BSBFIN501_Assessment task 1 v1

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Warwick *

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BSBMKG510

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Accounting

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May 24, 2024

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ASSESSMENT TASK 1: WRITTEN QUESTIONS T ASK SUMMARY You need to answer all of the written questions correctly. Your answers must be word processed and sent to the assessor. R ESOURCES AND EQUIPMENT REQUIRED TO COMPLETE THIS TASK  Access to textbooks and other learning materials.  Computer with Microsoft Office and internet access. W HEN AND WHERE DO I NEED TO COMPLETE THIS TASK ? This task may be done in your own time as homework, or you may be given time to do this task in class (where applicable). W HAT DO I NEED TO SUBMIT ?  Your answers to each question in this task. I NSTRUCTIONS All questions must be answered correctly in order for you to be assessed as having completed the task satisfactorily. WHAT DO I NEED TO DO IF I GET SOMETHING WRONG ? If your assessor sees that you have not completed all parts of the task completely and satisfactorily, the details of resubmission will be discussed with you when you are advised of the outcome of this task. You will only need to redo the parts of the task that are incorrect; however, you will need to resubmit the entire assessment again. Written answer question guidance The following written questions use a range of “instructional words” such as “identify” or “explain”, which tell you how you should answer the question. Use the definitions below to assist you to provide the type of response expected. Note that the following guidance is the minimum level of response required. Analyse: when a question asks you to analyse something, you should do so in detail, and identify important points and key features. Generally, you are expected to write a response one or two paragraphs long. Assessment 1 BSBFIN501 Student Assessment Guide v1.0 1

Compare: when a question asks you to compare something, you will need to show how two or more things are similar, ensuring that you also indicate the relevance of the consequences. Generally, you are expected to write a response one or two paragraphs long. Contrast: when a question asks you to contrast something, you will need to show how two or more things are different, ensuring you indicate the relevance or the consequences. Generally, you are expected to write a response one or two paragraphs long. Describe: when a question asks you to describe something, you should state the most noticeable qualities or features. Generally, you are expected to write a response two or three sentences long. Discuss: when a question asks you to discuss something, you are required to point out important issues or features and express some form of critical judgement. Generally, you are expected to write a response one or two paragraphs long. Evaluate: when a question asks you to evaluate something, you should put forward arguments for and against something. Generally, you are expected to write a response one or two paragraphs long. Examine: when a question asks you to examine something, this is similar to “analyse”, where you should provide a detailed response with key points and features and provide critical analysis. Generally, you are expected to write a response one or two paragraphs long. Explain: when a question asks you to explain something, you should make clear how or why something happened or the way it is. Generally, you are expected to write a response two or three sentences long. Identify: when a question asks you to identify something, this means that you are asked to briefly describe the required information. Generally, you are expected to write a response two or three sentences long. List: when a question asks you to list something, this means that you are asked to briefly state information in a list format. Outline: when a question asks you to outline something, this means giving only the main points, Generally, you are expected to write a response a few sentences long. Summarise: when a question asks you to summarise something, this means (like “outline”) only giving the main points. Generally, you are expected to write a response a few sentences long. Provide answers to all of the questions below: 1. Explain the basic principle of double entry bookkeeping. The basic principle of double-entry bookkeeping is that for every transaction, there are at least two accounts involved - a debit and a credit. This principle ensures that the accounting equation (Assets = Liabilities + Equity) remains balanced. Assessment 1 BSBFIN501 Student Assessment Guide v1.0 2

2. Describe the principle of cash accounting and one advantage and one disadvantage of this method of accounting. Cash accounting is a method where transactions are recorded only when cash is exchanged. One advantage of cash accounting is that it is simple and straightforward, making it easier for small businesses to manage. However, a disadvantage is that it may not provide an accurate picture of a company's financial health since it does not consider accounts receivable or accounts payable. 3. Describe the principle of accrual accounting and one advantage and one disadvantage of cash accounting Accrual accounting, on the other hand, recognizes transactions when they occur, regardless of when the cash is exchanged. An advantage of accrual accounting is that it provides a more accurate representation of a company's financial position by matching revenues with expenses in the same accounting period. A disadvantage is that it can be more complex and require more record-keeping compared to cash accounting. 4. Explain the two accounting principles on which the calculation and reporting of deprecation is based. - Matching Principle: Depreciation is allocated to match the cost of an asset with the revenues it generates over its useful life. This principle ensures that expenses are recognized in the same period as the related revenue. - Conservatism Principle: Depreciation allows for the conservative reporting of a company's financial position by recognizing the decline in value of assets over time, reflecting a more realistic picture of their economic worth. 5. Identify and explain three key features of A New Tax System (GST) Act 1999. - GST Rate: The Act specifies the rate of Goods and Services Tax (GST) to be applied on taxable supplies. - Input Tax Credit: It outlines the conditions under which businesses can claim input tax credits on GST paid for business purchases. - Tax Invoices: The Act sets out requirements for tax invoices that need to be issued by suppliers for taxable supplies, enabling recipients to claim input tax credits. 6. Identify and then explain the four main taxation and superannuation obligations for a business. Briefly discuss each obligation. - Income Tax: Businesses are required to report their income and pay income tax on profits earned. - Goods and Services Tax (GST): Businesses registered for GST must collect GST on taxable supplies and remit it to the tax office. Assessment 1 BSBFIN501 Student Assessment Guide v1.0 3

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