Inventories often form a significant part of a firm’s business (although not all firms have Inventories; for example, Ryman Healthcare does not have any Inventories). Go to your firm’s annual reports that you downloaded as part of Step 3. Open each soft copy file and search for where ‘Inventories’ is referred to. You may find your document has a search function. You can also find comments on Inventories in the notes to your firm’s financial statements. Read these comments to get a feel for how your company manages its Inventories. Make sure that you do this for EACH year for which you have downloaded an annual report.
- As you are doing this, write down the key concepts that you find interesting, and whether they relate to each year or just one year. You will find specific information about your firm’s Inventories policies as part of the detailed notes to the financial statements. Note the figures for Inventories for your firm. Are they large or small numbers? What do these figures mean? You might find that your firm’s note on Inventories contains key terms such as Raw Materials, Work in Progress, Finished Goods, Net Realisable Value.
- What does your firm disclose (and not disclose) about its Inventories? Has your firm changed its Inventories practices over the years that you are reviewing? If so, why? How might this have affected your firm’s financial statements? Does your firm disclose what type of Inventories system it uses (perpetual or periodic)? What method of Inventories does it use (weighted average, FIFO, LIFO, specific identification)? What are some of the associated issues and costs that your firm might be facing with its Inventories management? Why might this be the case? Are there any areas where you think your firm could improve its Inventories management? How did you identify these areas? If you have had any experience with Inventories, make sure you also describe these experiences.
- exposing you to a commonly used accounting software. In this step, you will learn how to use MYOB AccountRight (Windows), or MYOB Essentials (Mac).
- Did you know that you can ‘try-before-you- buy’? Most computerised accounting systems will provide an option where you can trial a version of their software for free (usually for a period of up to 30 days). In this step, we will trial MYOB software, one of the leading small business accounting software in Australia.
- Important note: You only have 30 days within which to trial MYOB for free, beginning from the date that you download and install it onto your computer. You will need this software to complete Steps 8 and 9 of this assignment, so please ensure you are able to complete both steps within 30 days from the time that you install MYOB onto your computer.
- Depending on your computer’s operating system, please go to:
Windows users: the MYOB AccountRight website and click on Try FREE for 30 Days
Mac users: MYOB Essentials and click on Try FREE for 30 Days.
Please note: If you are already a user of the MYOB AccountEdge for Mac, then you can continue to use this if you are able to – be aware that MYOB has stopped selling AccountEdge as of October 2019 (see this notice: MYOB AccountEdge website) however, they still support this product for existing users.]
- Then, you can learn how to use this software for free. Remember: when you set this up in your computer, you only have 30 days to complete Steps 8 and 9.
- MYOB offers tutorials for operating their products. Simply choose which product you have downloaded for the trial version (AR AccountRight), click on the ‘Start Learning’ button and follow through the prompts. Mac users, please note: the training provided demonstrates using AccountRight, since all MYOB products (Essentials/AccountEdge) are similar enough so that you can complete the training products for AccountRight and apply that knowledge to Essentials/AccountEdge. There are very small differences in terms of the User Interface and where buttons are located but you should get an understanding to which you can apply to the product you are using. In fact, the products are so similar that MYOB only produces training and tutorials for AccountRight.
- How you complete the training may differ for each person. For example, what file you create, what bank accounts you link (or skip linking, in most cases) and what entries you create in your MYOB file may be done differently by different people.
- The idea is that you are exploring how to use MYOB. You can learn and become familiar with one of the common accounting software packages for small to medium size businesses. There is no single set way in which you can learn this. You can set up the Clearwater file, or you can use your own firm and create hypothetical data (suppliers, customers, etc). The idea is that you are learning about this software package.
- Marks for this section are not based on the quality of your MYOB file; marking is based on evidence of you going through the learning process.
- Please take a screen shot* of your last screen/transaction in your own MYOB file in each of the two phases (set up and training), and include both screen shots in your Word document as evidence you have completed the set up and training. That is, you need to submit a screen shot of the last screen you were working in, in the file that YOU created. We are interested in seeing what the last screen was that you were working in when you completed each section. We do NOT want screen shots of the training and set up videos.
- If you do not include two screen shots showing your completion of the set up, and completion of the training, you will not receive marks for this aspect. If you provide a screen shot of the training videos (or the last screen in the training videos) rather than a screen shot of your own MYOB file, then you may only be awarded part marks.
- Then, go to the EzyLearn MYOB Online Training Skills Test and complete the 13-question quiz. You have 30 minutes within which to complete the quiz; however, if you are reasonably competent in MYOB it should take you far less time (perhaps about 10 minutes). Take a screen shot of your results (provided on screen when you complete the 13 questions) and include this in your Word document for this step. Again, if you do not include this screen shot*, you will not receive any marks for completing the quiz. In some cases, your browser may not show the final results screen; in this case, please ensure that you can show a screen shot of question 1 and question 13 instead.
- *If you do not know how to create a screen shot, please read the Guide for how to complete a screen shot, or the Guide to Windows Snipping, or the Guide for Mac users.
- creating a set of business transactions for your company, recording these in MYOB, and producing a set of financial statements from MYOB.
- Every day, you engage in and perform ‘transactions’. For example, filling up your car with fuel (and paying for it) is a transaction. In your financial records, if you were to record this transaction, it would appear as a DR to Fuel Expense and a CR to your Cash at Bank asset (or a CR to your Credit Card Liability).
– To record this transaction in MYOB, you would use the ‘Spend Money’ function in the Banking command centre to record this transaction. (Note: A good PeerWise question could be based around ‘why’ you might use this function to record such a transaction, instead of the Pay Bills function, in MYOB.)
So then, you can think of transactions as the interactions between customers and suppliers and a business. Transactions can be very simple, like our fuel example above, or more complex. If you look up any business dictionary, you will probably get a formal definition for a transaction such as “A transaction is an economic event that initiates a recording process in a business accounting system.” However, as you have seen, even if you do not have an accounting system (and, yes, most people probably do not keep track of their personal fuel expenses in an accounting system) you can still be creating transactions; even if you do not record them.
In this step, you need to create a set of ten (10) hypothetical business transactions that might be realistic for your allocated firm. Please ensure that the set of business transactions are related to your firm’s industry and operations. You will need to include your set of business transactions in your Word document for this Step. You will not obtain any marks for this section if you do not include these business transactions in your Word document.
Once you have created your set of business transactions, you will then need to record them in your MYOB trial software. There are two ways in which you can complete this: either create a NEW company file in MYOB and record them there, or use your existing Clearwater file, and create your business transactions using dates after the last transaction for Clearwater.
For this step, please create a NEW company file.
Using a new file will require you to completely set up again; however, your reports will only reflect the business transactions that you created. This will be good practice again for you, in learning to use MYOB.
Once you have recorded your business transactions, you will need to export the All Journals report to Excel and include this in your Step 3. Hint: The All Journals report is basically a report of all your transactions over a period, from all ‘journal’ sources (e.g. Sales, Purchases, General). MYOB has automatically generated these journal entries in the various source journals for you, based on your transactions entered. The All Journals report does not appear in the Index to Reports. The correct report we are asking you to submit will actually show the heading ‘All Journals’ once you run the report. You will need to explore the Command Centre functions in MYOB to find this report. Once you have the correct report, you can either export it to Excel, and copy and paste this into your Word document, or take a screen shot of your All Journals report and include the screen shot into your Word document.
You then need to generate a set of financial statements: Income Statement, Balance Sheet, and Statement of Cash Flows. Include these financial statements in your Word document submission for this Step; either export them to Excel, and copy and paste them into your Word document, or take a screen shot of each and include the screen shots into your Word document.
Now we get to the exciting part. Take a good look at your financial statements. What story do you think they are telling you? What I am interested in is YOUR interpretation of these financial statements. What tools might you use to analyse these financials? Why? Include (in your Word document) your analysis and discussion about the story your financial statements are telling you about your company.
- involves you describing your firm’s Depreciation policies and creating Depreciation journal entries based on your firm’s financial statements.
- Go to your firm’s annual reports, open each soft copy file and search for where ‘depreciation’ is referred to. You may find your document has a search function. You can also find comments on depreciation in the notes to your firm’s financial statements. Read these comments to get a feel for how your company manages its deprecation of non-current assets. Make sure that you do this for EACH year for which you have downloaded an annual report.
- As you are doing this, write down the key concepts that you find interesting, and whether they relate to each year or just one year. You will find specific information about your firm’s depreciation policies as part of the detailed notes to the financial statements, and your firm may possibly have ‘depreciation and amortisation’ listed in its Income Statement as a major expense account. You will also find that ‘Accumulated’ depreciation and amortisation may be listed in your firm’s Balance sheet, or in a detailed note that relates to certain assets in the Balance sheet (these assets may be called ‘Property Plant and Equipment’). Note these figures down as part of your key concepts.
- Has your firm changed its depreciation methods over the years that you are reviewing? If so, why? How might this have affected your firm’s financial statements? What type of depreciation method does it use (for example, straight-line, reducing balance, units of production)? Is depreciation a significant expense for your firm? Why or why not?
- Using the information from your firm’s financial statements (mainly the Balance sheet, Income statement and the relevant notes), identify at least three journal entries that may have been processed by your firm’s accountants when recording your firm’s depreciation. The journal entries can include numbers you have made-up, or alternatively be simply noted as ‘XXX’. Write the three journal entries as part of your response to this Step, in your Word document. What effect do these journal entries have on your firm’s financial statements? Are there any areas where it might be possible to manipulate these entries?
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