of the Accounts List [discussed in previous units] and accurate data entry. 44 Unit 5: Entering Data FNSACC404A Prepare financial statements for non-reporting entities Software Publications 2011

7 Processing Transactions [A] Transaction: [B] Source Document: RT Engineering purchased steel from Steelworks. The following Tax Invoice has been received. The document would be checked for accuracy in accordance with the Policies and Procedures. Steelworks Tax Invoice ABN Steel Road STEELE QLD 4500 (07) TO: RT Engineering Address Date: 6 June 2011 Terms: EOM after EOM Description Total ex GST Tax Steel [details given] 6, GST Plus 10% GST $ TOTAL including GST $6, [C] Analysed in Journal [below] using the Account Group Rules and Accounts List on Page 23: Summary of Account Group Rules Type of Account Group Nature of Account Group To Increase the Value EQUITY Cr Cr Dr ASSET Dr Dr Cr LIABILITY Cr Cr Dr EXPENSE Dr Dr Cr REVENUE/Income Cr Cr Dr Manual entry coding to accounts GENERAL JOURNAL To Decrease the Value Date Particulars Ref Debit Credit June 6 Purchases Steel [increase in expense] , GST Paid [decrease in liability] Trade Creditors [Steelworks] [inc in liability] , [Purchase of steel on credit] or [C] entered in MYOB [coding to some accounts, MYOB automatically coding to others] (i) (ii) In the Purchases Command Centre, select Enter Purchases. Key in the information on the following page. Software Publications 2011 FNSACC404A Prepare financial statements for non-reporting entities Unit 5: Entering Data 45

8 (iii) Check the journal entry ie click on Edit in the Menu Bar and select Recap Transaction. (iv) Record the purchase. Compare this entry with the journal entry on the previous page. [D] Post to Ledger Accounts Trade Creditors Date Particulars Debit Credit Balance Dr/Cr 1 June Opening balance 8, CR 6 June Purchases 6, , CR GST Paid Date Particulars Debit Credit Balance Dr/Cr 1 June Opening Balance DR 6 June Trade Creditors [Steelworks steel] , DR Purchases - Steel Date Particulars Debit Credit Balance Dr/Cr 1 June Opening Balance 128, DR 6 June Trade Creditors [Steelworks] 6, , DR 46 Unit 5: Entering Data FNSACC404A Prepare financial statements for non-reporting entities Software Publications 2011

9 or [D] Display General Ledger report in MYOB [posting done automatically] (i) (ii) (iii) (iv) Select Reports in the Menu Bar. Select Index to Reports. Select Accounts TAB. Point to General Ledger [Detail] and double-click. (v) Select date range 1/6/11 to 6/6/11. (vi) (vii) Select Finishing TAB and deselect Include Accounts with no Activity. Select Display The following report is displayed. Compare with the Ledger on the previous page. Note: The manual process and the MYOB process are different, but have the same result. Return to the Command Centre. On the following pages, you will enter a variety of transactions extending your MYOB skills. I am assuming you have a basic knowledge of MYOB. Software Publications 2011 FNSACC404A Prepare financial statements for non-reporting entities Unit 5: Entering Data 47

10 Transaction 2 Sale on credit with a retention Note: In the engineering/construction industry, a retention is deducted from the sale price for a period eg 6 months to ensure that the job has been completed to the satisfaction of the customer. GST is only applicable on the retention when paid. Only the net amount is recorded as owing. Billing Details: Customer: Lilydale Farms Job: Total Cost: Retention: Construction of Shed on site $22, inc GST Billing Date: 8 June % of cost, held 6 months (i) (ii) (iii) Key in the above sale, accounting for the retention. Make a note in the contact log to follow up the retention amount owing in 6 months. Record the sales invoice no printout required. Your windows should look like this. (iv) (v) In the Card File Command Centre, select Contact Log. Call up the card for Lilydale Farms and select New to record the following. Enter the following note to follow up the payment of the retention on 8/12/ Unit 5: Entering Data FNSACC404A Prepare financial statements for non-reporting entities Software Publications 2011