BSBFIM501 ASSESSMENT V4.1017.pdf - BSBFIM501 Manage budgets and financial plans ASSESSMENT COVER SHEET Student ID Student Name First Name David 90762

BSBFIM501 ASSESSMENT V4.1017.pdf - BSBFIM501 Manage budgets...

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Unformatted text preview: BSBFIM501 Manage budgets and financial plans ASSESSMENT COVER SHEET Student ID Student Name First Name: David 90762 Last Name: Casado Olivera Student’s declaration: By submitting this assessment, you are acknowledging and agreeing to the following conditions: Please check each item in the box, if you agree. ✔ I have read and understood the details of the assessment. ✔ I have been informed of the conditions of the assessment and the appeals process and understand I may appeal if I believe the assessment is not equitable, fair or just. ✔ I agree to participate in this assessment, and I am ready to be assessed. ✔ I declare that the attached is my own work or in collaboration with other members of a group as required. ✔ I have acknowledged all sources where appropriate in accordance with ILSC’s Academic Integrity Policy, and I believe other group members have done the same. Submitting your assessment: Complete all assessment tasks, save, and upload in Moodle for grading. Please view the videos on submitting work through Moodle in the FAQ section of your VET Orientation course. Check Moodle grades and feedback on your submission. You will receive an email notification when your assessment has been graded. Assessor’s acknowledgement: Please verify each of the following principles of assessment by placing a tick in each box. Refer to the assessor's handbook for further information if required. ✔ Authentic: The assessor is assured that the evidence presented for assessment is the learner’s own work. ✔ Valid: The assessor is assured that the learner has the skills, knowledge and attributes as described in the module or unit of competency and associated assessment requirements. ✔ Current: The assessor is assured that the assessment evidence demonstrates current competency. This requires the assessment evidence to be from the present or the very recent past. ✔ Sufficient: The assessor is assured that the quality, quantity and relevance of the assessment evidence enable a judgement to be made of a learner’s competency. ILSC Business College: BSBFIM501 Assessment Version 4.1017 Page 1 of 19 How to work through your assessment Your assessment is designed to assess your performance of competency for the unit BSBFIM501 Manage budgets and financial plans, Release 1. Your assessor will help you fully understand assessment requirements for this unit. The features of this assessment are detailed in the following table. Features of the assessment resource Assessment information and scope Explanation This unit describes the skills and knowledge required to undertake financial management within a work team in an organisation. It includes planning and implementing financial management approaches, supporting team members whose role involves aspects of financial operations, monitoring and controlling finances and reviewing and evaluating effectiveness of financial management processes. The key outcomes are: ž Plan financial management approaches. Assessment overview ž Implement financial management approaches. ž Monitor and control finances. ž Review and evaluate financial management processes. To demonstrate competency, you must successfully complete all the following assessment tasks: Task 1: Online Moodle Quizzes Task 2: Questioning Task 3: Case Studies - Prepare financial statements and reports for Simpsons Pty Ltd Complete the following tasks ü Task 1: Online Moodle Quizzes You will be completing online Moodle quizzes for each topic to demonstrate your knowledge of the unit requirements. These are selfmarking. ü Task 2: Questioning You will be demonstrating a sound knowledge of the unit requirements in your responses to short answer questions. ü Task 3: Case Studies - Prepare financial statements and reports for Simpsons Pty Ltd. You will be demonstrating the required skills and knowledge by completing an assignment report. ILSC Business College: BSBFIM501 Assessment Version 4.1017 Page 2 of 19 TASK 1 – Please complete the following quizzes on Moodle: § § § Topic 1 Online Quiz Topic 2 Online Quiz Topic 3 Online Quiz TASK 2: Questioning Purpose You will demonstrate a sound knowledge of the unit requirements in your responses to short answer questions. Instructions All questions must be answered satisfactorily for Task 2 to be completed satisfactorily. There is no restriction on the length of the question responses. You must complete all questions unassisted by the assessor or other personnel, but may refer to reference material as needed. Resources required You will have access to the learning resources and relevant documents to research information when answering questions. Assessment conditions Assessment will be conducted in a safe environment where evidence gathered demonstrates consistent performance of typical activities to undertake financial management within a work team and include access to: Reasonable adjustment § Office equipment and resources. § relevant legislation, regulations, standards and codes. § interaction with others. If you do not wish to respond to the questions in written form, an interview may be used as an alternative approach if negotiated with your assessor. ILSC Business College: BSBFIM501 Assessment Version 4.1017 Page 3 of 19 Please provide responses to the following: 1. Provide a brief definition for each of the following financial terms: Accrual Accounting Accrual accounting recognises, records, and processes a financial transaction when the transaction actually occurs regardless of when it is to be paid. It reflects the true nature of a business’ financial position and performance. Aging It is a method used by accountants and investors to evaluate and identify any irregularities within a company's accounts receivables. Aging is achieved by sorting and inspecting the accounts according to their length outstanding. Ageing Summaries They are lists of customers who have not paid yet to know which invoices have to be paid. They will list each customer's outstanding balance and will then sort the total amount into columns such as: Current, 1-30 days past due, 31-60 days past due... ATO The Australian Taxation Office is the Government's principal revenue collection agency. Their role is to manage and shape the tax, excise and superannuation systems that fund services for Australians and foreigners who live and work there. Auditing It is the on-site verification activity, such as inspection or examination, of a process or quality system, to ensure that records are fair and accurate representation of the transactions they claim to represent. There are three discrete types of audits: product, process and system. Balance Sheet It is a financial statement that summarizes a company's assets, liabilities and shareholders' equity at a specific point in time. These three segments give investors an idea as to what the company owns and owes, as well as the amount invested by shareholders. Budget It is an estimate of costs, revenues, and resources over a specified period, reflecting a reading of future financial conditions and goals. It may also include planned sales volumes and revenues, resource quantities, costs and expenses... Cash Accounting It is an accounting method in which payment receipts are recorded during the period they are received, and expenses are recorded in the period in which they are actually paid. It only recognises, records and processes a financial transaction when cash is actually received. Cash Flow It is the net amount of cash and cash-equivalents moving into and out of a business. It is called positive if the closing balance is higher than the opening balance, otherwise called negative. It is increased by selling more goods or services, selling an asset, reducing costs... ILSC Business College: BSBFIM501 Assessment Version 4.1017 Page 4 of 19 They are usually a monetary valuation of effort, material, resources, time and utilities consumed, risks incurred, and opportunity forgone in production and delivery of a good or service. All expenses are costs, but not all costs are expenses. Costs It is a way of showing the financial performance of a project. It is the difference between an actual cost and the associated budgeted or estimated cost. They may be either positive or negative figures. Cost Variations Contingency Plans They are developing responses in advance for various situations that might impact business. Although negative events probably come to mind first, a good contingency plan should also address positive events that might disrupt operations - such as a very large order. Expense Money spent or cost incurred in an organization's efforts to generate revenue, representing the cost of doing business. Expenses may be in the form of actual cash payments (salaries), a computed expired portion (depreciation) of an asset, or an amount taken out of earnings. Expenditure Payment of cash or cash-equivalent for goods or services, or a charge against available funds in settlement of an obligation as evidenced by an invoice, receipt, voucher, or other such document. Expenditure Overruns It occurs when the costs for a project go over the amount that was originally estimated to be needed. They are common in business, especially those where businesses rely heavily upon estimates to determine their budgets. It refers to specific planning of the usage and management of a company's financial resources to attain its objectives as a business Financial Management concern and return maximum value to shareholders. Its key elements include budgeting, risk management, and review and evaluation. Financial Statements It is the summary report that shows how a firm has used the funds entrusted to it by its shareholders and lenders, and what is its current financial position. The three basic financial statements are the balance sheet, income statement, and cash flow statement. Financial Plans Long-term profit planning aimed at generating greater return on assets, growth in market share, and at solving foreseeable problems. Its elements are financial goals, personal net worth statement, cash flow analysis, retirement strategy, tax reduction strategy... Financial Objectives It is an objective set by a company in which the target state is measured in monetary terms, such as a certain amount of profits, or a certain percentage increase in profits over a period of time. They are distinct from others, such as retention objectives, recruitment objectives, or public relations objectives... ILSC Business College: BSBFIM501 Assessment Version 4.1017 Page 5 of 19 Financial Reports They are the financial results of an organization that are released to the public. This reporting is a key function of the controller, who may be assisted by the investor relations officer if an organization is publicly held. GAAP Generally accepted accounting principles are a combination of authoritative standards and the commonly accepted ways of recording and reporting accounting information. They limit the directors' freedom in showing an unrealistic picture through creative accounting. GST Goods and Services Tax is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. It is levied on most transactions in the production process, but is refunded to all parties in the chain of production other than the final consumer. Matching It is a fundamental concept of accrual basis accounting that offsets revenue against expenses on the basis of their cause-and-effect relationship. Petty Cash It is a small fund of cash kept on hand maintained by a custodian for purchases or reimbursements too small to be worth submitting to the more rigorous purchase and reimbursement procedures of a company or institution. Its use circumvents certain internal controls. Profit & Loss Statements It is a financial statement that summarizes the revenues, costs and expenses incurred during a specific period of time, usually a fiscal quarter or year. These records provide information about a company's ability to generate profit by increasing revenue and/or reducing costs. Resources They are economic or productive factors required to accomplish an activity, or as means to undertake an enterprise and achieve desired outcome. Three most basic resources are land, labor, and capital; other resources include energy, entrepreneurship, information, time... Revenue It is the income generated from sale of goods or services, or any other use of capital or assets, associated with the main operations of an organization before any costs or expenses are deducted. It is also known as sales. ILSC Business College: BSBFIM501 Assessment Version 4.1017 Page 6 of 19 2. When discussing budgets and financial plans, it is important to ensure that the documented outcomes are achievable, accurate and comprehensible. List 5 relevant personnel, within an organisation, that would need to be consulted. – Financial managers. – Accountants. – Financial controllers. – Production managers. – Supervisors. 3. List and explain five (5) of the basic accounting principles: - Accrual. Acc. transactions should be recorded in the accounting periods when they actually occur. - Conservatism. You should record expenses and liabilities as soon as possible, but to record revenues and assets only when you are sure that they will occur. - Consistency. Once you adopt an accounting principle or method, you should continue to use it until a demonstrably better principle or method comes along. - Cost. A business should only record its assets, liabilities, and equity investments at their original purchase costs. - Matching. When you record revenue, you should record all related expenses at the same time. 4. Provide two (2) examples of business operational risk scenarios that could affect your budgets and financial plans. - Being heavily reliant on one supplier for a key component, because that supplier can go out of business and you will have to search other suppliers, increasing costs. - Non-payment by a customer or increased interest charges on a business loan. 5. If your initial financial plans need to be varied, what contingency planning strategies could you put in place? - Risk identification, assessment and management processes - Strategies for reducing costs, wastage, stock or consumables - Restructuring of organisation to reduce labour costs ILSC Business College: BSBFIM501 Assessment Version 4.1017 Page 7 of 19 6. Match each of the following financial management roles with their respective job descriptions. Financial Management Roles: 1. 2. 3. 4. 5. 6. 7. 8. 9. Maintaining journals, ledgers and other record keeping systems Ensuring security, accuracy and currency of financial operations Debt collection Banking Invoicing clients, customers and consumers Arranging for use of corporate credit cards Maintaining petty cash systems Wages, salary payments and record keeping Purchasing and procurement Financial management roles: Arranging for use of corporate credit cards Maintaining petty cash systems Debt collection Job descriptions: a. Person who organises contract entitlements, approval from management, daily limits, timing and methods for reconciliation, producing receipts for card use and procedures for lost cards. b. Person responsible for petty cash, the petty cash limit, the process for replacing petty cash, record keeping, access to petty cash and security of petty cash and storage. c. Person who is responsible for etiquette for recovering accounts and training in dealing with conflict and company procedures Banking d. Person who is responsible for the banking and safety and reconciliation procedures for banking and security. Invoicing clients, customers and consumers e. Person responsible for software, MYOB or invoicing programs, managing accounts, professional communication and relationship management, data entry accuracy, program and computer use and the appropriate authority to invoice. ILSC Business College: BSBFIM501 Assessment Version 4.1017 Page 8 of 19 Maintaining journals, ledgers and f. Person responsible for using recognised accounting standards, other record keeping systems follows company procedures for bookkeeping, reporting responsibilities, access to data, dissemination processes, reporting hierarchy, ATO and Legal responsibilities and they have the appropriate training. Ensuring security, accuracy and currency of financial operations Purchasing and procurement Wages, salary payments and record keeping g. Person responsible for ensuring standards, audit procedures, audit requirements by law, communication between departments, researching the latest financial techniques and ongoing staff training. h. Person responsible for pre-existing service agreements with suppliers, delivery procedures, software to track purchases, training required, ordering aligned with company supply needs, budgets for ordering and following established procedures. i. Person responsible for using timesheets, electronic recording of information, HR and payroll requirements regarding format, timing, entitlements and paper work standards, using external sources for payroll management, using spreadsheets and tables for record keeping, communicating channels and establishing awards, contracts and pay rates. 7. Outline at least three (3) ways support could be provided to a finance team to ensure that they perform their roles competently. - Communicate to the Team - Training and Development - Establish Deadlines 8. List and describe at least three (3) of the main resources and/or systems that finance personnel may need to manage financial management processes successfully. - Record-keeping systems. This system ensures the preservation of the records of an organization for evidential purposes, accurate and efficient updating, timely availability, and control of access to the them only by authorized personnel. - Hardware and software. Every program they may need, computers... - Specialist advice. Advice from experts and mentors. ILSC Business College: BSBFIM501 Assessment Version 4.1017 Page 9 of 19 9. As a finance manager, what processes would you implement to monitor actual expenditure and to control costs? Setting policies and procedures. Reporting of: - assets - consumables - equipment - expenditure - income - stock and wastage 10. Categorise each of the following types of source documents according to whether you would access them to ‘report on actual expenditure’ and to ‘control costs’ or for ‘information to include in your budgets and financial plans’ by placing a tick to indicate the correct category. Types of source documents Report on actual expenditure and control costs § Bank statements ✔ § Cash flow projections § Spreadsheet-based financial projections ✔ § Invoices and receipts ✔ § Petty cash records ✔ § Short-term budgets/plans ✔ § Targets or key performance indicators for production, productivity, wastage, sales, income and expenditure ✔ § Financial reports § Operational plans ILSC Business College: BSBFIM501 Assessment Version 4.1017 Information to include in your budgets and financial plans ✔ ✔ ✔ Page 10 of 19 § Logs § Long-term budgets/plans § Credit card statements ✔ § Ledgers and journals ✔ § Spreadsheet-based records ✔ ✔ ✔ 11. As a finance manager, you would be expected to regularly collect and collate data and information on the effectiveness of financial management processes within the work team. List at least five (5) documents where you could source such data and information. - Credit card receipts - Employee time-sheets - Petty cash receipts - Bank account records - Cash flow data 12. Outline the concept of GST and explain how the system operates in Australia. Goods and Services Tax is a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. It is levied on most transactions in the production process, but is refunded to all parties in the chain of production other than the final consumer. Generally, businesses and other organisations...
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