Osborne Books Tutor Zone

UsingAccountingSoftware

Practice assessment

© Osborne Books Limited, 2016

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Assessment information

The time allowed to complete this assessment is 2 hours plus 15 minutes reading time. Additional timeof up to 1 hour may be allowed for delays caused by computer issues.

This assessment consists of 13 tasks and it is important that you attempt all of them.

You must save all reports and documents specified in the tasks. Use the evidence number given in theassessment and your name as the filename. You should also ensure that your name appears on allreports and documents. Unless the assessment asks for a specific format, you can choose the formatwhich will best enable the marker to review and assess your work.

During the assessment you will only make entries to the nominal ledger accounts you created inTask 3. You will not be required to make any entries to any accounts other than those you havealready created.

Data information

Sounds Electric is an existing business that offers recording studio facilities to musicians andbroadcasters. The owner is Alex Miller who operates as a sole trader.

The business has previously kept manual books but from 1 July 20-X, the accounts are to becomputerised.

Information relating to the business:

Business name: Sounds Electric*

Business address: 8 Beeching Terrace Westbridge WE1 4NR

Business owner: Alex Miller

Accounting period end: 30 June (each year)

VAT rate: Standard rate VAT of 20% charged on all sales

*In a training environment where reports are printed out, add your name after the business name toidentify your printouts.

You are employed as an accounting technician to carry out bookkeeping tasks for July 20-X only, the firstmonth that the business will be using accounting software and the start of a new accounting period.

You can assume that all documentation has been checked for accuracy and authorised by Alex Miller.

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Sales

Alex analyses cash and credit sales in three ways:• studio time • recording and editing• products online

Purchases

Alex analyses goods for resale in two ways:• studio materials • products online

Before you start you should:

• Set the software date as 31 July of the current year.

• Set the financial year to start in 1 July of the current year.

Task 1

Refer to the customer listing below and set up customer records to open sales ledger accounts for eachcustomer, entering opening balances at 1 July 20-X.

Customer name and address Customer account code Customer account details as at 1 July 20-X

Blue-eyed Boys BLU001 Opening balance: £1,762.50Star Agency Payment terms: 30 days113 Salt LaneChiltonCH7 9ST

Casey Productions CAS001 Opening balance: £2,400.00 6 Oakwood Drive Payment terms: 30 daysWestbridgeWE14 9TQ

Wellswood Community School WEL002 Opening balance: £3,050.70 Kingsway Drive Payment terms: 30 daysWestbridgeWE7 3PB

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Task 2

Refer to the supplier listing below and set up supplier records to open purchases ledger accounts foreach supplier, entering opening balances at 1 July 20-X.

Supplier name and address Supplier account code Supplier account details as at 1 July 20-X

David Jarvis Carpentry JAR001 Opening balance: £600.00 10 Prince William Avenue Payment terms: 30 daysEast ParkChiltonCH6 1XZ

Stage Electronics STA002 Opening balance: £780.00 Theatre House Payment terms: 30 daysLidgate WayBristletonBR4 8UF

Wiretech Ltd WIR001 Opening balance: £1,410.00 Unit 40 Payment terms: 30 daysSouthfields Industrial EstateChiltonCH12 4BN

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Task 3 Refer to the list of nominal ledger accounts in the trial balance below:Set up nominal ledger records for each account, entering opening balances as at 1 July 20-X and makingsure you select, amend or create appropriate nominal ledger account codes.

Opening Trial Balance as at 1 July 20-X

Account name Note Debit £ Credit £Studio equipment – cost 25,000.00 Studio equipment – accumulated depreciation 10,000.00Office Equipment – cost 2,500.00 Office Equipment – accumulated depreciation 900.00Bank current account 10,403.76 Petty cash 200.00 Sales ledger control account 1 7,213.20 Purchases ledger control account 1 2,790.00Sales tax control account 2 4,563.87Purchase tax control account 2 1,330.00 Bank loan 9,000.00Capital 19,393.09Drawings 3 NIL Sales – studio time 3 NILSales – recording and editing 3 NILSales – products online 3 NILPurchases – studio materials 3 NIL Purchases – products online 3 NIL General rates 3 NIL Travelling 3 NIL Postage and carriage 3 NIL Repairs and renewals 3 NIL Cleaning 3 NIL Bank charges 3 NIL Totals 46,646.96 46,646.96

1. As you have already entered opening balances for customers and suppliers you may not need toenter these balances.

2. If you are posting VAT as a single brought forward balance, the opening balance on the account is£3,233.87 (credit).

3. These nominal accounts are needed for transactions taking place in July 20-X.

In the rest of the assessment, you will only make entries to the nominal ledger accounts youcreated in this task. You will not be required to make any entries to any accounts other than thoseyou have already created.

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Task 4

Refer to the following summaries of sales invoices and sales credit notes. Enter these transactions into thecomputer.

Summary of sales invoices

Date Customer Invoice Gross £ VAT £ Net £ Studio Recording 20-X number time & editing

15 July Casey Productions 1383 2,356.80 392.80 1,964.00 1,964.00

22 July Wellswood School 1384 5,040.00 840.00 4,200.00 4,200.00

25 July Blue-eyed Boys 1385 1,488.00 248.00 1,240.00 1,240.00

Totals 8,884.80 1,480.80 7,404.00 4,200.00 3,204.00

Summary of sales credit notes

Date Customer Credit Gross £ VAT £ Net £ Studio Recording 20-X note no time & editing

7 July Blue-eyed Boys 9005 144.00 24.00 120.00 120.00

Totals 144.00 24.00 120.00 120.00 0.00

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INVOICE Wiretech LtdUnit 40, Southfields Industrial Estate

ChiltonCH12 4BN

VAT registration number 711 9855 88

Invoice No. 884277

Sounds Electric

8 Beeching Terrace

Westbridge, WE1 4NR

13 July 20-X

Supplying products for online sales £637.85

VAT @ 20% £127.57

Total £765.42

David Jarvis Carpentry INVOICE

10 Prince William Avenue

East Park

Chilton

CH6 1XZ

VAT registration number 123 4879 32

Invoice No. W701

Sounds Electric

8 Beeching Terrace

Westbridge, WE1 4NR

21 July 20-X

Repairs to sound-proofing in studio £420.00

VAT @ 20% £84.00

Total £504.00

Task 5

Refer to the following purchases invoices and purchases credit notes. Enter these transactions into theaccounting software, ensuring you enter all the information below and select the correct nominal code.

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CREDIT NOTE Wiretech LtdUnit 40, Southfields Industrial Estate

ChiltonCH12 4BN

VAT registration number 711 9855 88

Credit Note No. 1562

Sounds Electric

8 Beeching Terrace

Westbridge, WE1 4NR

20 July 20-X

Products for online sales returned £98.50

VAT @ 20% £19.70

Total £118.20

Stage Electronics INVOICE

Theatre House

Lidgate Way

Bristleton

BR4 8UF

VAT registration number 119 5469 03

Invoice No. 13056

Sounds Electric

8 Beeching Terrace

Westbridge, WE1 4NR

24 July 20-X

2 x RP 240 Headphones (studio materials) £118.00

VAT @ 20% £23.60

Total £141.60

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Task 6

Sounds Electric sells products online. Payments by online customers are made through a secure onlinepayment system called Monimate.

Monimate makes payments to Sounds Electric weekly using ‘Faster Payments’.

(a) Refer to the following listing and enter these receipts into the accounting software.

Online sales bank receipts listing for July 20-X

Date Amount received from Monimate* £

4 July 2205.12

11 July 3617.40

18 July 2187.54

25 July 1960.68

*All online sales include VAT at the standard rate

(b) You have received the following email. Enter this transaction.

Email

To: Accounting technicianFrom: Alex MillerDate: 29 July 20-XSubject: Drawings

I have arranged a BACS transfer of £1,000 to my personal bank account. Please record thistransaction.

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Task 7

Refer to the following summary of payments received from customers. Enter these transactions into theaccounting software and allocate them as shown in the details column.

Wellswood Community School - remittance advice

To: Sounds Electric

Date: 25 July

Amount: £3,050.70

Paid by: BACS

Detail: Payment of balance as at 1 July

Blue-eyed Boys - remittance advice

To: Sounds Electric

Date: 26 July

Amount: £1,500.00

Paid by: Cheque enclosed

Detail: Payment on account

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Task 8

Refer to the following summary of payments made to cash and credit suppliers. Enter these transactionsinto the accounting software and allocate them (where applicable) as shown in the details column.

Date Type Supplier £ Details

18 July Cheque 000738 David Jarvis Carpentry 600.00 Pays balance as at 1 July

23 July BACS Wiretech Ltd 1291.80 Pays balance as at 1 July less credit note 1562

29 July Cheque 000739 Westbridge Cleaning* £300.00 Carpet cleaning including VAT

*Westbridge Cleaning is not a credit supplier and does not have an account for Sounds Electric

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Task 9

Refer to the following standing order/direct debit schedule.

(a) Set up a recurring entry for rates

(b) Save a screenshot of the screen setting up the recurring entry prior to processing. Save it asEvidence 5.

(c) Process the first payment

Standing order / direct debit schedule

Details Amount £ Frequency Total number Payment start Payment finish of payments date 20-X date 20-X

General rates (VAT not applicable) 345.00 Monthly 6 15 July 15 December

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Task 10

Refer to the petty cash vouchers below which have all been authorised by Alex Miller. Enter thesetransactions into the accounting software.

Petty Cash Voucher

Date 15 July 20-X No 68

£

Cleaning materials 14.10

VAT 2.82

Total 16.92

Receipt attached

Petty Cash Voucher

Date 20 July 20-X No 69

£ Stamps (VAT not applicable) 39.60

Receipt attached

Petty Cash Voucher

Date 26 July 20-X No 70

£ Travel to exhibition 65.55

(VAT not applicable)

Receipt attached

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Task 11Enter the following journal into the computer.

J001 31 July 20-X Dr £ Cr £

Sales – studio time 560.00Sales – recording and editing 560.00

Being correction of posting error

STATEMENT OF ACCOUNT Westlays Bank PLC1 Main Street

ChiltonCH2 4NR

Account Sounds Electric 8 Beeching Terrace Westbridge, WE1 4NRDate 31 July 20-X

Date Details Paid out £ Paid in £ Balance £

01-Jul Opening balance 10,403.76

4-Jul Monimate 2,205.12 12,608.88

11-Jul Monimate 3,617.40 16,226.28

12-Jul Bank charges 32.81 16,193.47

15-Jul Rates 345.00 15,848.47

18-Jul Monimate 2,187.54 18,036.01

21-Jul 000738 600.00 17,436.01

23-Jul BACS Wiretech 1,291.80 16,144.21

25-Jul Monimate 1,960.68 18,104.89

25-Jul BACS Wellswood 3,050.70 21,155.59

26-Jul Sundry credit 1,500.00 22,655.59

29-Jul A Miller 1,000.00 21,655.59

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Task 12Refer to the following bank statement. Using the accounting software and the transactions you havealready posted:(a) Enter any additional items on the bank statement that have yet to be recorded into the accounting

software (ignore VAT on these transactions).(b) Reconcile the bank statement and save a screenshot of the bank reconciliation screen showing

reconciled items. Save this as Evidence 6. If the bank statement does not reconcile, check yourwork and make the necessary corrections.

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Task 13

Document and reports Save/print as: A document showing all transactions with eachcustomer during July 20-X

A document showing the balance owed by eachcustomer as at 31 July 20-X

The following information must be evidencedwithin these documents: • Customer name• Account code• Payment terms

Evidence 1a – Name

Evidence 1b – Name

Depending on your software, you may need tosave/print one or more documents

A document showing all transactions with eachsupplier during July 20-X

A document showing the balance owed to eachsupplier as at 31 July 20-X

The following information must be evidencedwithin these documents: • Supplier name• Account code• Payment terms

Evidence 2a – Name

Evidence 2b – Name

Depending on your software, you may need tosave/print one or more documents

Audit trail, showing full details of all transactions,including details of receipts/payments allocated toitems in customer/supplier accounts and details ofitems in the bank account that have beenreconciled

Evidence 3 – Name

Trial balance as at 31 July 20-X Evidence 4 – Name

A screenshot of the recurring entry screenincluding all relevant input details

Evidence 5 – Name

A screenshot of the bank reconciliation screenshowing reconciled items

Evidence 6 – Name