Assessment
In this assessment, you will prepare and process the financial and business documents of Brightspring Traders, a business owned by a sole trader - Peter Parker.
Brightspring Traders buys and sells the following goods and services:
- buys and sells spring water
- buys and sells water coolers
- buys and sells stands and crocks
- installs coolers
- repairs and maintains cooler equipment
Brightspring Traders has the following staff:
- Peter Parker owner and manager who is also responsible for purchasing goods
- Mary Jones salesperson who takes sales orders over the phone and packs orders
- Alan Long serviceman who installs and repairs cooler equipment
- Kate Brown a new staff member who will work as the receptionist. Kate will answer the phone, handle petty cash, banking and is responsible for filing
- Sue Smith bookkeeper who processes all invoices, payments
In this assessment you will use the current month in the date.
SALES PROCEDURES - BRIGHTSPRING TRADERS
(i) All orders are taken by the salesperson, Mary, by phone/fax/email or in the place of business.
(ii) All orders received from customers for goods must contain all details, e.g. items, instructions and be authorised by a responsible person
(iii) If prices quoted are not accurate, the buyer is advised of new prices before the order is processed.
(iv) Before processing a credit sale, i.e. a sale in which the customer pays at a later date, a new customer must provide contact details, credit details, a credit reference and may be asked to grant permission for personal information to be provided by the Australian Retail Financial Network (ARFN) regarding their credit history.
(v) Before processing a credit sale to an existing customer, check the amount owing, checking for overdue amounts.
(vi) Goods are dispatched within 24 hours of receipt of the customer's purchase order, attaching the tax invoice (GST Inclusive preferred).
(vii) Three copies of the tax invoice are required - 1 for the customer, 1 for filing, 1 to be used as a packing slip/delivery note.
(viii) If goods are not available, the salesperson (or manager) will contact the customer for further instructions.
(ix) Adjustment notes are printed and posted to the customer on the day the goods are returned.
(x) The business keeps files for each customer in a locked, fireproof filing cabinet. Purchase orders are stapled to the copy of the invoice, adjustment note and any other correspondence relating to the order (e.g. delivery note) and filed for 5 years for audit and taxation purposes.
BANKING PROCEDURES - BRIGHTSPRING TRADERS
(i) When payment of account is received in cash a Receipt will be handwritten. All money to be placed in the locked cash drawer.
(ii) When payment of account is received by cheque, no receipt will be written unless requested. Cheque details are checked carefully. The cheque is deposited as soon as possible.
(iii) When payment of account is received by credit card, and processed manually, a sales voucher will be prepared. (EFTPOS will soon be implemented.)
(iv) Some accounts are paid by direct deposit to the bank account of Brightspring Traders. No receipt is written.
(v) Sue, the bookkeeper is responsible for receiving payments and preparating receipts.
(vi) Kate, the receptionist, is responsible for the banking each day. A bank deposit slip is prepared and banking reconciled in accordance with industry and legislative requirements.
(vii) Kate is to take all safety precautions on her way to the bank.
PURCHASES PROCEDURES - BRIGHTSPRING TRADERS
(viii) Peter Parker, the manager, is responsible for deciding what items need to be purchased and stock levels.
(ix) Peter prepares the purchase requisition which is handed to Sue the bookkeeper to process the purchase order. Three copies of the purchase order are prepared. The Purchase order is authorised by Peter Parker before being faxed to the supplier.
(x) When items are received, the goods delivered are checked with the enclosed delivery docket/packing Slip and also checked against the purchase order in the store by Mary Jones. Any discrepancies are noted.
(xi) When the Invoice is received, either with the goods or in the post, emailed or faxed, all details are checked against the purchase order and any discrepancies identified.
(xii) Tax Invoice received and supporting documentation is filed in a file for the supplier in a locked, fireproof filing cabinet. Records are kept for 5 years.
(xiii) The statement of account received is reconciled with invoices and payments before authorisation is given for payment by Peter Parker. Statement is filed in supplier's folder.
PAYMENT PROCEDURES - BRIGHTSPRING TRADERS
(i) Before an invoice is paid, the following must be checked.
(ii) Invoice or tax invoice received is accurate and the money is owing, i.e. goods have been received, price is accurate and services have been performed.
(iii) The goods or service is for business use (not personal).
(iv) Payment is made by cheque.
(v) The cheque book must be kept in a locked cabinet.
(vi) Cheques can only be signed by Peter Parker.
Part A - SALES
1. The following Purchase Order has been received from Chris Davis an existing customer. Check all calculations are accurate.
2. Refer to the price list on page 2 (Brightspring Traders Selling Prices)
Are all the details required/correct? If not, what is missing/incorrect?
3.Prepare the delivery docket to be sent with the above order on 10/month.
4. Prepare the Tax Invoice on 10/month to post to Chris Davis.
5. The following goods returned docket was received with goods returned from Chris Davis. Prepare the required adjustment note on 13/month.
6. Chris Davis called in to the office in person and paid Invoice 22 in cash on 15/month for the amount of the invoice less the goods returned.
7. Job card number 88 (Chris Davis) has been handed to you for processing with the following details. (12/month)
Repairs to Stands $80 ex GST
Travel: 50 km @ $0.56 per km ex GST
Prepare the tax invoice 23 to be issued to Chris Davis on 12/month.
8. The following cheque was received in the mail to pay Invoice 23.
9. Prepare for banking.
(a) Make a batch list of the cash and cheques received in this assessment.
(b) If Kate had a large number of notes, how would Kate prepare the notes for banking?
(c) Complete the following table for the cash received.
(d) Does the total abovereconcilewith the cash paid by Chris Davis ? ..............
10. Complete the deposit slip below, banking the cash and cheque received on or before the 22/month.
11. How many copies of the deposit slip are made by Kate? ...................
What happens to each copy?
12. List 4 safety and security procedures Kate should follow when walking to the bank.
13. List 2 other methods the business could have used to bank the receipt of the cash and cheques.
14. What does the following stand for or mean?
BSB
EFTPOS
Not Negotiable
15. If Chris Davis had paid his account by credit card, list below the organisational/banking procedures Sue would follow (refer to policies and procedures).
16. This encoding can be found on the bottom of a cheque. What do all the numbers stand for?
000056 "084"'119': 561245784
17. What is the Code of Banking Practice?
18. What is the object of the Competition and Consumer Act 2010?
19. According to the Policies and Procedures [copy at the beginning of this assessment], what happens with the completed sales documents?
PART B - PURCHASES
20. Peter Parker has identified that the following items need to be ordered.
21. As the bookkeeper, prepare the required purchase order on 5/month to fax or scan and email to North Spring Water Pty Ltd.
22. Submit a copy of the purchase order completed in question 21 to your facilitator for authorisation.
If you are studying by distance/on-line education, please email your facilitator the completed Purchase Order for authorisation.
Follow the instructions provided by your facilitator
23. After sending the order, what will Brightspring do with the 3 copies prepared as per organisational procedures? [Remember, this is for Purchases, not Sales]
24. The following Delivery Note has been received with the items ordered on the previous page from North Spring Water Pty Ltd. (no prices were included)
(a) Is the store receiving the items ordered?
(b) What document did you check the delivery docket against?
(c) Indicate on the delivery docket beside "Received by" who will sign this document.
(d) What happens to this docket now?
25. The following Tax Invoice was also received.
Check the accuracy of the above invoice:
(a) Have the above goods been received? ................................................
(b) Has the correct amount been charged? ...............................................
(Check with the price list on page 4 - North Spring Water Pty Ltd Price List.)
(c) Has the supplier quoted his ABN? .....................................................
26. One steel stand was returned on 10/month because it was faulty.
Prepare the goods returned docket completed by Mary to be sent with the returned stand.
27. On receipt of the faulty stand, North Spring issued the following adjustment note.
28. The following tax invoice was received.
Would the above invoice be recorded in the books of Brightspring Traders?
Give a reason for your answer.
29. Write out the cheque to pay the amount owing on Invoice 1550 less adjustment 1553 - $89.97. Date: end/month
30. Complete the remittance slip below to accompany the above cheque.
31. List 4 points to remember when writing a cheque.
32. What safety precautions should be taken with the cheque book?
33. List 2 reasons why a bank may refuse to make payment on a cheque.
34. The following statement was received from North Spring Water Pty Ltd on 7th of the following month. With reference to the documents in this assessment, check the statement for accuracy.All documents relating to North Spring Water Pty Ltd for the current month should be in this statement.
35. Rewrite the statement using the correct figures:
36. Run a check on ABN "35 933 853 286".
Is this ABN active?
What is the name of the entity with this ABN?
Is this entity registered for GST (Yes or No) .
If you received an Invoice from this entity, would GST be charged?
37. List 3 tips for keeping your computer safe, protecting your banking and financial identity.
Attachment:- Process Financial Transactions.rar