FNSACC301 Learner Guide V1.1

FNSACC301
Process financial transaction

and extract interim reports
Learner Guide
1
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FNSACC301
Process financial transactions and extract interim reports
ECA Graduate Institute – ABN 81 128 584 896 – CRICOS 02997M – RTO No 91423
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Table of Contents
Table of Contents ......................................................................................................................... 3
Unit of Competency ........................................................................................................................ 6
Performance Criteria....................................................................................................................... 7
Foundation Skills ............................................................................................................................. 9
Assessment Requirements ............................................................................................................ 10
Housekeeping Items ......................................................................................................................... 11
Objectives ......................................................................................................................................... 11
1. Check and verify supporting documentation ........................................................................... 13
1.1 – Identify, check and record information from documents ....................................................... 14
Assets ............................................................................................................................................ 14
Liabilities ....................................................................................................................................... 14
Owner’s equity .............................................................................................................................. 14
AASB (Australian Accounting Standards Board) ........................................................................... 15
Learning Task One ......................................................................................................................... 20
Activity 1A ..................................................................................................................................... 21
1.2 – Examine supporting documentation to establish accuracy and completeness and to ensure
authorisation by appropriate personnel........................................................................................... 22
Suspense reports........................................................................................................................... 22
Reconciliations .............................................................................................................................. 22
Source documents ........................................................................................................................ 23
The accounting process ................................................................................................................ 23
Learning Task Two......................................................................................................................... 25
Activity 1B ..................................................................................................................................... 26
2. Prepare and process banking and petty cash documents ......................................................... 27
2.1 – Enter accurately and balance deposits and withdrawals according to organisational
procedures ........................................................................................................................................ 28
Petty cash ...................................................................................................................................... 28
Deposits ........................................................................................................................................ 28
Withdrawal.................................................................................................................................... 29
Petty cash voucher ........................................................................................................................ 29
Activity 2A ..................................................................................................................................... 32
2.2 – Check cheques and card vouchers for validity before processing ........................................... 33
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2.3 – Reconcile banking documentation with organisation’s financial records ............................... 33

Activity 2B ..................................................................................................................................... 43
2.4 – Check, process and record petty cash claims and vouchers, and balance petty cash book
according to organisational procedures ........................................................................................... 43
Petty Cash Book ............................................................................................................................ 45
Learning Task Three ...................................................................................................................... 48
Activity 2C ..................................................................................................................................... 54
3. Prepare and process invoices for payment to creditors and for debtors ................................... 55
3.1 – Prepare invoices in accordance with organisational procedures ............................................ 56
3.2 – Check invoices against source documents for accuracy and correct any errors ..................... 56
Raising and receiving invoices....................................................................................................... 57
Learning Task Four ........................................................................................................................ 61
Activity 3A ..................................................................................................................................... 62
3.3 – File all invoices and related documents for auditing purposes ............................................... 63
Privacy and confidentiality of personal records ........................................................................... 76
Learning Task Five ......................................................................................................................... 77
Activity 3B ..................................................................................................................................... 79
4. Prepare and post journals and batch monetary items .............................................................. 80
4.1 – Prepare journals accurately and completely, and batch items within organisational timelines
.......................................................................................................................................................... 81
The Accounting process ................................................................................................................ 81
Learning Task Six ......................................................................................................................... 102
Activity 4A ................................................................................................................................... 111
4.2 – Match batch items precisely to initial receipt records .......................................................... 112
Learning Task Seven .................................................................................................................... 115
Activity 4B ................................................................................................................................... 116
4.3 – Ensure journals are authorised by appropriate person and process in accordance with
organisational policy and procedures ............................................................................................. 117
Learning Task Eight ..................................................................................................................... 121
Activity 4C ................................................................................................................................... 122
5. Post journals to ledger.......................................................................................................... 123
5.1 – Post journals accurately to ledger in accordance with organisational input standards, with
transactions correctly allocated to system and accounts............................................................... 124
Journals ....................................................................................................................................... 128
Activity 5A ................................................................................................................................... 136
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6. Enter data into system ......................................................................................................... 137

6.1 – Enter data accurately into system in accordance with organisational input standards and
correctly allocate transactions to system and accounts ................................................................. 138
6.2 – Update related systems to maintain integrity of relationships between financial systems . 138
Learning Task Nine ...................................................................................................................... 144
Activity 6A ................................................................................................................................... 145
7. Prepare deposit facility and lodge flows ................................................................................ 146
7.1 – Select deposit facility appropriate to banking method to be used........................................ 147
7.2 – Balance batch with deposit facility without error ................................................................. 147
7.3 – Take security and safety precautions appropriate to method of banking, in accordance with
organisational policy and industry and legislative requirements ................................................... 147
Bank deposit slips........................................................................................................................ 149
Learning Task Ten ....................................................................................................................... 161
Activity 7A ................................................................................................................................... 163
7.4 – Obtain and file proof of lodgement so that it is easily accessible and traceable .................. 164
Activity 7B ................................................................................................................................... 166
8. Extract trial balance and interim reports ............................................................................... 167
8.1 – Process accurately any special transactions .......................................................................... 168
8.2 – Complete cash and credit journals and post to general ledger ............................................. 168
8.3 – Extract and check trial balance and prepare other required reports .................................... 168
8.4 – Find and correct any errors .................................................................................................... 168
Posting journal entries to the general ledger ............................................................................. 168
Profit and loss statement ............................................................................................................ 181
Activity 8A ................................................................................................................................... 183
Skills and Knowledge Activity ...................................................................................................... 184
Major Activity – An opportunity to revise the unit ......................................................................... 185
References............................................................................................................................... 187
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Unit of Competency
Application
This unit describes the skills and knowledge required to prepare and process routine financial
documents, prepare journal entries, post journals to ledgers, prepare banking and reconcile financial
receipts, and extract a trial balance and interim reports.
It applies to individuals who use specialised knowledge and follow agreed processes to carefully
check and process detailed financial information to ensure standards are maintained.
Work functions in the occupational areas where this unit may be used are subject to regulatory
requirements. Refer to the FNS Implementation Guide Companion Volume or the relevant regulator
for specific guidance on requirements.
Unit Sector
Accounting
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Performance Criteria
Element Performance Criteria
Elements describe the Performance criteria describe the performance needed to
essential outcomes. demonstrate achievement of the element.
1. Check and verify 1.1 Identify, check and record information from documents
supporting 1.2 Examine supporting documentation to establish accuracy
documentation and completeness and to ensure authorisation by
appropriate personnel
2. Prepare and process 2.1 Enter accurately and balance deposits and withdrawals
banking and petty cash according to organisational procedures
documents 2.2 Check cheques and card vouchers for validity before
processing
2.3 Reconcile banking documentation with organisation’s
financial records
2.4 Check, process and record petty cash claims and vouchers,
and balance petty cash book according to organisational
procedures
3. Prepare and process 3.1 Prepare invoices in accordance with organisational

invoices for payment procedures
to creditors and for 3.2 Check invoices against source documents for accuracy and
debtors correct any errors
3.3 File all invoices and related documents for auditing purposes
4. Prepare and post 4.1 Prepare journals accurately and completely, and batch items
journals and batch within organisational timelines
monetary items 4.2 Match batch items precisely to initial receipt records
4.3 Ensure journals are authorised by appropriate person and
process in accordance with organisational policy and
procedures
5. Post journals to ledger 5.1 Post journals accurately to ledger in accordance with
organisational input standards, with transactions correctly
allocated to system and accounts
6. Enter data into system 6.1 Enter data accurately into system in accordance with
organisational input standards and correctly allocate
transactions to system and accounts
6.2 Update related systems to maintain integrity of relationships
between financial systems
7. Prepare deposit facility 7.1 Select deposit facility appropriate to banking method to be
and lodge flows used
7.2 Balance batch with deposit facility without error
7.3 Take security and safety precautions appropriate to method
of banking, in accordance with organisational policy and
industry and legislative requirements
7.4 7.4 Obtain and file proof of lodgement so that it is easily
accessible and traceable
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Element Performance Criteria

Elements describe the Performance criteria describe the performance needed to
essential outcomes. demonstrate achievement of the element.
8. Extract trial balance 8.1 Process accurately any special transactions

and interim reports 8.2 Complete cash and credit journals and post to general ledger
8.3 Extract and check trial balance and prepare other required
reports
8.4 Find and correct any errors
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Foundation Skills
This section describes language, literacy, numeracy and employment skills incorporated in the
performance criteria that are required for competent performance.
Skill Performance Criteria Description
Reading 1.1, 1.2, 2.1, 2.2, 2.4,  Analyses, matches and interprets information, paying
3.2, 4.2, 8.4 attention to detail to identify errors
Writing 1.1, 2.1, 2.4, 5.1, 8.2,  Records information accurately using correct spelling,
8.3 grammar and terminology
Oral 4.3  Uses questioning and active listening to convey and clarify
Communication information and instructions
Numeracy 1.1, 2.1-2.4, 3.1, 3.2,  Performs mathematical calculations to check accuracy and
4.1, 7.2, 8.1, 8.2 completeness and reconcile numerical and financial data
Navigate the 2.1, 2.4, 3.1, 4.3, 5.1,  Follows legislative requirements, and organisational
world of work 7.3 protocols, policy and procedures relevant to own role
Interact with 1.2, 4.3  Uses correct communication practices and protocols to
others gain processing authorisations from relevant personnel
Get the work 1.1, 2.1-2.4, 3.1-3.3,  Plans, organises and implements tasks according to
done 4.1-4.3, 5.1, 6.1, 6.2, organisational and legislative requirements
7.1-7.4, 8.1-8.4  Responds to predictable routine problems by
implementing standard or logical solutions
 Uses the main features and functions of digital tools to
complete work tasks and to access information
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Assessment Requirements
Performance Evidence
Evidence of the ability to:
 Accurately enter and balance deposits and withdrawals

 Process and balance petty cash transactions
 Check and verify supporting documentation
 Apply relevant security measures for preparing and banking receipts
 Batch monetary items and prepare deposit facilities
 Accurately enter data into accounting systems and process journal entries according to
organisational policy and procedures and legislative requirements
 Prepare and authorise journals and check journal processing reports
 Extract, check and correct a trial balance
 File documentation to meet all organisational and regulatory requirements.
Knowledge Evidence
To complete the unit requirements safely and effectively, the individual must:
 Identify a range of accounting conventions, processes and procedures

 Describe banking procedures and guidelines
 Outline typical errors that can be made in processing financial transactions
 Describe forms of ‘proof of lodgement’
 Describe types of ‘special transactions’
 Identify and describe the key features of:
o industry codes of practice
o legislative and regulatory requirements relevant to the work
o organisational policy and procedures
 Explain the security procedures for handling cheques, vouchers and cash
 Describe the key features of a range of reports.
Assessment Conditions
Assessment must be conducted in a safe environment where evidence gathered demonstrates

consistent performance of typical activities experienced in the accounting field of work and include
access to:
 Common office equipment, technology, software and consumables.
Assessors must satisfy NVR/AQTF assessor requirements.
Links
Companion volumes available from the IBSA website: http://www.ibsa.org.au/companion_volumes
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Housekeeping Items
Your trainer will inform you of the following:
 Where the toilets and fire exits are located, what the emergency procedures are
and where the breakout and refreshment areas are.
 Any rules, for example asking that all mobile phones are set to silent and of any
security issues they need to be aware of.
 What times the breaks will be held and what the smoking policy is.
 That this is an interactive course and you should ask questions.
 That to get the most out of this workshop, we must all work together, listen to each
other, explore new ideas, and make mistakes. After all, that’s how we learn.
 Ground rules for participation:
o Smile
o Support and encourage other participants
o When someone is contributing everyone else is quiet
o Be patient with others who may not be grasping the ideas
o Be on time
o Focus discussion on the topic
o Speak to the trainer if you have any concerns
Objectives
 Know how to check and verify supporting documentation
 Understand how to prepare and process banking and petty cash documents
 Determine how to prepare and process invoices for payment to creditors and for
debtors
 Learn how to prepare and post journals and batch monetary items
 Discover how to post journals to ledger
 Show how to enter data into system
 Demonstrate how to prepare deposit facility and lodge flows
 Identify how to extract trial balance and interim reports
 Gain the skills and knowledge required for this unit.
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To the Instructor,
It is recommended that you provide your learners with samples of source documents. Some learners
may never have had the opportunity to access different documents in Australia. Even though learners
must demonstrate sufficient language skills to meet the requirements of this Certificate, they may
not have sufficient time to familiarise themselves with the format of the documents so that they can
make sure and confirm that the information on the documents is correct.
The assessments in these units are consistently based on a 10% GST Payable or Input Tax Credits.
Please make allowances in the answers if you decide to calculate answers based on current GST and
ITC charges.
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1. Check and verify supporting documentation

1.1. Identify, check and record information from documents
1.2. Examine supporting documentation to establish accuracy and completeness and to ensure
authorisation by appropriate personnel
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1.1 – Identify, check and record information from documents

As a worker within the Financial Services Industry, it is important that you have a basic
understanding of the accounting process.
As such, accounting is the systematic recording, reporting and analysis of financial transactions
within a business. Accounting allows you to analyse the financial performance of a business and to
make decisions. This unit of competence will provide you with a basic understanding of financial
transactions and how to be systematic in the application, auditing and correction of financial
transactions such as petty cash, posting to journals and completing a trial balance.
The Accounting Equation is:

Assets + Liabilities = Owner’s Equity
Assets
A resource:
(a) Controlled by an entity as a result of past events; and
(b) From which future economic benefits are expected to flow to the entity.
Assets are what the organisation owns. They include, non-current assets and current assets. Current
assets are assets that are expected to become cash within the next year. Conversely noncurrent
assets are assets that are not expected to become cash in the next year.
Liabilities
A present obligation of the entity arising from past events, the settlement of which is expected to
result in an outflow from the entity of resources embodying economic benefits.
Basically, a liability is the amount that is owed by the organisation. Liabilities, like assets are broken
down into current and non-current liabilities. Items that are not due to be paid within one year are
called non-current liabilities. Current liabilities are debts to be paid within one year.
Owner’s equity
Owner’s equity is the amount of ownership an individual or company has in an asset. This is that
amount of money the owner could withdraw from the organisation. To determine Owners Equity,
and the trial balance, you would change the accounting equation to:
Owner’s Equity = Assets – Liabilities
As you will learn within this Learner Guide, if your trial balance does not balance (equal the same
amount) then you will need to check your journal postings to identify what has been done
incorrectly.
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AASB (Australian Accounting Standards Board)

Under Section 296 of the Corporations Act 2001, the AASB are appointed to set the Australian
Accounting Standards. The Australian Accounting Standards provide you with the industry accepted
methods of conformity in regards to the preparation, presentation, audit, review and compilation of
general purpose financial statements.1 These standards general purpose financial reports of
reporting entities in the private and public sectors.
This Learner Guide will provide you with basic accounting standards so that you will be able to
understand the accounts as they are presented to you.
For information within accounting reports to balance, it is essential that

you check documents to make sure that the information within
documents such as purchase orders and invoices match and are correct.
Information includes:
Account numbers
Make sure that the account number is consistent with the name of the
customer. The last thing that you want to do is to invoice a customer for
services that were not rendered. This will have a negative impact on the
reputation of your organisation.
Account Numbers can be numeric, alpha or alphanumeric. They are a way in which an organisation
can identify a customer. This ensures that errors can occur, especially when the name of the
customer and their initials are the same. They also ensure that the customer cannot be identified
and is a way in which to maintain their privacy.
Addresses
Confirm the address to make sure that the account number and the customer address correlate. For
example if you have two customers with the same name and you become confused matching the
account number address to the customer will minimise the risk of an invoice being incorrectly raised.
Amounts of money, figures

Make sure that the amounts and figures are correct. This may mean double checking documents
against purchase orders. If you have been provided with a quote or if your organisation maintains a
business relationship whereby they purchase specific products from a specific supplier, your
organisation may have a discount. Make sure that the amounts in the invoice match the supporting
documentation. (See below)
1
Institute of Chartered Accountants Australia “URL Address:
http://www.charteredaccountants.com.au/Industry-Topics/Reporting/Australian-accounting-standards.aspx
Access Date: 16.06.2014
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Card numbers
Make sure that the sixteen digits on the card are correct. To add extra protection to the client’s
accounts, all debit and credit cards have CCV numbers which are the last three digits on the slip on
the back of the card.
Make sure that you check the dates on the cards to ensure that the information provided is correct.
Defaults may be charged if incorrect cards are charged against your accounts. This can lead to a
default fee, depending on your banks policy and procedures.
Cheque numbers
Cheque numbers are usually identified in cash flow statements, bank reconciliations and for the
purpose of this Learner Guide, in petty cash journals. It is important to make sure that the cheque
number correlates with the source document and that the amount on the cheque number matches
the amount on the invoice.
Dates
To be systematic is to work in a logical manner. If the date on the cheque is incorrect for example,
the cheque cannot be processed until the date on the cheque. This means that your cash flow will be
affected and your organisation may not be able to pay some of their own fees and charges.
Make sure that the date is also after the date on the purchase order so that the transaction is
completed in a logical order and does not lead to confusion.
Names
There is always the chance that you will acquire two clients with the same name. Always check the
name against the account and the other information on your documents. The address can also assist
you in identifying the different clients. Make sure that the name on the account and the address is
correct.
Failure to check for accuracy and completeness in the above information will ensure that a legal
transaction has occurred. Be systematic in checking the information in the documents to make sure
they are correct so that your journal entries are correct. There are many documents that are
generated in the accounting cycle.
Care should be taken to ensure that you can recognise the purchase of each document so that they
can be used to generate and authorise a correct transaction.
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Documents may include:
Application forms Application forms are completed when a client wishes to purchase a
product or service. The information within the application must be
correct for when a new account is opened.
In some software programs, once an account number is assigned to

the client, they cannot change the name of the account against the
corresponding Account Number. If the name of an account is
changed, for example if the client is married or divorced then the
account is closed and a new linked account is open.
Applications are used by business to ensure that the client meets

the requirements to safely apply for the financial product or service.
Statements that information is true will protect the supplier or
financial service organisation when the client fails to provide
information that allows the client to meet their legal obligations
such as the ability to pay the fees and charges required.
Claim forms A claim form is commonly used in insurance claims. Claims may be
completed when a home (its contents) or a car is damaged. The
amount between the price of the car, its replacement or repair will
usually constitute the claim.
There are also claims that can be made against medical or life
insurance. When a client believes that they are entitled to funds, a
claim form is completed.
Credit notes Credit notes are receipts provided by business to a customer stating
that a specific amount has been credited to an account. This can
occur when there is a mistake in an invoice.
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Delivery dockets A delivery docket is a document that is provided with the shipment
of goods that lists the description and quantity of goods delivered.
This docket is signed by the customer as proof of delivery.
Deposit books Many organisations have deposit books to record their sales.
Deposit books require that you record:

 The date of the transaction
 The customer’s name ; and
 The amount of the deposit
Invoices An invoice is the bill. A purchase order is raised and an invoice is

sent with a list of goods and services, the price and the amount due.
Petty cash vouchers Petty cash is the amount that an organisation puts aside for
expenses for the purchase of small items such as milk, office
products and supplies. This amount is in the form of cash. When an
amount is taken from petty cash to make a purchase, the amount is
entered into the voucher and left in the petty cash until a minimum
amount is reached and the cash needs to be replaced.
Purchase orders A purchase order is generated by a buyer to authorise a purchase

transaction. When the seller accepts the order, the contract is
binding. The purchase order usually sets the price, the amount,
payment terms, date of shipment, terms and conditions and
identifies the seller.
Receipts A receipt is obtained when a bill has been paid.
Remittance advice A remittance advice is sent to the supplier to inform the supplier
that a bill has been paid. The advice, for example may be sent with
the cheque.
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Statements A statement is a document, such as a bank statement that sets out

a record of debits and credits to an account. These debits and
credits can usually be tracked through cash transfers or payments,
cheques, debits and credits to the account.
Take the time to learn these documents if you are not familiar with them. Be systematic and form
the habit of checking the details in the document. Care should be taken to develop an eye for detail
so that the accounts are correct. Decisions are made by management based on the accounts,
including the flow of cash, the ability to receive payments within defined time frames.
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Learning Task One

Class discussion
Documents are inspected for errors.
List two documents and the possible errors that you may find in each document. What should you
do if there is an error found in the document?
Discuss different scenarios and organisational procedures that are in place to correct the error.
Possible scenario’s to discuss are:

 Incorrect amounts of the invoice
 Purchase order was incorrect
 Card number is not correct or card has expired
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Activity 1A
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1.2 – Examine supporting documentation to establish accuracy and

completeness and to ensure authorisation by appropriate personnel
Now that you understand the basic accounting equation and the importance of maintaining an eye
for detail to ensure that personnel make an informed decision based on facts, you should learn
about supporting documentation.
Supporting documentation aims to ensure that there is documentary evidence to support the
purchase of items of value and the receipt and payment of money. Source documents such as
invoices, purchase orders, cancelled cheques and cash receipts provide the evidence or proof that a
transaction actually occurred. This minimises the risk that people will steal cash or misappropriate
cash or other resource items as they make it easier to track and control the movement of cash
throughout the business.
Supporting documentation may include information that supports

the transaction such as:
Suspense reports
Suspense reports are utilised to provide information about
transactions in suspense accounts.
The suspense account is used to carry:

1. Doubtful debts
2. Discrepancies; and
3. Disbursements.
While in the account, they are analysed and given a permanent classification. For example; the
account numbers on cash receipts or journal entries can be placed into the suspense account until
they are analysed and the correct account is found or it may be a new client account that has not
been generated yet.
Reconciliations
A bank reconciliation is the process of checking debits and credits, such as cheque payments against
a bank statements. Cheque butts, cheque numbers, the name of the payment the account is going to
and the amount can be checked against the bank statement to confirm that the amount spent is
correct.
In the same manner, errors in cash receipts can be checked to make sure that debtors have paid
their account correctly or whether they have any outstanding payments to make to your account.
A bank reconciliation is performed at the end of the month and allows you to see all outstanding
cash payments or cash receipts that need to be paid so that you can have a true picture of the cash
amount currently within the bank.
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Bank reconciliations can be used to assist you by:

 Making sure that cheques do not bounce due to insufficient funds
 Overdraft fees
 Being used as a fraud detection device in checking whether customer cheques have
bounced or said cheques have been altered
 Being used as an early warning of a problem.
For example, if there is a sharp decrease in debtors paying their 30 day accounts, then your own bills
will be delayed. This means that your credit and reputation can be at risk. It is a sign that there is a
problem with the internal debit collection processes because a small variation could be acceptable
but when the amount of cash flow slows, then your ability to pay your own bills is impeded sending
out the message that your organisation does not have a good cash flow and is unreliable to pay its
bills on time.
Late payments will usually incur more fees and increase your defaults if not managed correctly.
Source documents
Other types of supporting documentation are source documents. A source document can be paper
based or in an electronic format. These documents are in the early part of the accounting process, as
shown on the next page.
The accounting process
Trial
Balance
General Financial
List general Reports
Business Ledger ledger
Transaction Journal
Documents Accounts accounts Profit And
External Summaries and Loss
Provide joined to
Financial of balances Statement
Transations evidence of form a
transactions
transactions picture of Used to Balance
the business check the Sheet
general
ledger
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Refer to Section 2.1 of this Learner Guide for more information about this process. It will be
discussed in more detail as you progress through the unit.
Source documents are raised when a business transaction is initiated. Documents focus on dates,
prices, quantities, product codes and payment options.
Source documents can include:

 Purchase orders
 Invoices (paper based on electronic)
 Cancelled cheques
 Delivery dockets
 Cash receipts
 Employee time sheets.
Source documents are a paper trail of a transaction and can be utilised to demonstrate that a
business transaction has occurred.
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Learning Task Two

What is the importance of a supporting document?
In your own words, briefly explain your understanding of a suspense report. Write this answer as
part of the body of an internal communication with another member of your team who sometimes
has a problem with words as English is their second language.
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Activity 1B
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2. Prepare and process banking and petty cash documents

2.1. Enter accurately and balance deposits and withdrawals according to organisational
procedures
2.2. Check cheques and card vouchers for validity before processing
2.3. Reconcile banking documentation with organisation’s financial records
2.4. Check, process and record petty cash claims and vouchers, and balance petty cash book
according to organisational procedures
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2.1 – Enter accurately and balance deposits and withdrawals according to

organisational procedures
Petty cash
For petty cash transactions, it is important to identify the amount of money that should be within
the petty cash container. Petty cash is money left in a secured box within the organisation in the
event that cash is required.
Petty cash is not usually more than $100.00. When the petty cash float
becomes low then organisational procedure should be followed. This
may mean that a request for a petty cash top-up is made or if you have
the authorisation, you may be able to process the request without
authorisation
In turn, care should be taken to ensure that you consistently follow

organisational policy and procedure for checking petty cash
transactions. This means that you will need to maintain the petty cash
book to track the authorised use of petty cash to ensure that there are
sufficient funds within the petty cash box.
Petty Cash documents are documents that are used regularly in most businesses. If you are assigned
the task of completing financial ledgers and accounts, including petty cash, it is imperative that you
maintain an eye for detail.
As with all financial service transactions, it is important that you are consistent in the manner in
which you check the documents and that you check the amounts.
Deposits
Organisational policy and procedures should be checked to make sure that you are clear on how
much cash should be within the petty cash. At the same time, make sure that you check the minimal
amount.
Money is deposited into petty cash in two main ways. In both instances money is withdrawn from
the bank so that you have cash to replace the amount taken from the account.
The main ways in which money is deposited into petty cash include:
 Bank Withdrawal
 Cheque.
Once an authorised member of the team authorises the amount, a member of the team is usually
required to go to a bank of the bank and withdraw the petty cash which must be updated within the
petty cash book.
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Withdrawal
When you complete a receipt in a petty cash voucher you are making a withdrawal from the petty
cash.
Petty cash voucher

When money is taken out of the petty cash box, it is an expense. Expenses are required to operate a
business. For example, a worker cannot buy office supplies if there are no expenses.
When an expense is generated, care must be taken to ensure that you complete a petty cash
voucher from a petty cash book.
When you process petty cash vouchers, it is important to check:
1. Date
2. Details of purchase
3. Value of sale
4. GST applicable
5. Signature of person authorising the purchase
6. Signature of person claiming reimbursement.
PETTY CASH VOUCHER NO.......................
Date........................... Account.....................................................................................
Amount..............................................................................................................................................
GST applicable $.................................................................................................................................
Being for.............................................................................................................................................
Signed................................................................... Authorised by.....................................................
Make sure that the receipt matches the petty cash voucher. It is important to check that the petty
cash voucher and the receipt match. The Petty Cash Book with the receipt attached to the voucher
should be kept in the petty cash box.
Take the time to check how the voucher is completed.
Petty Cash Purchases with GST in the price
1 2 3 4 5 6 7 8 9 10 11
Date Details Voucher Receipts Amount of Petrol Bus Tea Post Others Balance
20xx No. GST Fares
05.09.20xx Flowers 2 35.00 3.50 31.50 35.00
12.09.20xx Taxi Fare 3 15.50 1.55 13.95 15.50
23.09.20xx Petrol 4 22.20 2.22 19.98 22.20
30.09.20xx Postage 5 15.25 1.52 13.73 15.25
TOTAL 87.95 8.79 19.98 13.73 45.45 87.95
Your petty cash vouchers are:

Flowers 35.00 GST $3.50 05 September
Taxi Fare 15.50 GST $1.55 12 September
Petrol 22.20 GST $2.22 24 September
Postage 15.25 GST $1.52 30 September
30
Cash
To balance the petty cash, do not forget to count the money left within the petty cash tin. Even
though personnel are supposed to obtain authorisation to use the petty cash; they sometimes do
not. There are also occasions when personnel forget to hand in the receipt which will be used to
complete a petty cash voucher.
If the balance within the petty cash does not balance with the physical cash, you will usually need to
follow up to find out who accessed the petty cash and to obtain a receipt for the petty cash voucher.
31
P a g e | 32
Activity 2A
P a g e | 33
2.2 – Check cheques and card vouchers for validity before processing
2.3 – Reconcile banking documentation with organisation’s financial records
Cheques and credit card vouchers are two ways in which petty cash can be replenished. In many
instances, if you have been authorised to complete petty cash, you will usually be authorised to
complete these documents. As a means of control, only authorised personnel may be allocated the
responsibility to complete the documentation.
Before you take the document to the bank, take the time to check the document to ensure that it is
valid.
Validity in cheques and card vouchers is required to make sure that both documents can officially be
processed. For validity to be established, documents must demonstrate three main features.
These features include:
Amounts
Always check the amount on the document against the invoice to confirm that the client has paid
the correct amount. If less has been paid, make sure that the document shows the full amount
minus the amount to be paid and the outstanding balance. For example, if you have an account with
a company and pay a percentage each month, then make sure that the outstanding balance is shown
in the account details and the amount on the receipt is correct.
Dates
Some clients due to life demands or other extenuating circumstances, through choice prefer to use
paper based transactions and so may provide pre-dated ongoing cheques or authorisations to
charge their credit or debit cards. These authorisations may be also an authorisation in the event
that a transaction has to be processed and the internet or banking services are down.
Signature
Many organisations obtain signatures from their client, especially when
they use cheques and card vouchers. Always check the cheque against
the signature on hand, as per your organisational procedures.
Banks also keep a copy of the authorised signatories to a cheque

account. If you are not sure about a signature, they should be able to
confirm that the signature is correct and by the same hand on the
voucher and on the cheque.
Now let us look at both documents in more detail.
P a g e | 34
Cheques
A cheque is a bill of exchange. The use and distribution of cheque is governed by the Cheques Act
1986. Cheques are a common method of paying debts and as in other types of bills of exchange,
cheques are a safe way in which money can be transferred from one place to another.
A cheque will have the following details:

Drawee Bank
Payee
BANK LIMITED
Treasure Holdings, W.A. 23/06/20xx

10 Chives RD
Mulgrave VIC 3175
Pay: Ripley’s Retail Outlets___________________________________________________

The sum of: Ten Thousand Dollars ---------------------------------------------------------------- Only
A. Saunders
A. Saunders
(signed)
06363- 489548 8780 3458
Drawer
When preparing a cheque for processing, care should be taken to ensure that it is a legal document.
To check that a cheque is valid, ensure that:
 The cheque arrived addressed to you
 That the name on the cheque is correct and matches the address of their business
 That the name of the bank is correct
 That the cheque matches the amount on the receipt and the invoice
 That the signatures match
 That two lines cross the cheque with not negotiable
 That any correction on the cheque is initialled.
Failure to initial a change on the cheque can make the cheque null and void.
P a g e | 35
Credit card vouchers

As business technology becomes more complex, electronic funds transfers are becoming more and
more popular. However, even though use of the credit card voucher is wanning, some organisations
still use them.
Credit Card Voucher
Date: ....................
Description of Transaction Amount
Impress of Credit Card is

usually found here
Total
Cardholders Signature: ..........................................................
06465 565 4563454G
The card voucher requires:
 An imprint of the card
 A description of the transaction
 The date of the transaction
 The amount of the transaction
 The signature of the owner of the credit card
 Verify that the card is valid; and
 That the signature on the voucher matches the credit card.
Once the imprint has been made and the voucher is going to be processed, three copies of the
imprint are made and they go to:
1. The Bank
2. The Financial Service Organisation; and
3. The client
The card vouchers represent a receipt of the transaction.
P a g e | 36
P a g e | 37
Follow your organisation’s procedures in regards to verifying that the credit card is valid. The credit
card numbers are imprinted onto the voucher using an imprint machine. The owner will allow you to
make imprints of the card.
Make sure that you are clear on how to process the cheque and credit card vouchers after they have
been taken to the bank to be cashed. The petty cash may be paid from a general account. Who is the
person that you should report the transaction to?
Petty cash is a part of the general ledger which will be covered later in this Learner Guide. Failure to
report the transaction (which may mean that you are required to complete other documentation,
such as the cheque butt (see 2.2 of this Learner Guide for source documents)) may mean that the
petty cash does not balance, and that the accounts department does not have true knowledge of the
amount in the account, so other cheques may be dishonoured, which in turn means that your
employer will be charged a dishonour fee.
Banking requirements
All banks protect themselves from fraud and have clear procedures in place in regards to signatures
on cheques and credit card vouchers. They will not accept a credit card voucher or cheque if you are
not an authorised signatory to the account.
You can tell that you are an authorised signatory if you complete a banking document that
authorises you to act as your organisations representative. If you are not an authorised signatory
and you try to sign and process either document, then you may find yourself facing charges for fraud
or attempted fraud.
Security and petty cash

Conversely, it is essential that you understand and follow the organisations procedures for securing
petty cash. Nine times out of ten, petty cash is usually secured in a locked security box or within a
secured location.
Some of the procedures that may be in place to maintain the security of the petty cash may include:
 Do not give the key for the petty cash to another member of the team if they are
not authorised to handle the petty cash.
 Do not provide personnel with knowledge (other in the normal course of business)
of the location of the petty cash box
P a g e | 38
 Do not leave the petty cash box unsecured. Always close and lock away in the
allocated location.
 Keep all petty cash vouchers, books, receipts

and cash in one area.
Banking documentation is reconciled with organisation's

financial records
To settle petty cash, it is important to make sure that that the
petty cash is balanced. Find the procedures that apply in your
work area. To reconcile your banking documentation against the organisation’s financial records
requires that you:
1. Check receipts against petty cash vouchers and petty cash book
2. Check cheque stub against the petty cash book; and
3. Check cheque number against bank statement.
Before reconciliations are performed and before you continue with this Learner Guide, it is
important to make sure that you understand that you must not only be systematic in accounting,
you must also follow organisational procedure. These procedures are developed based on the
following criteria:
Corporations Act (including accounting standards)

The Corporations Act requires that accounting records are kept to accurately record all of their
transactions. These records must be prepared according to Accounting Standards so that the
accounts can be accurately recorded. Records must be kept for seven years and the records must be
available to directors or to auditors.
The reporting requirements differ for many organisations.
For more information about the Corporations Act, 2001 refer to:
www.innovation.gov.au
Accounting standards
Information about the different standards in Australian Accounting
can be found on the Australian Accounting Standards Board
(AASB) website:
www.aasb.gov.au
P a g e | 39
These standards set out how businesses should present financial statements, cash flow statements
and other financial information for tax purposes.
Financial Services Reform Act 2001 (FSR Act)

The FSR Act is the guidelines upon which nearly all financial service organisations operate. Much of
the information found in the FSR Act can be found or supported within the Corporations Act.
Industry codes of practice

Under the new regulatory framework, existing codes of practice have in nearly all instances modified
their codes. ASIC will have the power to approve a code being consistent with the law. ASIC should
also be consulted when codes of practice are reviewed or modified. Industry codes of practice
should be administered by Industry and it is not essential for an industry participant to be part of the
code of conduct.
Industry codes of conduct are developed by consumer groups and industry. The codes of conduct
are supported by the government especially as they are seen as a guarantee of quality services being
offered to consumers. They are also seen as a form of self-regulation.
Existing codes of conduct contain minimum standards which are aimed at best practice.
Industry codes of practice have been developed by a number of industry associations in the financial
services sector. Each code sets out the service standards that you can expect when dealing with a
company that subscribes to that code.
The industry codes of practice include:
 Code of Banking Practice 2013
 Consumer Credit Code
 ePayments Code
 Financial Planners Code of Ethics and Rules of Professional Conduct
 General Insurance Code of Practice.
Make sure that you download and identify the different policies and procedures that will impact on
the manner in which you process accounting standards within your sector of the Financial Services
Industry.
It is important to note that if your organisation is a member of a professional association, they will
have agreed to follow the industry codes of practice. This may mean that reports may need to be
presented to the professional association as evidence that the organisation is following their legal
obligations.
P a g e | 40
Members of professional associations demonstrate to the public and their customers that they are
meeting their minimal legal obligations set out under the law as per the organisational procedures
and the industry code of practice.
To reconcile your banking documentation against the organisation’s financial records, you will need
to:
Check receipts against petty cash vouchers and petty cash book
Make sure that the receipts, petty cash vouchers and the petty cash book match in terms of:
 Cash amounts and GST
 Dates
 Transaction details
P a g e | 41
Check cheque stub against the petty cash book
20/06/20xx Your cheque book will have a stub within the

PAY Petty Cash cheque book against which a signed cheque
has been completed.
FOR Petty Cash Tin
Discount Nil
Balance 892.73
Deposit 347.00
Balance 1239.73
This Cheque 95.00
Balance $ 1,144.73
56746
Check cheque number against bank statement
As the cheque has been released to the bank to withdraw the funds for the petty cash, you should
check the cheque number as shown in the check butt.
For example, the check the sample of a bank account statement against the cheque butt.
Bank of V
Alpha Financial Services

Church Street
Glen Waverley VIC 3150
From: 1 February 20xx

To: 28 February 20xx Cheque 63620 - 284387
Date Particulars Debit Credit Balance
$ $ $
Feb 19 # 56735 534 2,224 CR

Feb 21 # 56746 35 2,189 CR
Feb 21 Cheque 1,853 4,042 CR
Feb 26 # 56755 96 3,946 CR
Feb 27 # 56748 95 3,851 CR
P a g e | 42
If the amount is incorrect, then organisational procedures would need to be followed to correct the
error. Before performing these corrections, take the time to confirm that the error does not arise
out of an internal bank error.
More about bank reconciliation

When money is either deposited or withdrawn from your banking or cheque account; you will have a
transaction. This transaction is always associated with:
 Payments entering the account
 Withdrawals to pay bills.
Source documents are used to maintain a record of these transactions. To reconcile an organisations
account, it is essential that each transaction is checked to make sure that there is a corresponding
transaction. The purpose of checking the amount of money traversing through your account is to
know exactly what incoming or outgoing transactions are still owed to or need to be paid to the
organisation.
Using the same skills we have covered in the first sections of this Learner Guide, take the time to
make sure that the amount is checked against the appropriate source document. These are the first
steps of a bank reconciliation.
A bank reconciliation is performed monthly or upon request. All outstanding deposits should be
noted in the outstanding deposit file. The deposits into the account provide evidence that the client
has paid their invoice. Tracking withdrawals from your account demonstrates the bills that you have
paid and the cheques that have been paid. Any outstanding cheques should be identified so that you
can have a true picture of what outgoings your account still has so that your organisation has a true
picture of what is available within the specified account.
This information provides management with a true amount available in the account so that
management can make informed decisions for the organisation.
Activity 2B
43
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2.4 – Check, process and record petty cash claims and vouchers, and balance
petty cash book according to organisational procedures
Before petty cash can be posted to journals, it is essential that the petty cash book is balanced. Petty
cash claims can be raised against small incidentals, such as taxi or bus fares. These types of claims
can be raised when personnel are asked to work over time, for instance and the organisation agrees
to reimburse personnel so that they can return home early.
Organisational procedures may require that personnel are authorised to release petty cash in these
instances. Make sure that you take the time to check your organisations procedures in regards to
what you may be able to authorise and how much you are allowed to authorise. There may also be
procedures in place which require that a member of staff to authorise payment of claims. A petty
claim form may also be required.
Once a claim has been authorised, a receipt will be required and the petty cash voucher will need to
be raised to process the claim.
Be aware of:
 The amount that you allowed to authorise; and
 What you are allowed to authorise for.
Take the time to also check the way in which members of your team (who are authorised) should
authorise you to pay a petty cash claim. To track the authorisations, including who authorised which
claim, you may need to wait until this request is made in writing, which may merely mean an email,
or a document must be completed.
This ensures that there is a paper trail to ensure that petty claims are controlled and a record of
petty claims is maintained.
P a g e | 45
Petty Cash Book
1 2 3 4 5 6 7 8 9 10 11
Date Details Voucher Receipts Amount Petrol Bus Tea Post Others Balance
20xx No. of GST Fares
The headings within the petty cash book will vary according to the needs of the organisation. The
main headings for the petty cash book may include:
1. Date of the transaction
2. Details, such as what the claim is for
3. The petty cash voucher’s number
4. The amount of the receipt
5. The amount assigned to GST
Columns 6 – 9 Different types of claims that an organisation may have. Take the GST away from the
receipt amount and place this amount into the appropriate column.
10. Others may also be known as sundries. Sundries are claims that may not be found under
headings 6- 9.
11. The balance should include the amounts in each row starting from and including GST.
1 2 3 4 5 6 7 8 9 10 11
Date Details Voucher Receipts Amount Petrol Bus Tea Post Others Balance
20xx No. of GST Fares
TOTAL
12. Add the columns 4 to 10 and calculate amounts into the Total Row.
13. Add the Total Row from Amount of GST (Column 4) to others (Column Ten) amounts. Place the
calculation in Column 11 under Balance.
P a g e | 46
14. Calculate Column 11 (Balance)
15. Both the Total row and the balance should be equal.
16. These amounts must equal the receipts column.
17. If the balance column, total row and the receipts column do not make the same amount, then
the petty cash book does not balance, then an error has been made. This means that you should
review the petty cash vouchers.
Example
Cheque 000900 Cash 200.00
Flowers 35.00 GST $3.50 05 September
Taxi Fare 15.50 GST $1.55 12 September
Petrol 22.20 GST $2.22 24 September
Postage 15.25 GST $1.52 30 September
1 2 3 4 5 6 7 8 9 10 11
20xx No. GST Fares
05.09.20xx Flowers 2 35.00 3.50 31.50 35.00
12.09.20xx Taxi Fare 3 15.50 1.55 13.95 15.50
23.09.20xx Petrol 4 22.20 2.22 19.98 22.20
30.09.20xx Postage 5 15.25 1.52 13.73 15.25
TOTAL 87.95 8.79 19.98 13.73 45.45 87.95
47
Learning Task Three
Your supervisor provides you with the following transactions:
1. Complete the petty cash vouchers and enter them into the page of the petty cash
book that you have been provided with.
2. Balance the petty cash book.
3. Complete the cheque to ensure that the balance is $250.00 in Cash at the end of
the month

Cheque number: 009145 Cash $250.00
03.04.20xx
Account No 2145 $ 35.00 GST $3.50 Petrol
12.04.20xx
Account No 3543 $ 25.50 GST 2.55 Post
13.04.20xx
Account No 1234 $ 9.90 GST 0.90 Taxi Fare
15.04.20xx
Account No 3543 $23.30 GST 2.33 Post
23.04.20xx
Account No 7231 $15.50 GST 1.55 Office Supplies
24.04.20xx
Account No 4321 $45.75 GST 4.57 Tea
27.04.20xx
Account No 2345 $35.35 GST 3.53 Sundries
30.04.20xx
Account No 1234 $5.75 GST 0.57 Taxi Fare
48
P a g e | 49
Petty Cash Voucher NO......
Date........................... Account.................................................................................
Amount..........................................................................................................................................
GST applicable $..............................................
Being for.............................................................................................................................................
Signed................................................................... Authorised by......................................................
Date........................... Account.................................................................................
Amount..........................................................................................................................................
GST applicable $..............................................
Being for.............................................................................................................................................
Date........................... Account.................................................................................
Amount..........................................................................................................................................
GST applicable $..............................................
Being for.............................................................................................................................................
P a g e | 50
Date........................... Account.................................................................................
Amount..........................................................................................................................................
GST applicable $..............................................
Being for.............................................................................................................................................
Date........................... Account.................................................................................
Amount..........................................................................................................................................
GST applicable $..............................................
Being for.............................................................................................................................................
Date........................... Account.................................................................................
Amount..........................................................................................................................................
GST applicable $..............................................
Being for.............................................................................................................................................
P a g e | 51
Date........................... Account.................................................................................
Amount..........................................................................................................................................
GST applicable $..............................................
Being for.............................................................................................................................................
Date........................... Account.................................................................................
Amount..........................................................................................................................................
GST applicable $..............................................
Being for.............................................................................................................................................
1 2 3 4 5 6 7 8 9 10 11
20xx No. GST Fares
TOTAL
Other: Other includes anything not included at the top of the table. Sundries may also be used rather than other.
52
Complete the cheque to finalise and update the petty cash tin.
Cheque
Bank Limited
DATE:
Pay: ___________________________________________________________________
The sum of: _____________________________________________________________
(signed)
Who do you report this transaction to? Why?
53
P a g e | 54
Activity 2C
P a g e | 55
3. Prepare and process invoices for payment to creditors

and for debtors
3.1. Prepare invoices in accordance with organisational procedures
3.2. Check invoices against source documents for accuracy and correct any errors
3.3. File all invoices and related documents for auditing purposes
P a g e | 56
3.1 – Prepare invoices in accordance with organisational procedures

3.2 – Check invoices against source documents for accuracy and correct
any errors
The first time that you prepare documents, make sure that you familiar the detailed procedures
that your organisation has in place in the creation, authorisation and processing of financial
documents.
It has been reinforced in the first sections of this Learner Guide, you must check that information
is correct and accurate within the document and that they meet both organisational and
legislative requirements.
Make sure that you pay as close attention to your invoices.
Make sure that you validate the invoice by checking:

 The calculations are correct
 The credit check has been performed for the correct debtor before any debt is
generated
 The goods were ordered by the debtor
 The goods or the invoice were sent to the correct location
 The invoice
 That the invoice is printed in triplicated as required by law
 That the invoice is validated by a supervisor or an authorised member of the

team.
Many organisation manually produce validation slips that provide the list of items to be checked
before the invoice is dispatched. This validation slip is signed after everything has been checked.
P a g e | 57
Raising and receiving invoices

Invoices are raised when goods are sent to a client. The client will usually raise a purchase order.
Once the order has been processed, then an invoice is sent to the client stating the amount due.
P a g e | 58
TAX INVOICE ABC Financial Services

Invoice Number 85 25 Ashburton Street
Kingsley WA 6026
Sold to: Peter Falk Phone: 8458 1234
24 Ashburton Court
Subiaco WA 6008 Date: 08 October, 20xx
Terms: 5/7, net 45
Particulars Quantity Rate $ ₵
Financial Product No. 2345 1 890.00 890 00
Category: Insurance
Financial Product No: 179 2 196.00 392 00
Category: Shares
GST 120 00
1402 00
10% GST has been added to the invoice and the amount payable is $1402.00. A discount of 5% is
given if the account is paid within 7 days. The client has forty-five days in which to pay this
account.
Supplier tax invoice

A supplier tax invoice is raised by the supplier when your organisation raises an order from the
supplier. Your organisation has purchased office supplies from Ergo Office Supplies on credit. Ten
per cent GST has been added and the total payable is $738.70.
A discount of 3 per cent is given for payment within 10 days. The full amount is due in 30 days if
payment is not received in 10 days.
P a g e | 59
TAX INVOICE ERGO OFFICE SUPPLIES

Invoice Number 53485702 Leith Business Park
Leith, TAS 7315
Sold to: ABC Financial Services
25 Ashburton Street
Kingsley WA 6026
Phone: 8458 1234
Date: 15 October, 20xx
Particulars Quantity Rate $ ₵
Printer Ink and Toner 5 96.00 480 00

Canon MG4250 PIXMA
Printer Paper
6 31.95 191 70
GST 67 00
738 70
Terms 3/10, net 30
Check your organisations policies and procedures to make sure that you have checked all
correctly. If any discrepancies are found then make sure that the invoice is corrected before it is
forwarded to the debtor. If the error is not found until after the invoice is sent, then follow your
organisations procedures.
Failure to identify errors within invoices demonstrates to the client that there are problems with
internal control measures within the organisation. To avoid this, make sure that you check all
outgoing invoices as per your organisations procedures.
Processing documentation
Documentation, such as other source documents that are used to process orders should be
checked to ensure that all of the appropriate information is provided. This information includes:
 Australian Business Number (ABN)
 Company name, address and contact details
 Customer/supplier details
 Date
 Document number
P a g e | 60
 Document title
 GST if applicable
 Terms and conditions, where applicable are stated clearly
 That calculations are accurate and are totalled correctly
 That documents are prepared in triplicate where applicable.
The source documents that the invoice should be checked against include the purchase order and
if applicable the delivery docket. The purchase order identifies what the customer requires and
the delivery docket must show what is provided in each order, so that the store man or receiving
clerk can physically check the stock against the delivery docket.
Discrepancies and errors

When a discrepancy is identified, then the problem must be corrected before the invoice is sent
to the debtor. If the discrepancy is identified after the invoice is sent, report it to your supervisor.
Errors in invoices indicate that the organisation does not have good internal procedures and this
could lose the confidence of the client.
P a g e | 61
Learning Task Four

What are the correct procedures that you would need to follow if an error is identified after the
invoice has been sent?
Who would you need to report this event to?
How would you seek the impact of this error with the client? In what way do you feel this will
assist you?
P a g e | 62
Activity 3A
P a g e | 63
3.3 – File all invoices and related documents for auditing purposes
An invoice, like the following documents are source documents. It is important that you
understand the following source documents:
1. Identify the purpose of the document; and
2. The information contained in the document.
Credit card vouchers and Cheques have been checked in Section 2.1. Other source documents
include:
Adjustment note
Adjustment notices are evidence of a refund, return or an adjustment due to errors. When an
adjustment note is completed, make sure that you do not forget to make adjustments within the
appropriate ledgers, which will be covered in the next few sections of this Learner Guide.
In this transaction, L Financial Services offers F Dimes 10% refund based on supplier request on a
purchase.
Adjustment Note L Financial Services

Adjustment Note: C234 ABN: 75 696 489 459
36 Charles Street
Fawkner VIC 3060
Sold to: F. Dimes Phone: 9359 0000
246 Lake Street
Batemans Bay NSW 2535 Date: 09/06/20xx
Particulars Quantity Rate $
Supplier disc 10% 1 960.00 96 00
GST 8 73
104 73
Finance at its best
P a g e | 64
Adjustment note – supplier

L Financial services has returned a faulty Print cartridge back to Vista Print and Copy Supplies.
Adjustment Note Vita Print and Copy Supplies

Invoice Number: CN0098 ABN 857 949 900 000
18 Main Street
Wangaratta VIC 3677
Sold to: L Financial Services Phone 9898 0000
24 Ralston Ave
Subiaco WA 6030
Print Cartridges 1 56.00 56 00
GST 5 09
Total Amount
61 09
Visionaries
P a g e | 65
Cash register slip
L Financial Services
ABN: 75 696 489 459
Tax Invoice
House Insurance 693.50 On 6 June, 20xx, L Financial

Excess Removal 35.00 Services sold house
insurance plus excess
GST 66.23 removed. The amount of
Total $794.73 $66.23 was added for GST.
The goods were paid by
Cheque $794.73 cheque.
Change 0.00
Retain for tax purposes
20/06/20xx 2.23 PM 340 340932
Cheque butt
20/06/20xx
PAY Vista Print and Copy
Supplies
FOR Payment of account

On 20 June, 20xx, L Financial
Services issued cheque number Discount Nil
56746 Vista Print and Copy
Supplies as part of the owing for Balance 892.73
part payment of amount owing
on their account. No discount Deposit 347.00
has been taken. Balance 1239.73
This Cheque 700.00
Balance $ 593.73
56746
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P a g e | 67
Cheques Received Listing
DATE: 06 July 20xx
Payer Bank Branch BSB Cheque No. Amount $
P. Walkens CBA 063-0xx 000212 72.95
A. B. Robins Westpac 083-2xx 009719 60.00
The listing is used to show all of the cheques that L Financial Services received on 06 July, 20xx.
EFTPOS docket
On 05 June, 20xx, L Financial Services

received a $50.00 EFTPOS payment from
a customer.
P a g e | 68
ABN: 75 696 489 459
36 Charles Street Fawkner VIC

3060
Phone: 9359 0000
Merch ID 586749
Term ID 44374
Country Code: AU
Date: 05.06.20xx Time: 14:10
RRN 00854 965654
MasterCard
xxxx xxxx xxxx 0566
Expires: 04/17
Approved 01
Auth No: 3432
Purchase: $ 50.00
Total AUD $ 50.00
P a g e | 69
Receipt
L Financial Services received a payment of $484.27 from F Dimes on 25th July, 20xx. Receipt
Number: 122.
ABN: 75 696 489 459
36 Charles Street Fawkner VIC 3060

Phone: 9359 0000
RECEIPT NO: 122
Date: 18.06.20xx
Received from: F Dimes
For: Payment of Account
Amount Four Hundred and Eighty Four dollars and Twenty seven cents
Amount: $484.27 Cash/Cheque
Discount No
Authorising signature:
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Tax invoice
TAX INVOICE L Financial Services

Invoice: 3456 ABN: 75 696 489 459
36 Charles Street
Fawkner VIC 3060
Sold to: F. Chimes Phone: 9359 0000
246 Lake Street
Batemans Bay NSW 2535 Date: 30/09/20xx
Life Insurance Policy L345-67 1 960.00 960 00
Excess Removal 1 75.00 75 00
Total Amount
1036 00
Finance at its best Terms 3/7, 1.5/30, net 45
This document is proof that goods and services were supplied and the amount due.
Terms of payment are a 3% payment if the amount is paid within 7 days and 1.5% if the amount
is due in 30 days. The amount owing is due in 30 days.
GST
Goods and service taxi is tax levied on goods and services. This rate will vary according to the
classification of the goods and services. For the purposes of the following exercises, assume all
goods and services are taxable at 10%.
Visit the Australian Taxation Office (ATO) website at www.ato.gov.au for information on GST-
exempt goods.
To calculate GST:
If the financial services product purchased cost $185.00. Divide the cost by 11 to determine the
amount of GST.
$185.00 divided to 11 = $16.82
$185.00 - $16.82 = $168.18 (actual cost of the item).
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The GST of $16.82 is exactly 10% of the actual cost.
The GST claimed by a business registered for GST who pays GST on the purchase of goods and
services for business use can claim the GST paid as an Input Tax Credit from the ATO at the end of
the reporting period.
Statement of account
The purpose of statement of account is sent at the end of the month itemising all of the
transactions for the period and stating the amount that is outstanding. The amount should show
the balance owing, including all sales, returns, payments received and discounts given.
Statement of Account
ABN: 75 696 489 459

36 Charles Street Sold to: F. Tuck Fawkner VIC 3060
345 Piazza Ave Phone: 9359 0000
Bateman’s Bay NSW 2536
Date: 05 June, 20xx
Date Reference Particulars Debit Credit Balance
01.06 Balanced forward $0.00
05.09 Invoice 3456 Sales and GST 1036.00 $1036.00
09.06 Adjustment Note C234 Sales Return and GST 104.73 931.27
18.06 Receipt Cash at Bank $484.27 447.00
Ageing: 0 – 30 DAYS 30 – 60 DAYS 60 – 90 DAYS 90+ DAYS
73
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All invoices and related documents are filed for auditing purposes
Financial Service Organisations are usually required (depending on their sector of the Financial Services
Industry) to participate in annual audits, either from:
 APRA (Australian Prudential Regulation Authority)
 ASIC (Australian Securities and Investments Commission)
 AUASB (Auditing and Assurance Standards Board)
 AASB (Australian Accounting Standards Board)
 AFSA (Australian Financial Security Authority)
 AUSTRAC (Australian Transaction Reports and Analysis Centre)
 FRC (Financial Reporting Council)
To meet the requirements of these audits, organisations will have policies and procedures on how to file
information to ensure consistency occurs, making files and folders easy to access and for workers and
auditors to access information for auditing purposes. These procedures increase the efficiency of the
audit and will improve productivity.
There are two main types of filing systems that an organisation may have. The one chosen is usually
determined by the size of the organisation and their needs. The filing systems include:
1. A centralised filing system where all files are sent to one location.
2. A decentralised filing system is when files are kept in departments rather that in an
office on the other side of the country
Many organisations have a mixture of centralised and decentralised filing systems. This system
overcomes the delay that customers would obtain when they have to wait for information in a solely
centralised filing system. This means that they would also have to take the costs of national calls if the
organisation does not have 1800 numbers.
To be responsive to the needs of the customer, information would now be found in the appropriate
department or office. When an organisation chooses to use a centralised system, they will usually still
offer the advantages of a decentralised filing system by providing offices with either photocopies or
electronic copies of the documentation relevant to their specific region.
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Organising files
The information stored in an organisation will also require that personnel
store information in a consistent manner. Files can be stored:
 Alphabetically – where information is stored under the

customer’s name.
 Numerically – To ensure that customer privacy is

maintained, a customer may be assigned a numerical or
alpha numerical number that is used to identify the
customer within the file. The number or alpha numerical
number is usually the client account.
 Key words – Information may be filed as per specific key words so that information can
be easily identified for auditing.
 Geographical Location – Filing information is organised based on regions so records can

be easily identified.
When storing and handling files and folders, make sure that you are familiar with the procedures to
handle the files. You may be required to complete a form or enter that you have taken the file from the
filing cabinet. In most cases, you would be required to sign the file back into the storage area. In the
same manner, make sure that you follow organisational procedures. These procedures are put in place
to ensure that all customer files are secured and are easily accessible at the request of auditors.
The information within files are usually sorted by chronological or date order. Documents are placed at
the front of the file as they are filed. Personal client information may be provided on the front in sleeve
of the file.
Archives
Most organisations will archive information after twelve months. Data archiving can be both electronic
or in hard copy that are no longer actively used. This could mean that the client is deceased, left the
country or was a client. Depending on your sector of the Financial Services Industry different
requirements may be needed.
For example, some auditors may be happy to view electronic copies, for instance, to identify trends or
clarify how long a similar process has occurred. Conversely, auditors may prefer to view original
documents to ensure that the information provided is correct.
Many organisations are restricted on the amount of storage space that they have. As a consequence,
many businesses throughout Australia resort to secured storage facilities. This does not mean that when
an audit occurs that you automatically take the information out of storage. What it means is that you
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should know where the storage facility is and how long it would take to access any files that the auditor
requests outside the normal requests. In this manner, you will be able to actually be able to provide the
auditor with an idea how long it will take to obtain any files that are archived.
Archived files are usually archived in the same manner in which the files are stored within the main
storage file.
When handling files, make sure that you are not only familiar with your organisations procedures in
keeping client information secure, but that you also are aware of confidentiality and privacy law.
Confidentiality and the Privacy Act, 1988
Privacy and confidentiality of personal records

There are two different forms of confidentiality that will impact on your actions. They are:
 Section 271 of the WHS Act has strict instructions regarding the control of private
information.
 Privacy Act, 1988 regulates how your personal information is handled; including:
o how your personal information is collected
o how it is used and disclosed
o its accuracy
o its security; and
o general rights to access the information.
Personal information is information that is used to identify workers. Personal information can include:
 Your address
 Your medical records
 Bank account records
 Photos; and
 Information about what you like, your opinions, your work and your full name.
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Learning Task Five

It is essential that you understand the filing process within your workplace. Outline this process,
including how files are archived.
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What steps do you need to follow to ensure that the client’s files (physical and electronic) are secured?
Hard copy Electronic
i.e. Sign file in and out of storage area i.e. Never provide other team members with user
name or password
If you leave file unattended or have no proof that you passed a file to another member of the team and
the client’s personal information is divulged, you can be held liable which may mean instant termination
of your position.
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Activity 3B
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4. Prepare and post journals and batch monetary items

4.1. Prepare journals accurately and completely, and batch items within organisational timelines
4.2. Match batch items precisely to initial receipt records
4.3. Ensure journals are authorised by appropriate person and process in accordance with
organisational policy and procedures
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4.1 – Prepare journals accurately and completely, and batch items within
organisational timelines
The Accounting process
Trial Balance
General List general Financial
Business Ledger ledger Reports
Transaction Journal accounts
Documents Accounts Profit And
External Summaries and Loss
Provide joined to balances
Financial of Statement
evidence of form a
Transactions transactions Used to
transactions picture of Balance
the business check the
general Sheet
ledger
Now you have all of the source documents that are used to provide a paper trail of the purchase order,
the processing of the order through to payment so that a general ledger can be completed and financial
reports developed so that management will know the financial position of the organisation and can plan
future budgets.
In the preparation of journals, it is essential that you check each document individually for any mistakes.
The main points of information that should be checked against various documents include:
 The name of the document
 Date of the document
 Document number
 Company name, address and contact details
 Australian Business Number (ABN)
 Customer/Supplier Number, details, order or invoice numbers (as applicable)
 GST if applicable and make sure that it is clear and accurate
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 Totals (both amounts and number of documents) is accurate
 Cheque butts are completed correctly.
As the sale of goods and services are a main source of revenue, it is important to make sure that these
documents are accurate.
The purpose of financial journals is to batch source documents such as cheque butts and receipts to
make the processing of information simple and less time-consuming. For this reason, information within
source documents are transferred into journals.
Journals may include:
General When a transaction cannot be entered into the following journals, then
they are entered into the General journal. The General Journal contains
separate, unrelated transactions. This journal, unlike those listed below is
not totalled at the end of the month.
Cash receipts The cash receipts journal records all of the cash received.
Cash payments The cash payments journal records all of the cash payments made by an
organisation.
Sales The sales journal records credit sales of stock made by the organisation.
Purchases The purchases journal records all of the credit purchases that the
organisation makes.
Returns and allowances fall under two categories. They are the:
1. Sales return and The sales return and allowances journal records the return of sales on
allowances journal credit and any changes to prices for other reasons.
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2. Purchases return The purchases return and allowances journal records the return of stock
and allowances on credit and any changes for prices for other reasons.
journal
The information found in these journals are then summarised into ledger accounts and a trial balance is
prepared.
It is important that you always double check the information that is prepared for journals. This
information supports you in the event of questionable transactions during an audit. Accurate
information ensures that your journal entries are correct. Checking the journal transactions, ensures
that any errors within the journal are identified and appropriate actions are taken to overcome and
minimise the problem.
Preparing journals accurately and completely means:
Meaningful notation
When an inaccurate journal entry is identified, make sure that you take steps to connect the inaccurate
entry with corrections. It is essential that an auditor or team member can identify an inaccurate entry
and the corrections made. A meaningful notation ensures that connections are made between journal
and ledger transactions.
Effective date specified

Make sure that dates are correctly and accurately noted. This ensures that the team and business know
when a transaction occurs. Incorrect information can lead to incorrect and uninformed decisions. Trial
balances can be requested any time during a period. If the information is not accurate and up to date,
bad decisions can be made. For instance, an organisation decides not to take out a loan. The problem is
that at the time the trial balance was performed, a delay occurred transferring money from an account
and the organisation believed that they had more available cash.
Correct allocation
The allocation of resources must be clear. If your transaction demonstrates that a full payment of an
account has been made, then follow up communications may not be performed and the flow of cash
through the organisation will be impacted. There are many stories of organisations closing because
payments and other transactions were not paid because it was presumed that an account was closed.
Make sure that you check the supporting documents and the bank statement to make sure that you are
clear on what is paid and the amount paid and the amount owing.
Balanced transaction
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Make sure that the bank reconciliations, statements and trial balances balance. If any of these do not
balance, then a mistake has occurred or you missed a transaction. This means that you will need to
check all transactions. The more experience that you obtain, the faster you can resolve the problem. It
could be as simple of working out the difference between the credit and debits and then checking to
make sure that there are any transactions with the same amount, to checking each transaction because
there may be more than one problem.
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Journals assist in making business accounting easier for personnel. Consider all of the advantages of
journals. These advantages include:
 Making information easily accessible
 Presenting information in chronological order
 Making it easier for management to find specific information
 Allowing it easier for the division of work roles, such as into debtors and creditors
 Making sure that information is recorded in a concise manner
 Making sure that information posted to the ledger is made easier; and
 Allows management to interpret information is an easier format.
Journals can be presented in manual or an electronic format.
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Journals
Source documents are recorded into the journals and these journals entries are transferred into the
General, creditors and debtor’s ledger and then made into financial report.
Cash Receipts
Receipts
Journal
Subsidiary
Sales
Debtors
Journal
Sales returns
Adjustments Journal
Sales
Sales Journal
General Ledgers
Invoices
Financial Reports
Cash Payments
Cheques
Journal
Subsidiary
Creditors
Purchases
Journal
Purchases
Adjustments Journal
Purchase
Purchases
Invoices Return Journal
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Credit transactions are presented in the:

 Sales journal
 Sales returns and allowances journal
 Purchases
 Purchases returns and allowances journal.
Credit journals present goods purchased or sold on credit and summarise information such as
adjustment notes and/ or tax invoices.
Sales journal
Tax invoices are provided to credit customers (debtors). A tax invoice is generated when financial goods
or services are purchased or sold on credit. All invoices should be prepared and checked for accuracy.
As an employee of a financial service organisation, you are employed in a service organisation. The sales
journal is completed for services or fees generated. The sales journal is used to record credit sales of
trading stock.
Do not include cash sales or debtors’ payments. These transactions are posted to the cash receipts
journal.
Sales Journal
Date Debtor Folio Tax inv. Sales GST Payable Total
No $ $ $
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The sales journal headings (as shown above) show:
Heading Explanation
Date Date of the invoice
Debtor The name of the person purchasing goods on credit
Folio Ledger Account Number (see Section 5.1 of this Learner Guide).
Tax invoice number The invoice number
Sales The price of the product or service plus GST
GST The amount of GST Payable on the goods being purchased
Total The amount payable on the invoice (includes sales price of the product
plus GST)
The credit sales shown below must be entered into the sales journal.
Date: Transaction Document number

August 5 Credit sale to A Peaks $1409.09 plus $140.91 GST Tax Invoice No. 0023
9 Credit sale to B. Lines $409.09 plus $ 40.91 GST Tax Invoice No. 0024
20 Credit sales to C. Mount $1095.45 plus $109.55 GST Tax Invoice No. 0025
25 Credit sales to D Hill $227.27 plus $22.73 GST Tax Invoice No. 0026
29 Credit sales to E. Cloud $177.27 plus $17.73 GST Tax Invoice No. 0027
31 Total the Sales and GST Payable Columns. Add the columns.
If the amount does not equal the amount of the Total Column, then an error has occurred.
That is: Add Sales and GST Payable rows and place the final amount in the Total Column.
Add the Total Column.
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The Total column must equal the Sales and GST Payable Totals.
Sales journal
Date Debtor Folio Tax inv. Sales GST Payable Total
No $ $ $
05.08.20xx A. Peaks 0023 1409.09 140.91 1550.00
09.08.20xx B. Lines 0024 409.09 40.91 450.00
20.08.20xx C. Mount 0025 1095.45 109.55 1205.00
25.08.20xx D. Hill 0026 227.27 22.73 250.00
29.08.20xx E. Cloud 0027 177.27 17.73 195.00
31.08.20xx Monthly totals 3318.17 331.83 3650.00
Sales return and allowances journal

Adjustment notes (credit note) are the source document for the sales return and allowances journal.
The sales return and allowances journal is maintained to record the return of goods purchased for credit
plus any allowances. There may be damage to the goods or the goods delivered may be incorrect.
Make sure that you check any adjustments for accuracy.
Adj. Sales return GST

Date Debtor Folio Note $ Payable Total
no. $ $
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The sales return and allowances journal headings (as shown above) show:
Heading Explanation
Debtor The name of the person purchasing goods on credit
Adjustment Note No Number of the adjustment note
Sales returns Value of the credit given for the returns, excluding the GST Payable
GST Payable The amount of GST Payable on the goods being purchased
plus GST)
This journal is totalled in the same way as the sales journal.
Peaks (a debtor of your organisation) returns goods totalling $120.00, including $10.91 GST. The
adjustment note is CN. 125, provided on August 10. This must be included in the sales return and
allowances journal.
Sales returns and allowances journal

no. $ $
10.08.20xx Peaks CN125 109.09 10.91 120.00
25.08.20xx D. Hill CN126 180.00 18.00 198.00
26.08.20xx A. Peaks CN127 141.82 14.18 156.00
Monthly Total 430.91 43.09 474.00
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The amount returned to Peaks will reduce the amount owed by Peaks (the debtor).

no. $ $
Monthly Total
Purchases journal
The Purchases Journal (PJ) records credit purchases of trading stock from supplier. This journal is used
for credit purchases. Cash payments are recorded in the cash payments journal.
Tax invoices are the source documents for the purchases journal. These tax invoices are provided by
creditors. When a tax invoice is received from a creditor, check it for accuracy and validity.
Purchases Journal
Date Creditor Fol Tax inv. Purchases Input Tax Total
No. $ Credits $
$
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The purchases journal headings (as shown above) show:
Heading Explanation
Creditor The name of the person supplying goods on credit
Tax Invoice No Number of the invoice
Purchases Purchase of goods at buying price from creditor, excluding GST
Input Tax Credits The amount of GST that is charged
plus GST)
This journal is totalled in the same way as the sales and sales return journal.
As with the sales journal, make sure that you:
1. Record each tax invoice in date and invoice number order
2. That all invoices (even the cancelled invoices) are recorded so that no invoice is
accidently missed
3. Record the whole amount of the invoice and not the individual transactions.
Unlike with the sales journal, the tax invoice numbers are not in consecutive order because the tax
invoices are not generated internally by the organisation, but are supplied by separate creditors.
In your calculations make sure that the monthly totals within the purchases and Input Tax Credits (ITC)
equal the total column. If they do not, then there is an error in your calculations.
Purchases return and allowances journal

The purchases returns and allowances journal is used to record returns of trading stock to creditors
(supplier). This record will include any allowances. Like the sales return and allowances journal, returns
may include damaged goods or overcharges for the goods.
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Adjustment notes are the source document for the purchases return and allowances journal. Make sure
that all adjustment notes are checked for validity and accuracy.
Date Creditor Fol Adj. Purchases ITC Total

note returns $ $
no. $
The purchases return and allowances journal headings (as shown above) show:
Heading Explanation
Creditor The name of the person supplying the goods on credit
Adjustment Note No Number of the adjustment note
Purchases returns Value of the credit given for the returns, excluding the GST Payable
Input Tax Credits The reduction of ITC arising from the return of purchases
Total The amount payable on the adjustment note. (includes sales price of the
product plus GST)
This journal is totalled in the same way as the sales, purchases and sales return journal.
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Cash journals
The sales and purchases return journal are used to handle credit purchases or sales. The sales and
purchases return and allowances journal are geared to handle any returns of credit purchases or sales.
The last two journals; the cash receipts journal and the cash payments journal aim to record the flow of
cash into and out of the organisation. Cash is essential in paying the expenses, liabilities and creditors.
When handling cash receipts and cash payments journal it is essential that you:
 Follow organisational procedure and bank the cash as required
 Record all cash transactions immediately
 Regularly check the cash receipts and cash payments journal against bank statements
to ensure that they are correct.
Make sure that you are familiar with the procedures for handling cash in your workplace.
Cash receipts journal

Cash register rolls (CRR), cheques received listings, EFTPOS summaries and direct credits are shown in a
bank statement. These transactions should be recorded within the cash receipts journal as they occur.
Receipts are given when a customer purchases a financial good or service. Receipts may include:
 Cash register dockets
 Computer generated receipts
 Credit card docket
 EFTPOS dockets or
 Hand written receipts
Payments that are recorded within the cash receipts journal include:
 Cash sales
 The owner’s capital contributions that are made in cash
 Payments that have been received from debtors
 Other sources, such as revenue from interest or commissions.
Make sure that you follow organisation procedures in regards to the generation of receipts within your
organisation. Receipts are legal documents that provide evidence that payment has been received.
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Date Particulars Fol Rec. Gst Disc Dr Cash GST Sundries Bank
No Adj. Exp $ Sales Payable $ $
$ $ $ $
The cash receipts journal headings (as shown above) show:
Heading Explanation
Date Date of the cheque
Particulars Who you are paying and what you are paying
Folio Ledger account number (You will not be using the folio for this unit of competence)
Cheque Number The number of the cheque
ITC adjustment The amount of GST (Input Tax Credits) due to the discount received.
Discount received The amount of discount received from creditors
Creditors (accounts payable) The amount paid to a creditor
ITC The GST paid
Wages Amount employees are paid
Sundries Items that fall into other categories such as petty cash and donations
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Bank The amount of each cheque
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Cash payments journal

Cash payments are recorded within the cash payments journal. We have covered money coming in to
the business. Now we will cover money paid out.
Payments include:
 Drawings of cash by the owner (Withdrawal of money, called drawings)
 Expenses that occur daily, such as electricity, rent and wages
 Interest and bank fees.
 Payments to creditors
 Purchases that are paid by cheque, EFTPOS

or direct transfer or debit.
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Cash Payments Journal
Date Particulars Fol Chq ITC Disc Credit Purch ITC Wages Sund Bank
20xx No Adj Rec $ $ $ $ $ $
$ $
The cash payments headings (as shown above) show:
Heading Explanation
Date Date of the cheque
Particulars Who you are paying and what you are paying
Folio Ledger account number (You will not be using the folio for this unit of competence)
Cheque Number The number of the cheque
ITC adjustment The amount of GST (Input Tax Credits) due to the discount received.
Discount received The amount of discount received from creditors
Creditors (accounts payable) The amount paid to a creditor
ITC The GST paid
Wages Amount employees are paid
Sundries Items that fall into other categories such as petty cash and donations
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Bank The amount of each cheque
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Learning Task Six

Complete the following journal entries.
Total the journals.
R & S Phillips have recently opened Premier Financial Services on 03.01.20xx. A source document
dealing with R & S Phillips’ contributions has been prepared below.
Complete the following transactions in the appropriate journal.

Date: 20xx Transaction Document Number
January 03 Cash $24,400.00, Stock $3,200.00, Creditors $800.00 Memo dated

03.01.20xx
Loan – Allied Credit Union $3,800.00. Determine the
Owner’s Equity
05 Debtor – K.P. Morgan paid account (owes $1,100) $389.00 Receipt Number 905
Discount allowed $16.50 including GST
Debtor Raj Binder paid account (owes $1200) $202.00 Receipt Number 906
06 Purchased Furniture and Fittings from Regional Office Tax Invoice No. FF6574
Furniture Experts $2,500.00 including GST
08 Owner withdrew $2000.00 of supplies for own use Memo date: 08.01.20xx
Including GST
09 Cash sales $485.00 including GST CRR
10 Credit Sales to E. Square $258.00 including GST Tax Invoice No. 571
11 Credit Return of goods to R. Singla $15.00 including GST Adjustment Note

ED349
13 Organisation sold office desk to debtor – R. Metica for Tax Invoice No. 2226F
$150.00 including GST
15 Credit purchase from L. Mann $850.00 including GST Tax Invoice E123
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Credit Sales to Raj Binder $1357.00 including GST Tax Invoice No. 572
Purchase supplies for cash $1630.00 including GST Cheque Number 833
Commission received from P. Jones $747.00 including GST Receipt Number 907
$80.00 cash was incorrectly entered into the Advertising
account instead of the Insurance expense Account Tax Invoice No. I834
Paid Creditor – T. Walsh (owed $2000) $1369.00 Cheque Number 834
Discount received $22.00 including GST
17 Paid Rent $1800.00 including GST Receipt Number 835
Credit returns to E. Peterson $7.60 including GST Adjustment Note AB1
20 Credit Sales to R. Metica $457.00 including GST Tax Invoice No. 573
Debtor – AB Consulting paid account (owes $1326) $1245.00 Receipt Number 908
21 Interest expense of $6.25 to E. More for overdue account
22 Credit Sales to R. Beta $336.00 including GST Tax Invoice No. 574
Paid Wages $3500.00 Cheque Number 836
Credit purchase from T. Quirk $950.00 including GST Tax Invoice E23
Paid Creditor K. Niall (owes $2400.00) $2359.00 Cheque Number 837
Discount Received $27.50 including GST
23 Credit return of goods to R. Metica $69.00 including GST Adjustment Note R455I
24 Debtor – E. Square owes money on their December account
and are 30 days overdue in making payment Owe $7.30 in
revenue
Cash sales $537.00 including GST CRR
Cash sales $835.00 including GST CRR
Debtor – A. Lupine paid account (owes $990) $890.00 Receipt Number 909
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26 Credit purchase from A. Lowe $128.00 including GST Tax Invoice TS78
Credit returns to R. Office Supplies $25.00 including GST Adjustment Note TS34
28 Credit returns to T. Quirk $5.00 including GST Adjustment Note LB98
Debtor – A. Peaks purchased fittings from the organisation Tax Invoice 2468
For $880.00 on 28 January. Incorrect entry into the sales journal
instead of the general journal.
Paid telephone $135.00 including GST Cheque Number 838
Credit return of goods to D. Twine $15.00 including GST Adjustment Note EI223
29 Letter written from solicitors was received 29.01.20xx Letter dated 29.01.20xx
informing it that Debtor – A. Lowe has been declared
Bankrupt with no chance of recovering the money. A Lowe
owes $928.00
Purchase supplies for cash $145.00 including GST Cheque Number 839
Credit Sales to Aman Kaur $821.00 including GST Tax Invoice No. 575
Credit Purchase from R. Mahmood $256.00 including GST Tax Invoice AV109
30 Debtor Raj Binder, also a Creditor offset $265 owing Memo dated 30.01
Against $500.00 it owes
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Premier Financial Services
General journal
Date Particulars Folio Debit Credit
x20xx $ $
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Date Particulars Folio Debit Credit
x20xx $ $
Sales journal
Date Debtor Folio Tax inv. Sales GST Total

Payable
20xx No $ $
$

no.
20xx $ $
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Purchases journal
Date Creditor Fol Tax inv. Purchases Input Tax Total

20xx No. $ Credits $
$
Date Creditor Fol Adj. Purchases ITC Total

20xx note returns $ $
no. $
20xx No Adj. Exp $ Sales Payable $ $
$ $ $ $
109
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Cash payments journal

Date Particulars Fol Chq ITC Disc Credit Purch ITC Wages Sund Bank
20xx No Adj Rec $ $ $ $ $ $
$ $
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Activity 4A
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4.2 – Match batch items precisely to initial receipt records
Batch items are:

Grouped receipts treated as a separate transaction entity.
Batching is the process of aggregating invoices and receipts into groups to be paid or into groups or
batches that make one entry in accounting records for the entire batch of invoices. This is opposed to
individual journal entries for each payee.
Batching is common to reduce journal entries and helps the accounting system operate more efficiently.
When you work for a large organisation that has hundreds of transactions a day allows management to
quickly see the financial position of the organisation and the burden of hundreds of entries is alleviated
through batching.
To batch information, such as invoices it is important to understand the journals the information is to be
entered in and the correct method in which to batch and what documents to batch in preparation of the
completion of journal entries.
As you may have noticed by now, and will learn, posting the journal transactions to the general ledger
can be a very onerous process. To assist in the control of this process, the transactions for the month are
batched into groups so that there are fewer transactions.
Batching can also be used to confirm that the journals are correct. If the journal and the batch do not
balance then you need to double check the journal, the invoices and the batch for errors.
Sales invoice batch

Sales invoice batch for (the month)
Date Debtor name Amount Invoice Number

20xx (GST Inc.)
Sales invoice batches headings include:
Date Date of the transaction
Debtor name Name of the debtor who raised the invoice
Amount This amount is the amount of the invoice plus GST
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Invoice Number The invoice number must be in numerical order.
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It is essential that you ensure that the sales invoice is correct when it is generated. As discussed in
Section 1.1, particular attention must be paid to detail.
Some of these details include:

 Date
 Amount
 Price
 Item number
 Description
In the event that the client raised a purchase order, care should be taken to make sure that the order
matches the invoice. If the purchase is only partially fulfilled, care must be taken to ensure that a partial
order is noted on the invoice. This ensures that the debtor is aware that they still need to finalise the
account.
It is also important to note that there will be times when your employer will have developed a business
or professional relationship with a client. This may mean that the client may obtain a discount. If this is
the case, make sure that you check their price listings to confirm that the amounts correlate.
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Learning Task Seven

Answer the following questions. Break into groups (or group class discussion) and discuss your answers.
What is the purpose of a batch within accounting?
In what ways is using a batch system important to productivity?
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Activity 4B
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4.3 – Ensure journals are authorised by appropriate person and process in

accordance with organisational policy and procedures
To obtain authorisation is usually the process of obtaining a signature from your supervisor or manager
before the appropriate journals are posted to the ledger. The purchase is to ensure that the journals are
checked and so that management can monitor journals to ensure that the budget is not exceeded.
Policies and procedures are adopted by organisations to reach their goals and objectives.
Policies and procedures need to be readily available and accessible to all staff in regards to policy and
procedures. Locating OHS policy and procedures will depend on where you
work and the type of business operating.
Workplace policies and procedures are typically found in:
Paper based format

A hard copy is usually found in most organisations main office. If you work in a
factory environment, hard copies will usually be found strategically throughout
the production area. Paper based copies are usually intended for when staff
members are unable to access the internet. However, some organisations do
prefer to ensure that hard copies are available to all staff.
Electronic format
Electronic copies of Workplace policy and procedures can usually be found in an organisations Intranet.
An Intranet is an interconnected network of computers found in an organisation protected from outside
exposure. This information is usually internal to the organisations operations.
Policies and procedures, irrespective of the format are designed to provide consistency throughout the
organisation.
 Policies are the guidelines or laws that drive the procedures.
 Procedures are the detailed steps required to perform an activity within a process.
Authorisations
The main purpose of obtaining authorisation is for accountability rather than accuracy, which must be
addressed in the internal checks prior to authorisation. Authorisations are obtained to ensure that the
transaction is legitimate before the transaction is executed or finalised. In obtaining authorisations, the
member of the team authorising the transaction is accepting responsibility for the transaction.
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Many of the following authorisations should be part of the internal control guidelines. There may also
be an authorisation process to double check transactions before they are authorised. These internal
checks can also ensure that client records and information are protected.
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Authorisation of journals should include, authorisations for:
Orders
To make sure that there is an authorisation for orders for goods and services, within the appropriate
amount within the correct time frame and from an authorised source. An authorised source are usually
organisations or personnel that your employer has developed a business relationship with.
For example, this relationship could be a supplier relationship. The supplier may have the same goals
and objectives as your organisation or a similar mission and vision to deliver the same level of quality of
service. These may be the suppliers that team members are authorised to order stock from.
Timesheets
Payments are in most instances generated electronically. However, hard copies including signed
authorisations are generated by relevant management. The aim is to confirm the number of hours that
the worker worked; within the terms of their contract of employment; and any extra hours authorised
when personnel are paid a wage and not a salary.
For expense claims

Expense claims, even though they are processed electronically should in most instances, depending on
your organisations procedures be authorised by the relevant manager. Managers should check claims
against rates, scales and entitlements placed on an employee’s role or client’s contract. Claims, for
example should be checked and authorised against realistic expenses. Checks should be made to ensure
that parties such as the sales team are not excessive.
For invoices
When orders are received, they are checked against the
delivery docket. Deliveries should be checked for:
 Quality
 Incorrect deliveries
 Price per unit
 Account code
Any errors identified will need to be corrected. These corrections will need to be authorised and the
errors or returns arranged and/or updated with the client. The invoice is usually sent to the appropriate
department and authorised once the delivery docket and a physical check of the goods or services have
been completed.
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Amendments or adjustments
Creditor and Debtor records should be maintained to ensure that all notes for the adjustments are
copied, stored and/or processed as per organisational and legislative requirements. In many instances,
the original hard copy documents will be stored in the clients file. An electronic copy of the information
may also be retained in the organisations data base.
Before filing authorisations, make sure that they are signed and processed.
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Learning Task Eight

What is the level of authorisation that you have in regards to journal entries?
How do you know this information?
What are the different ways in which you can access information about your level of authorisation?
What do you need to do if it is the end of the month and you are unable to obtain the authorisation to
process journals?
Would this decision change if you have to meet your deadline to close journals at the end of the month?
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Activity 4C
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5. Post journals to ledger

5.1. Post journals accurately to ledger in accordance with organisational input standards, with
transactions correctly allocated to system and accounts
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5.1 – Post journals accurately to ledger in accordance with organisational input

standards, with transactions correctly allocated to system and accounts
Asset, expense, liability, owner’s equity and revenue accounts must have separate accounts. These
accounts form the general ledger. Individual transactions must be entered into different general ledger
accounts. When a transaction is entered into one of the journals, then they must be posted to the
general ledger.
Remember, for each individual transaction, there are two or more entries into a ledger. It is also
important to note that for every entry whether a Dr or Cr, there are one or more Dr or Cr transactions of
the same amount. If this does not happen, then the trial balance will not balance.
It is important to make sure that each journal is totalled at the end of the month and posted to the
relevant accounts in the general ledger.
Chart of accounts and general ledger

Some organisations are large, thus they will have a very large amount of accounts in the general ledger.
To maintain control and a record of these accounts, an index will be developed by the organisation
called the chart of accounts. The chart of accounts will assist you in organising your accounts. The
numbering system will vary according to the preferred needs of the organisation.
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Examples of the numbering systems may include:

 Numeric – using numbers (5-1110, 5-1300, 5-2110)
 Alphanumeric – using numbers and letters (A1, A5)
Your Chart of Accounts may look like this.
Chart of accounts
Account
Account name Accounting element
number
1-1200 General cheque account Asset
1-1400 Cash drawer Asset
1-1600 Petty cash Asset
1-2000 Input Tax Credits Asset
1-5400 Credit card – MasterCard Liability
1-5900 Trade creditors control Liability
3-8500 Capital Owner’s Equity
3-9000 Drawings Owner’s Equity
4-1200 Sales Revenue
4-1800 Delivery fee income Revenue
4-1900 Discounts received Revenue
5-1200 Accounting fees Expense
5-1220 Advertising Expense
5-1110 Bank charges Expense
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Take the time to learn how your organisation uses the chart of accounts. Note that the numbers within
the chart will be on top of the matching account name within the general ledger.
The set of accounts discussed above are established to assist personnel in finding ledger accounts in a
systematic manner and in the preparation of financial reports such as the Trial Balance, Profit and Loss
Statement or the Balance Sheet.
Accounting standards must be maintained when processing journal entries and the interim reports so
that management can be provided with accurate information at all times. Some of the basic processes
that you should follow, include:
 Updating journals in a systematic manner by the date of the transaction, so

transactions need to be dated consecutively.
 That only cash transaction are entered into the cash receipts and payments journal and
only credit and transactions for returns are placed in the appropriate sales, sales return
and allowances, purchases and purchases return and allowances journal.
 That any errors that are identified are not crossed out, but are adjusted in the general
journal. This means that you would need to perform a transaction to correct the error
and then post the correct entry.
 Sundry debtor and creditors transactions are posted to the general journal and trade
debtors and creditors are posted to the other journal as the transactions posted to the
sales and purchases journal and the return journals are transactions generated from
trade transactions.
Note: Trade Debtors and Creditors Control transactions only appear in the General Journal when a trade
transaction is missed or when a correction of an error occurs, such as the posting of a transaction to an
incorrect journal.
The general ledger

The general ledger is a complete set of accounts used by an organisation to ensure that an organisation
can prepare financial statements that in turn allow
management to make important decisions about
the management and budgeting of the business. It
is essential that the general ledger is constantly
maintained and kept up to date. This means that
you must ensure that transactions are recorded
accurately and completely within the ledger on a
daily basis.
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The main elements in the general ledger include:
Element Defined Examples
Asset The value owned by an individual or Cash

organisation that adds benefit to the owner.
Computer
Input Tax Credits
Premises
Stock
Expense The costs that are incurred so that the Electricity

organisation can earn revenue
Purchases
Salaries
Telephone
Liabilities The amount that an individual or organisation Creditors

owes to another party
GST Payable
Loans
Mortgages
Owner’s Equity The amount that the owner has invested in Drawings
the organisation
Is the net worth of the organisation
Revenue The money that is earned by the organisation. Commission
Interest revenue
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Sales
Journals that are posted to the general ledger include:

 General Journal
 Cash receipts journal
 Cash payments journal
 Sales journal
 Purchases journal
 Sales return and allowances journal
 Purchases return and allowances journal.
Journals
For each journal heading there needs to be a ledger account in the general ledger. There are six more
journals that you are required to know before you can perform a trial balance from the ledger account.
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These journals are the:

The cash receipts journal is made in two parts which are:
1. The amounts given as a discount and GST adjustment
2. The amounts received and banked.
The cash receipts journal is a record of cash sales.
1. Date 2. Particulars 3. 4. 5. 6. 7. 8. 9. 10. 11.

Fol Rec. GST Disc DR Cash GST Sundries Bank
No Adj Exp $ Sales Payable $ $
$ $ $ $
The possible headings to the cash receipts journal include:
1. Date of the transaction 6. Discount Expense is the amount 10. Sundries which are accounts not
2. The particulars of the transaction assigned for paying the account early assigned a column
3. The folio number assigned to the 7. Debtors 11. Bank is the balance of each line
transaction 8. Cash Sales
4. Receipt number of the transaction 9. GST payable
5. Adjustments in GST
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Note: The features of the Cash Receipts Journal (CRJ) require that:
 The columns need to be posted to the general journal from the cash receipts journal
 The columns are posted as total except the sundries column – these amounts are posted individually
 As there are two parts to the cash receipts journal, they need to be posted separately as needed.
Posting these accounts include the following actions:

Increase Bank Debit Bank account Asset
Separate Sundries Credit Various Accounts Revenue
GST Credit GST Payable Account Liability
Cash Sales Credit Sales Account Revenue
Decrease Debtors Credit Trade Debtors Control Account Asset
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No Adj. Exp $ Sales Payable $ $
$ $ $ $
01.08.20xx Sales & GST payable CRR 718.18 71.82 790.00
06.08.20xx Sales & GST payable CRR 1236.36 123.64 1360.00
10.08.20xx Commission 935 59.09 590.91 650.00
11.08.20xx P. Peters – debtor 936 3.00 30.00 1570.00
Sales & GST payable CRR 886.36 88.64 2545.00
19.08.20xx A. Beta – debtor 937 2.00 20.00 1880.00 1880.00
23.08.20xx Interest Revenue 938 120.00
Sales and GST payable CRR 509.09 50.91 680.00
27.08.20xx L.. Evans –debtor 939 4.00 40.00 160.00 160.00
31.08.20xx Monthly totals 9.00 90.00 3610.00 3349.99 394.10 710.91 8065.00
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The accounts that are credited are:

1. Trade Debtors Control $3,610.00
2. Sales $3,349.99
3. GST Payable $ 349.10
4. Commission $ 590.91
5. Interest Revenue $ 120.00
$8,065.00
This means that the Bank Account will be debited for $8,065.00
Remember:
Since this is double entry book keeping, a credit entry of an equal amount must occur.
Closing the Journals

Journals will usually be closed at the end of the month. Once the journals are closed, the amounts in the
appropriate columns and rows are posted to the general ledger, using the end of month date.
Any opening balances should be placed in the journal first.
Sundry items should be dated in the general ledger on the date in which the transaction took place
(rather than the end of the month).
Cash at Bank (Asset)
Debit Credit Balance

Date Particulars Jnl ref.
$ $ $
31.08.20xx Cash CRJ 8065.00 8065.00
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Trade debtors control (asset)

$ $ $
31.08.20xx Bank CRJ 3610.00 3610.00 CR
31.08.20xx Discount expense and GST CRJ 99.00 3511.00 CR

Adjustment
Sales (revenue)

$ $ $
31.08.20xx Bank CRJ 3349.99 3349.99
GST payable (liability)

$ $ $
31.08.20xx Bank CRJ 394.10 394.10
31.08.20xx Trade Debtors Control CRJ 9.00 385.10
Discount expense (expense)

$ $ $
21.08.20xx Trade Debtors Control CRJ 90.00 90.00 DR
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Interest revenue (revenue)

$ $ $
23.08.20xx Bank CRJ 590.91 590.91 CR
Commission (revenue)

$ $ $
10.08.20xx Bank CRJ 120.00 120.00
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Activity 5A
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6. Enter data into system

6.1. Enter data accurately into system in accordance with organisational input standards and
correctly allocate transactions to system and accounts
6.2. Update related systems to maintain integrity of relationships between financial systems
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6.1 – Enter data accurately into system in accordance with organisational

input standards and correctly allocate transactions to system and accounts
6.2 – Update related systems to maintain integrity of relationships between
financial systems
It is essential that the information that is entered into the system meets the ethical and integrity
standards of your organisation. These ethical and integrity standards will be guided by your
organisations policies and procedures, the standards or codes of your sector of the financial services
industry or guided by relevant legislation, such as Privacy Legislation.
Information integrity within the financial services must be above reproach. This means that auditors
and other bodies can have the assurance that the data being accessed or read has not been
tampered with, altered or damaged through a system error.
Integrity of information
To maintain the assurance that the information or data entered into a system has not been accessed
or tampered with, organisations have put in place strict control measures that controls who accesses
information and the amount of access workers and management have to the organisations
management system.
This accessibility is tied in to your user name and password. When you are newly employed with a
Financial Service Organisation (and most organisations), you are provided with clear and concise
instructions not to share your password and user name. The actions of another worker illegally using
your password and user name can place you in a very bad position legally. Unless you have proof,
you could be dismissed or face litigation due to the actions of another party.
Why?
Since they were using your user name and password, the records will show that you performed a
specific action or set of actions. There is a record and the onus of proof will be yours to prove that
you did not compromise the integrity of your organisation. In most instances, even if you prove that
you did not perform specific actions, the fact that you provided another party with the information,
you may face dismissal, especially if maintaining confidential information such as the user name and
password is essential to your contract of employment.
The integrity of the organisations information is also controlled through the allocation of access
through the use of your user name and password. Notice, if you work in a medium to large
organisation, that there are sections of the
administration system that you cannot access. This
is tied in to your job role and the level of
authorisation that you have. Technical support will
ensure that you are only provided with access to
information specific to your job role and level of
authority.
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In most cases, if you require access to more sections of your organisations’ system, you will need to
apply for this access. Do not just obtain the user name and password of another member of your
team. If you are caught accessing information that you are not authorised to access using another
person’s user name, you will not only place yourself at risk of dismissal but could also contribute to
the dismissal of the member of staff who provided you with their user name and password.
There are always processes in place to ensure that you have access to the appropriate information
to ensure that you can perform your job role efficiently and effectively.
One of these controls is to ensure that you can check that the information that you are entering into
the system correlates with original information.
Integrity of relationships in financial systems

For example: organisations will assign different members of their teams with specific tasks that
complete a procedure. This means:
1. A manager requests that the purchasing officer raise a purchase order for
advertising material for the sales team.
2. The purchaser raises the purchase order. In many instances, the purchasing officer
will need to obtain authorisation for the purchase order, from either the manager
or a specific member of the team to ensure that they are not ordering stock outside
the budget.
3. When the order is generated and received from the supplier, another member of
the team will physically check the order to confirm that the correct stock arrives.
This is usually compared to the delivery docket that is signed (copied in some cases)
and sent for processing.
4. Another member of the team will be assigned the task of batching and entering
information into the computer system. Before batching the delivery docket, the
worker will check the delivery docket against the invoice and the purchase order.
5. In most instances this information can be found in the accounting software, such as
MYOB or Quicken.
6. The information entered into the system is audited by another member of the team
to confirm that the data entered is correct.
Question:
What relationships have been identified here?
What could and would happen if these relationships do not exist?
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When errors are identified, they are followed up and corrected immediately. Without updating the
system, the decisions made by management can be detrimental to the organisation.
Consider the fact that decisions are made based on reports such as the trial balance, profit and loss
statement and balance sheet which will be discussed in more detail in Section Eight of this Learner
Guide. If a decision is made to spend more, when there are not sufficient funds then the integrity of
the financial business could be placed at risk e.g. if the organisation cannot handle its own financial
position, how can the client be expected to trust the organisation to handle their accounts.
As the most legislated industry in Australia, Financial Service Organisations must also ensure that the
integrity of their business is ever questioned. A loss of reputation is a loss of business and thus could
close the business down.
Controls put in place in most business, stems from legislation, regulations and industry codes of
practice.
Integrity is a consistency of actions, values, measures, principals, expectations and morals.
Ethics deals with what is good and what is defined as bad behaviour.
Organisational policy and procedure in relation to all of your actions are defined by their actions.
This means that the organisations will develop procedures to ensure that their personnel maintain
these expected standards as set by policy and procedure.
Ethics and integrity in data entry and data management

Ethical conduct must be maintained in all levels of the organisation.
This is one of the reasons why you are provided with a controlled user
name and password. The integrity of the system is maintained by
ensuring that the information within the organisation’s financial
service data management system relates only to the information
required for workers to perform their tasks.
Your organisation has a legal obligation to store files for auditing and tax purposes for a specific
number of years. This will vary according to the legislation controlling your sector of the financial
services industry.
To maintain the integrity of the information, it must not be tampered with or changed in any
manner. Control of the management systems minimises the chance that delegate information is not
exposed to risk.
Privacy and confidentiality legislation is in place to assist in ensuring that exposure to risk is
minimised. Your organisation may have the following processes in place.
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Data management control processes may include:

 Control of user name and password use
 Electronic data and information is stored internally and backed up by a Back-up

system, usually operated by an external security data management organisation.
This is done to ensure that no information is lost in the event that the work
premises are destroyed or information is tampered with.
 Control measures are in place to control the movement of physical files and folders.
Controls may include signing paperwork when removing files and folders from the
file cabinet
 Physical files are archived and placed in storage in a fully secured storage facility,
especially when an organisation does not have sufficient storage facilities internally
or when they want to protect the client’s information by storing away from the
work site.
 Physical files are destroyed (usually incinerated) to ensure that client information
does not get into the wrong hands; and
 Many organisations use the back of printed paper to view rough copies of reports or
to make notes as part of the environmental services effort. Be clear on what
documents and paperwork can be used to maintain notes or rough copies of
reports. Delicate information left lying around can be used to tamper with the
systems.
This integrity of the handling of information must be reflected in the relationships within the
financial system. Files are merely a part of this integrity.
An error within a financial document, for example, that is not identified can lead to errors in the
financial ledger and financial statements. This means that management are making uninformed
financial decisions that jeopardise the reputation of the business.
It is also important to make sure that you report any errors that have been identified as soon as they
are identified through the correct channels. This is one of the reasons why you do not place a line
through the error.
By completing the appropriate transactions within the general journal, there is a clear
demonstration that the error has been corrected. By placing
a line through the error or whiting out the error, the
question of tampering will arise. Placing a line through an
error and making a correct entry below leaves the journal
entries open for questioning.
Auditors will take closer attention to the integrity of the

organisations’ financial transactions if any hint of tampering
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occurs, even innocently. This is one of the reasons why you must follow the accounting standards
put in place by the organisation.
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Keeping information up to date

All documents must be checked before processing. Once the document is processed it must
immediately be placed in the general journal and the appropriate cash and credit journals. At the
end of the month you will close the journals and generate the appropriate trial balance, balance
statement or profit and loss statement.
So why maintain an up to date record of financial transactions?

Just because it is common practice to generate statements at the end of the month, management
may ask you to generate statements any time during the month. By keeping up to date, you will be
able to ensure that the reports can be generated immediately.
It also minimises the risk of errors. The chance of errors is higher when you maintain a manual
accounting system than a computerised one. If you are placed under pressure to generate the
reports and the transactions are not up to date, there is also a higher chance of error because of that
pressure. By keeping up to date, you are provided with sufficient opportunity to check your
transaction entries and the general ledger so you can generate interim reports with confidence to
their integrity.
Remember this integrity is maintained when an organisation assigns different personnel to perform
different financial transactions. They will check the work to make sure that the information that they
enter is correct and they will be able to identify incorrect entries into the journals and/or ledgers.
Data entry
Data must always be entered efficiently and accurately into the appropriate software programs.
Most financial service organisations will have procedures in place to ensure that all data entered into
the computer system is accurate. Appropriate actions to correct the errors. Make sure that you
follow organisational policy and procedure.
In most instances an audit will be completed by a second person to ensure that any input errors are
identified and corrected as soon as possible. The data entry will follow the same procedures as the
manual system that you have used in this learner guide. Making changes to errors are tracked by the
computer software that you are using.
The integrity of the information within the software will be questioned by auditors if clear updates
are not recorded. These updates will
usually be posted into the correct journal
ready for the general ledger.
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Learning Task Nine

Briefly discuss what is considered unethical behaviour in regards to financial transactions within your
sector of the financial services industry.
What can happen if the integrity of data is not maintained?
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Activity 6A
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7. Prepare deposit facility and lodge flows

7.1. Select deposit facility appropriate to banking method to be used
7.2. Balance batch with deposit facility without error
7.3. Take security and safety precautions appropriate to method of banking, in accordance with
organisational policy and industry and legislative requirements
7.4. Obtain and file proof of lodgement so that it is easily accessible and traceable
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7.1 – Select deposit facility appropriate to banking method to be used

7.2 – Balance batch with deposit facility without error
7.3 – Take security and safety precautions appropriate to method of banking,
in accordance with organisational policy and industry and legislative
requirements
To meet the changing needs of organisations, many Australian Banks provide a number of methods
in which to deposit money into client accounts. The beauty of these deposit facilities is that they are
used to control the physical flow of money within a business environment to minimise the chance of
robbery.
Due to the diversified needs of clients and business, deposits may be made physically or through an
after hour slot in most major branches.
Many internal factors will influence the type of deposit facility an organisation uses. Those factors
will also be influenced by external factors. A deposit facility is the business that holds the funds of
another organisation, such as a bank or credit union.
The internal factors may include:

 Size of the business (the budget that the organisation
has)
 The number of people available to perform the task.
 The needs of the business
 The level of risk
 The number and monetary size of the deposits.
External factors will include:

 The area and environment in which the business is situated
 The level of risk to personnel
 Time of the deposits
Deposit facilities may include:

Direct debit transaction reports
A direct debit transaction report provides businesses with a report of the transactions that have
been generated from clients during the day or a specified period of time. The report records
transactions that are made when a client authorises the bank to allow the business to debit a
specified amount from their account.
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Money can only be withdrawn from an account that the client has specified. This type of transaction
is usually initiated when the client specifies that they would prefer direct debits from their accounts
to pay for their financial product or service.
The financial service organisation (the payee) will then give the original document to their branch of
the bank and their bank will obtain the appropriate authorisations so that the client does not need
to worry about paying ongoing payments. They will automatically be deducted from the clients
account.
Banks will send regular, usually daily reports on the direct debit transactions to ensure that your
organisation can update their cash receipts journal or batches/cash receipts journal. This will vary
depend on the size of the organisation and the amount of direct debits are processed on a daily
basis.
Since these transactions are ongoing, an audit of any variations to payments is identified and these
variations are up dated within the batches, journals and ledger and interim reports.
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Bank deposit slips

If you have a check account, you will find that there are deposit slips such as the example provided below so that you can personally deposit money into an
account (or have a representative do it for you).
Bank Name Bank Name
Date: ______________________ Depositors Name Bank/Branch DEPOSIT
Branch BSB and account Number _______________________ ________________________ Date: ___________________
___________________________ Signature For CREDIT of (account name) Notes: _____________. ____
Name of Depositor ________________________ _________________________ Coins: ______________.____
___________________________ Phone No. Nominate account type Cheques: ____________.___
From Credit _________________________  Cheque  Saving  Credit Subtotal__ __________.___
$__________________________ Card Number (if applicable) ____________________.___
________________
The left hand side of the deposit slip example will usually have a tab, like the cheque book that allows you to complete the details of the deposit being
made. The whole deposit slip needs to be completed, including the back of the deposit slip (see next page) which provides space to enter information about
the cheque.
You are also provided with an opportunity to complete the details of the deposit slip so that you have a record of what was in the deposit.
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DEPOSIT
Date: ___________________ Drawer Branch/Bank Amount
Notes: _____________. ____
Coins: ______________.____
Cheques: ____________.___
Subtotal__ __________.____
___________________.____
Some deposit slips provide space for workers to fill the details of cheques on the deposit slip stub.
Business deposit slips
Business banking deposit slip facilities are different from the personal deposit slips. As an
organisation may have several cash transactions a day, many businesses have a separate deposit
book. At the end of each day the takings are added up and totalled. These amounts will
correspond with business transactions that appear in the cash receipts journal.
Businesses are usually provided with separate cheque and deposit books. A sample of a page of a
business deposit book is shown below. Notice that there are several lines in which to complete
the daily deposits.
Business bank deposit slip
Bank name
ABN number
DEPOSIT
Drawer Bank Branch Amount
Date: _____________________________ Total Cheques
Customer Name: ____________________ Notes
__________________________________ Coins
Account Number: ___________________ Cheques

No of Chqs: ________________________ Credit Cards
Name of Depositor: __________________ Total
These deposits are recorded within the cash receipts journal. The aim of the cash receipts journal
is to record all cash transactions such as cash sales; the amount and the reasons why the amount
was received.
To record the listing of the cash including the notes, coins and cheques received by an
organisation, a cash listing is completed.
To ensure that security of workers when handling cash the following procedures may apply
within your organisation in regards to cash handling.
Before following the cash and deposit handling procedures for your organisation, make sure that
you complete a cash listing.
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Cash listing
Transaction listing report
Transaction Receipt Amount
Total received:
Signature: Signature of authorised personnel
When handling cash:

 Do not leave cash out unattended. Secure money to handle any disruptions
within the store or business
 Make sure that premises are locked when leaving premises unattended
 Do not take cash home. Use the deposit facility available to you
 Keep money out of sight when passing money or counting it
 The safe where cash is stored must be approved by an insurance company
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 Make sure that you are trained in regards to any safety issues; such as:
o the use of mirrors
o identifying suspicious behaviour
o what to do in the case of theft – remember, your safety

always comes first
o roles of personnel, such who is authorised to take money

from the cash register
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When handling deposits, the following procedures may apply including:

 Ensure that random and frequent deposits are generated throughout the day
 Ensure that the bag used differs each time a deposit is made so that potential
thieves or robbers do not recognise that a cash deposit is being made
 Use a bank close by to deliver the cash to
 Repetitively minimise risk when making a deposit by:
o changing vehicles
o changing time schedules
o changing routes
o changing members of the team making

the deposit.
Banking methods
The banking method in regards to direct deposits will vary. These variations will be based on the
size of the organisation and the amount of deposits that are processed on a daily basis. The
amount also takes into consideration the size of cash that is generated each day. Some Financial
Service Organisations may have fewer deposits each day, but the amount of each deposit may be
higher.
The method of banking will also vary according to the needs of the organisation. Your
organisation will have set policies and procedures in place for the payment of bills by customers.
Banking methods include:
Personal
Smaller businesses with lower levels of daily deposits will usually generate deposits personally.
Daily deposits are performed to ensure that the amount being transferred to the bank is of a
smaller value than if the Financial Services Organisation was to generate deposits every several
days.
Daily deposits also make the work place more secure and will minimise the level of risk to
workers due to robberies and theft. The risk of burglarises is high if too many people know that a
larger sum of money is kept on the premises. Regular daily deposits ensures that this level of risk
is lower.
Whenever personal banking is performed, make sure that a receipt of the payment is obtained
for the organisations records. At times, your organisation may authorise that money be dropped
off and the money counted later. Ensure that you follow organisation procedures are followed
up.
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Through a third party security company and pick-ups

Some Financial Service Organisations generate too much cash during their daily intake so as to
ensure the security of their cash and premises, a third party security firm is contracted to make
regular pick-ups during the day.
This ensures that the risk to personnel is also minimised.
One of the deciding factors for financial service organisations to use a third party company to
pick up cash in-take is to ensure that all cash is off the premises at night. To meet the needs of
their client, banks have a nightly drop off box into the bank that allows businesses to drop cash
off at the end of a late business night.
Unfortunately, this can potentially leave the personnel making the drop off at risk. As most
organisations close for business at the same time, most drop offs will occur at basically the same
time. A cash management procedures that most organisations have is to make sure that any cash
handling is performed at irregular times.
This means that if anyone is watching the premises, they will not be able to plan a theft or
burglary at the times when there is more money on the premises. This means that no set pick up
times should be planned. Random pick-ups ensure that workers are placed at minimum risk.
Burglars could watch the premises over a long period of time and if a rotating roster is
established then level of risk rises.
A third party pick up at night can minimise the level of risk that staff may face. All attention must
be maintained to ensure that all parties are not at risk.
Cash management processes

There is a lot of legislation in place to control the movement of money. For example:
 Any suspicious movement of money should be brought to the attention of the

appropriate body as per the Anti-Laundering and Counter Terrorism Financing
Acts
 The handling of money such as purchases is protected by consumer credit

legislation;
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Client records should be kept separate from the processing of documentation and should not be
left openly in an area where unauthorised personnel can read the information. This means that
all files and/or folders must be signed in and out of the filing cabinet.
Control measures are put in place to secure not only the reputation
of the organisation, but also to ensure the safety of the clients’
money and personal information. Failure to meet an organisations
policies and procedures within the Financial Services Industry
(depending on the circumstances) can lead to the termination of
the workers position.
No tights controls on the cash management process can lead to loss

of business.
Cash management procedures:
 Decrease the opportunity for personal gain as a different member of the team
(for medium to large organisations) will be responsible for different processes so
more checks are done to minimise the opportunity of personal gain and the
increase of risk to the firm in relation to cash or credit transactions.
 Increase the correct balance of the accounts, and minimises the chance of
errors. This makes it easier for management to make an informed decision
 Ensures that all personnel know their role in processing accounts so that
integrity of the accounts is maintained.
 Ensures that all legislative requirements and industry codes of practice are
maintained so that confidence of the organisation is maintained.
Internal controls that your organisation may have in place include:

 Ensures that all transactions are fully documented so an undisputable audit trail
exists. This means that all transactions must be authorised through the
delegated member of the team or management.
 Cash related transactions are automatically processed
 Documents are allocated a number so a paper trail is maintained – this will assist
in the reconciliation process and accountability
 Regular review of transactions occur to detect errors and any duplicate

payments or transactions
 Documents are secured from tampering and unauthorised disposal
 All transactions are continuously managed and controlled by designated

members of staff
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 Cash related duties are usually segregated for instance to:
o Accounts receivable
o Accounts payable
o Cashiering
o Accounting
o Collecting funds
This is done as a means of control.
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 Accessibility to funds are restricted
 Only authorised personnel can perform set duties such as authorising

transactions
 Employees performing cash related tasks must be trained and must accept their
responsibilities
 All unnecessary cash handling and/or clerical duties should have been
eliminated to lessen the likelihood of loss and exposure to errors.
 To provide clients with diversity in payment measures, direct deposit and

Electronic funds transfer will be offered. This will also minimise the level of cash
on the premises
 Computer programs will be used to minimise the incidence of error in cash

related transactions.
 Price lists of goods and/or services provided to ensure consistency over income.
 Credit is only offered to authorised accounts as per the organisations debt

management policy
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Learning Task Ten

You have been advised that you missed two errors within the sales invoice batch. As per
organisational procedures, you will need to physically check the Receipts to identify the errors
and make corrections as per your organisations policy and procedures.
Complete the Business Bank deposit slip for the 15th and 23rd August, 20xx as per the banks
request. You are authorised to perform this task. The bank teller who accepted this transaction
had an internal problem with the Bank and as such many businesses were affected by the
acceptance of incorrect entries.
Bank name
ABN number
DEPOSIT
__________________________________ Coins

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Business bank deposit slip
Bank name
ABN number
DEPOSIT
__________________________________ Coins

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Activity 7A
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7.4 – Obtain and file proof of lodgement so that it is easily accessible and
traceable
As an ongoing part of maintaining a paper trail for audit, banks and other financial banking
bodies such as a credit union, will provide (upon request, or automatically, depending on the
relationship with the customer) acceptance that they have received the monies on bank deposit
slips. The acceptance by the banker is called proof of lodgement.
Proof of lodgement is an amount that is lodged or paid to a bank account.
Proof of lodgement may include:
Bank stamped deposit facility

A stamped banking facility demonstrates that the payment has been accepted by the bank. The
bank will stamp accepted on the deposit slip or other authorised form and the acceptance is
usually an unconditional liability of the bank.
The aim of the bank stamped deposit facility is to ensure that the organisation has a tracked
record of the transaction and provides evidence that the income has been generated.
These stamps are usually dated and the bank representative will usually need to provide a
signature on the document to ensure that if there is a problem they will be easy to identify.
Verified transaction listing

A verified transaction listing is a listing provided by the bank in the form of a printed document or
electronic form, depending on the agreement of the bank and the organisation. The listing will
include a record of all transactions for the date.
These documents will provide secondary evidence if the auditor has a problem with any of your
tax or financial records during the audit process.
To ensure that you are swift in responding to the auditor’s needs, care should be taken to ensure
that each document is carefully filed as per your organisations procedures.
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Activity 7B
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8. Extract trial balance and interim reports

8.1. Process accurately any special transactions
8.2. Complete cash and credit journals and post to general ledger
8.3. Extract and check trial balance and prepare other required reports
8.4. Find and correct any errors
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8.1 – Process accurately any special transactions

8.2 – Complete cash and credit journals and post to general ledger
8.3 – Extract and check trial balance and prepare other required reports
8.4 – Find and correct any errors
In section 4.1 you were introduced to the following special transactions.
Special transactions may include:

 Introduction of additional capital
 Drawings of cash and goods
 Purchase and sale of non-current assets at book value
 Interest payable and receivable on overdue accounts
 Dishonour of cheques including write-back of discount
 Bad debts written off or recovered.
In Section 5.1, you were introduced to posting journals to the general ledger.
To assist you in monitoring posting transactions to different journals and understanding the
interaction between all of the ledgers from the journals, refer to the posting guides below.
Posting journal entries to the general ledger
Accounting element Increase Decrease
Assets DR CR
Expenses DR CR
Liabilities CR DR
Owner’s equity CR DR
Revenue CR DR
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Posting the cash receipts journal to the general ledger
Increase Bank Debit Bank account Asset
Separate Sundries Credit Various Accounts Revenue
GST Credit GST Payable Account Liability
Cash Sales Credit Sales Account Revenue
Decrease Debtors Credit Trade Debtors Control Account Asset
Posting the cash payments journal to the general ledger
Decrease Bank Credit Bank Account Asset
Increase Separate Accounts Debit Various Accounts Expense
Wages Debit Wage Account Expense
ITC Debit Input Tax Credits Asset
Cash purchases Debit Purchase Account Expense
Decrease Creditors Debit Trade Creditor Control Account Liability
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Posting the sales journal to the general ledger
Increase Sales Credit Sales account Revenue
GST Payable Credit GST Payable Liability
Total owed by debtors Debit Trade Debtors Control Asset
Posting the sales return and allowances journal to the general ledger
Decrease Sales return Debit Sales return account Revenue
GST Payable Debit GST Payable Account Liability
Total owed by Credit Trade Debtors Control Asset

debtors Account
Posting the purchases journal to the general ledger
Increase Purchases Debit Purchases account Expense
GST Payable Debit Input Tax Credit Asset
Total owing to Credit Trade Creditors Control Liability

creditors
Posting the purchases return and allowances journal to the general ledger
Decrease Purchases Credit Purchases return Expense

return
ITC Credit ITC account Asset
Total Debit Trade creditors control Liability
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The accounting process revisited

The main aim of this unit of competence is to understand the steps within the accounting
process, including how to ensure that the organisations are secure through strict controls.
Source documents to
provide evidence of
transactions
Journals
Summary of transactions
General Ledger
Accounts joined to form a
picture of the organisation
Trial balance
Lists general ledgers accounts and
balances
Used to check the general ledger
Financial Reports
Profit and Loss Statement
Balance Sheet
If there is any step in the above processes that you do not understand, take the time to go back
and review the steps and clarify any issues with your trainer.
The following final sections of this Learner Guide are aimed solely at:
 The Balance Sheet
 The Trial Balance
 The profit and loss statement.
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Before going through the process of completing each of these reports, we shall now provide you
with foundation information about each of the reports, what they tell management and how
they help in the decision making process.
It is important to note that Financial Statements meet the needs of common users. However,
economic decisions should not rely solely on financial statements, because financial statements
portray the impact of past events and do not provide non-financial information.
For example; a balance sheet shows the financial position of an organisation at a specific point in
time, including the assets the organisation has, its liabilities and what the owner’s own. However,
assets and liabilities do not provide information about the cash flow of the organisation and does
not demonstrate that an organisation can meet their financial obligations.
External factors may also impact on the financial flow of the organisation, so it business needs to
consider the impact that investment or loans will have based on the state of the economy. If
people are buying less due to a lack of confidence in the economy, then the organisation may not
be able to meet its short term bills, even if it does sell assets to remain liquid.
Liquidity is the availability of cash to meet the future needs of the organisation.
Reports may include:
Report Equation Information
Balance sheet Assets = Liabilities + Owners’ Equity Shows the current financial position of the organisation in terms of assets and liabilities.
Trial balance Credits = Debits Trial balance is performed in the preparation of financial statements through a closing of
ledgers.
If credits and debits do not equal then you must check the ledgers for errors (See Section 7.4
of this learner guide)
Unadjusted income Revenue less expenses Shows the performance of the business
statement Demonstrate the income and expenses that arise during the period on the income statement
during the ordinary course of business
Can be used to evaluate the ability of the organisation to generate cash and cash amounts
(such as loans) in the future
Can be measured in three ways as per the Australian Conceptual Framework; including:
 Where profit Is measured in the normal course of operations (called the Operating-
profit approach)
 Where operations plus revenue and expenses relate to previous times (called the all-
inclusive approach); and
 The comprehensive income approach where profit for the periods includes all
revenue and expenses
173
To understand the elements within the Financial Statements, refer to the Framework for the
Preparation and Presentation of Financial Statements. This information can be found at the Australian
Accounting Standards Board website.
Financial statements interrelate because they reflect different perspectives of the same transaction and
other events.
AASB 101 defines a complete set of financial statements as including the following components:
 A statement of financial position as at the end of the period
 A statement of profit or loss and other comprehensive income for the period
 A statement of changes to equity for the period
 A statement of cash flows for the period
 Notes, comprising a summary of significant accounting policies and other explanatory

information
 Comparative information
 A statement of financial position as at the beginning of the preceding period.
For the purpose of this Learner Guide, we shall be introduced to:
 A statement of financial position
 A trial balance
 A statement of profit and loss; and
A statement of the financial position

A more well-known name for a statement of the financial position is the Balance Sheet.
The Balance Sheet summarises the position of the organisation at a specific period of time. The snap
shot includes the business operations and provides an itemised account of the accounting equation.
Assets = Liabilities + Owner’s Equity /Proprietorship
The assets and liabilities of a business change daily with each transaction within the journal and ledger,
so the balance sheet is only accurate on the day that it is prepared.
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Premier Financial Services balance sheet

As at 31 Oct, 20xx
Debit Credit
Current Assets $ Current Liabilities $
Current assets are the cash or other resources Current liabilities are the cash or other
that will be used in the next twelve months. resources that will be paid within the next
twelve months.
Non-current Assets $ Non – current liabilities $
Non-current Assets are the assets that will not Non-current debts are debts that will not be
be used or sold in the next twelve months. paid within twelve months.
Owner’s Equity/Proprietorship
The amount that the owner has invested into
the company and therefore the amount that
the company owes the owner.
The debits must equal the credits. If the two amounts are not equal, take the time to check the trial
balance to identify whether any of the ledger or journal account entries are correct.
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Another way in which a balance sheet may be presented includes:
Premier Financial Services balance sheet

As at 31 Oct, 20xx
DR CR
$ $
Assets
Total Assets
Liabilities
Total Liabilities
Owner’s Equity
Capital
Less Drawing
Total Equity
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Prepare a trial balance

The balances within a general ledger are listed within the trial balance.
It is standard practice for most organisations to post all journals to the general ledger so that a trial
balance can be prepared. Trial balances are performed to make sure that postings to the journal are
accurate. This ensures that:
 Double entry is followed up accurately; and
 That the information within the balance sheet and profit and loss statement are correct
and can assist in ensuring that management will make informed decisions.
Preparation
Manual preparation of a trial balance requires that you follow your organisations procedures in regards
to closing the individual balances of all of the accounts in the general ledger for the period.
Trial balance as at 30 June, 20xx
Account name Debit Credit

$ $
Every ledger in the general account must be listed within the trial balance.
Amounts should be entered in their corresponding debit and credit account balance.
Once all of the amounts have been entered, calculate each column. If the columns do not equal then
you will need to check for errors.
Errors in the trial balance

When a trial balance does not balance, then you should assume that the profit and loss statement and
the balance sheet will also be incorrect.
Why?
When the trial balance, then it follows that there are errors in either your general journal or within the
general ledger.
Remember that when a trial balance or a balance sheet do not balance, then this means that the debit
and credit columns are not equal. This means that you must check your postings to the general ledger.
The date on the trial balance must be the date in which the ledger was balanced. Accounting standards
requires that this is the end of each month.
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Common errors in the general ledger may include:

 A transaction not being recorded in a journal or recorded incorrectly
 A journal entry not posted to the ledger or posted twice
 An entry being made in an incorrect ledger account but on the correct side
 Entries being made on the wrong side of two ledger accounts
 Offsetting errors (compensating errors) where two independent errors for the same
amount are made.
If you are frustrated and your trial balance or balance sheet do not balance, then it is important to take
the time to put the work aside as you must be in a position where you have an eye for detail. Once you
have had a ‘time out’,
1. Recheck your calculations
If you have access to a calculator that has print tape, use it to make sure that your
calculations are accurate.
2. Calculate the differences between the totals and look for the totals in the trial balance
3. If you cannot find the problem, then you will need to check each account to make sure
that the balances have been transferred to the trial balance. Essentially, you need to
make sure that you have not put in the same transaction twice.
4. Check all recorded accounts in the trial balance and check that the amounts were not
entered more than once.
5. If you still have problems, check the general ledger entries and make sure that they
were entered correctly and calculated correctly.
6. Finally check to make sure that the postings from the journal to the ledger are correct.
The first time that you perform trial balances using a manual system, you will find that the trial balance
will not balance. Take the time to make sure that your entries
are accurate and that your amounts are correct.
Follow organisational procedures and never forget to obtain the

appropriate authorisations to ensure that legislative
requirements are met.
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Profit and loss statement

When it is all said and done and you want to know how well the business has performed, an income
statement, also known as the profit and loss statement or operating statement should be prepared. The
profit and loss statement shows:
 Revenue or earnings from the sale of goods
 Expenses or costs made or incurred to generate revenue
 Revenue minus expenses are calculated to determine the profit or loss of the business
Alpha Trading
Profit and loss statement for the month ended 31 August, 20xx
$ $
Revenue
Less cost of goods sold
Cost of Goods Sold

Gross Profit
Less Operating Expenses
Total Operating Expenses

Net Income
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Example
Prepare a profit and loss statement for The Triad Trading Group for 31 March, 20xx
The accounts in the general ledger include:
Wages; 15,000.00; Sales $35,536.30; Electricity $892.43; Insurance 957.45; Discount Expense 345.43;
Interest Revenue 54.43; Interest Expense $15.34; Rent Revenue $5,453.44; Car Expense $45.00;
Purchases $958.00; Sales return and allowances $55.96
The Triad Trading

Profit and loss statement for the year ended 31 March, 20xx
$ $
Revenue
Sales 35,536.30
Less Sales return and allowances 55.96
35,480.34
Interest Revenue 54.43
Rent Revenue 5,453.44 40,988.21
Less cost of goods sold

Purchases
958.00 958.00
Cost of Goods Sold 40,030.21

Gross Profit
Less Operating Expenses
Wages
15,000.00
Interest Expense
15.34
Discount Expense
345.43
Electricity
892.43
Insurance
957.45
Car Expense
45. 00 17,255.65
Total Operating Expenses
Net Income 22,774.56
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Activity 8A
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Skills and Knowledge Activity
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Nearly there...
Major Activity – An opportunity to revise the unit

At the end of your Learner Workbook, you will find an activity titled ‘Major Activity’. This is an
opportunity to revise the entire unit and allows your trainer to check your knowledge and
understanding of what you have covered. It should take between and 1-2 hours to complete and your
trainer will let you know whether they wish for you to complete it in your own time or during session.
Once this is completed, you will have finished this unit and be ready to move onto the next, well done!
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Congratulations!
You have now finished the unit ‘Process financial transactions and extract interim reports’.
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References
These suggested references are for further reading and do not necessarily represent the contents of
this Learner Guide.
Australian Accounting Standards Board: http://www.aasb.gov.au (accessed on 28.10.14)
Australian Taxation Office: http://www.ato.gov.au (accessed on 28.10.14)
Department of Industry: http://www.innovation.gov.au (accessed on 28.10.14)

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FNSACC301

Process financial transaction

2.3 – Reconcile banking documentation with organisation’s financial records ............................... 33

6. Enter data into system ......................................................................................................... 137

3. Prepare and process 3.1 Prepare invoices in accordance with organisational

Element Performance Criteria

8. Extract trial balance 8.1 Process accurately any special transactions

Skill Performance Criteria Description

Evidence of the ability to:

 Accurately enter and balance deposits and withdrawals

 Identify a range of accounting conventions, processes and procedures

Assessment must be conducted in a safe environment where evidence gathered demonstrates

 Common office equipment, technology, software and consumables.

Assessors must satisfy NVR/AQTF assessor requirements.

Companion volumes available from the IBSA website: http://www.ibsa.org.au/companion_volumes

 That this is an interactive course and you should ask questions.

 Ground rules for participation:

o Support and encourage other participants

o When someone is contributing everyone else is quiet

o Be patient with others who may not be grasping the ideas

o Focus discussion on the topic

o Speak to the trainer if you have any concerns

 Discover how to post journals to ledger

 Show how to enter data into system

 Demonstrate how to prepare deposit facility and lodge flows

 Identify how to extract trial balance and interim reports

 Gain the skills and knowledge required for this unit.

1. Check and verify supporting documentation

1.1 – Identify, check and record information from documents

The Accounting Equation is:

(a) Controlled by an entity as a result of past events; and

Owner’s Equity = Assets – Liabilities

AASB (Australian Accounting Standards Board)

For information within accounting reports to balance, it is essential that

Amounts of money, figures

Documents may include:

In some software programs, once an account number is assigned to

Applications are used by business to ensure that the client meets

Deposit books require that you record:

 The customer’s name ; and

 The amount of the deposit

Invoices An invoice is the bill. A purchase order is raised and an invoice is

Purchase orders A purchase order is generated by a buyer to authorise a purchase

Receipts A receipt is obtained when a bill has been paid.

Statements A statement is a document, such as a bank statement that sets out

Learning Task One

Documents are inspected for errors.

Possible scenario’s to discuss are:

 Purchase order was incorrect

 Card number is not correct or card has expired

1.2 – Examine supporting documentation to establish accuracy and

Supporting documentation may include information that supports

The suspense account is used to carry:

Bank reconciliations can be used to assist you by:

 Being used as an early warning of a problem.

The accounting process

Source documents can include:

 Invoices (paper based on electronic)

 Employee time sheets.

Learning Task Two

2. Prepare and process banking and petty cash documents

2.3. Reconcile banking documentation with organisation’s financial records