Part A: Computerise Bean’s Coffee’s Accounts on MYOB & Prepare End of the Year...

Question

Part A: Computerise Bean’s Coffee’s Accounts on MYOB & Prepare End of the Year Financial
Reports
Description:
This assessment task is given as a progressive assessment with different milestones achieved at different
stages of learning throughout the term – with parts completed over the duration of the term. As the learners
will practice the MYOB software using MYOB guide, the assessment tasks will be completed in tandem with
practical lessons at chapter level; with the trainer/assessor allocating each milestone task at appropriate stage.
It is strongly advised that learners who are not familiar with MYOB attend all the learning sessions as they
assessment tasks will be completed in conjunction with class room lessons each week.
Note: The MYOB guide also contains assessment tasks. However, those tasks could be used as practice
assessment activities. A major assessment task for this unit is described below.
Scenario:
Bean’s Coffee is a family owned private business operating a busy coffee shop in the city centre. The shop
employs fifteen workers on the shop floor and five administrative staff members in the back office. Apart from
operating the coffee shop, the company also imports and distributes its coffee beans to other coffee shops
across Australia.
While the coffee shop returned a total turnover of $1.85 million in the last financial year, the wholesale of
coffee beans generated revenue of $0.8 million. In this current financial year, the company is looking to expand
both its retail and wholesale businesses with plans for two more coffee shops and expansion of coffee beans
distribution to other parts of the country. The company has a number of shareholders from within the family
and managed by Mrs Bean’s and her husband.
An Excel data file with a trial balance is provided of this task. Make sure that you have the data file before
undertaking this task. You will also need a working copy of MYOB Premier or Accounting Plus (Student Version)
to complete this assessment. Inform your trainer/assessor if a student version of MYOB is not installed on your
machine.

David · Accepted Answer

Answer 1:
Basic principle of Accounting:
1. Economic entity Assumption: The economic entity assumption states that the company’s entity is different and it cannot be combined with the owner’s entity. All the business owner’s personal transaction are separate from the business transactions.
2. Monetary unit assumption: All the economic activity is are expressed in the dollars AUD. All the transactions which does not have monetary unit are not recorded.
3. Going concern principle: It assumes that company has a long life and it will continue it operations for a long time
4. Matching principle: The accounting principle requires that the financials should be done on the accrual basis of accounting. It states that the revenues must match up with the expenses. 
5. Revenue recognition principle: The revenue must be recognized when incurred irrespective whether the cash against the same has been received or not.
Answer 2:
If the business owner intends to change the depreciation to reduce its expenses then it would result in breach of two principles i.e. conservatism and consistency. Under the consistency principle, it I important that the company follows one method over a period of time, so as to follow the consistency.
As per the conservatism principle, the should choose the method which will result in less net income and if the company changes the depreciation method to reduce its expenses, it will increase its net income
Answer 3:
Going concern principle states that the business will continue. The assets are used for the operations of the company and reflects the use over a long period of time, which states the reason for the going concern principle
Answer 4:
No, the owner is not correct. The statements needs to be reported under the accrual basis of accounting under which all the expenses and revenues pertaining to the period needs to reported whether they are paid or not. If the company does not mention the unpaid wages then it violates the matching principles as well as the accrual basis accounting.
Answer 5:
Accrual concept of accounting states that the company needs to report all the revenues and expenses pertaining to a particular period whether the cash transaction against the same has incurred or not. Example: The services has been rendered but the cash against the same has not been received. Under the accrual basis of accounting,

Part A: Computerise Bean’s Coffee’s Accounts on MYOB & Prepare End of the Year Financial Reports Description: This assessment task is given as a progressive assessment with different milestones...

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