Assessment 1 Part A and B Finance

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Assessment 1 Part A and B Finance

Assessment 1 Part A:

1. What are the record keeping requirements for a business in Australia?

Documents and data must constantly be recorded to ensure that all information can be used to identify the company’s performance and growth. However the data and information that is recorded may be extremely important and therefore many other competitors or other people may desire the information. Making it difficult for them to obtain the information is the most important thing to do. Using a records management system that has high security is important. The efficiency of the records management system must also be efficient and therefore access must be easy but secure.

2. What is an audit and how often can a business be audited by the tax office?

An audit is the examination of the financial report of an organisation – as presented in the annual report – by someone independent of that organisation. The audit can determine how the company is performing and can be used to monitor the improvement or decline of a business. The more regular audits are conducted the better, however generally Audits must be done at least once every year by the tax office.

3. What records must a business keep for auditing purposes?

The auditor will need;

  • Ledgers
  • Journals
  • Registers
  • Bank Records
  • Budgets
  • Financial Documents
  • Financial statements
  • Contracts
  • Tax reports
  • Payroll records
  • disbursement records
  • The auditor will also ask for your file of Certificates of Insurance on subcontractors for the audit period.

    4. What are the penalties for a business not keeping the required records?

    Firstly not keeping the required records can lead to problems with suppliers, payroll, utilities, and much more. This impacted the company’s reputation and this can be a very serious punishment.

    The general punishments are:

  • Paying Extra Taxes – This is just one main consequence of failing to keep accurate records.
  • ......

    Assessment 1 Part A and B Finance
    Last updated: Sep 2023

    Page 1

    Paying Extra Taxes – This is just one main consequence of failing to keep accurate records.

  • Auditing Failure – this will lead to other consequences such as large fines and even closure of the business.
  • Criminal Penalties – this is only if the records are purposely destroyed to avoid taxes, etc.
  • Risky Law Suits – Lack of evidence if there is a law suit and you don’t have any evidence to provide to the court.
  • Assessment 1 Part B:

    A

    Causes for Increased Revenue

  • Increased number of customers.
  • Increasing average transaction size. Each customer purchased more
  • More marketing increased the number of sales
  • Prices increased for better profitability
  • There are 3 ways to increase revenue:

  • increase the number of new clients and customers
  • increase the value of each sale made to clients and customers
  • increase the number of times that clients and customers buy from you
  • Recommendations

    I think that the company should continue to make effective decisions that can save a lot of money for the company. A few cents different in price of each product can really cause the profits to increase significantly. The company must make sure that the supply and demand of the company is being considered carefully.

    Marketing is an effective way of increase sales but it requires investment. The money will be used to attract new customers that will build the revenue stronger.

    B

    The current decision is much more efficient. The company can save money while selling more cans. This is a good contract and benefits both companies. From past performance, it is proven that the company can reach the number of sales needed to get the cheaper price and this means that the company should not change back to the old contract.

    C

    The budget must be adjusted so that the company can save the most money while making the most number of sales possible this means that the company must reduce COGS or Increase revenue. Expenses are also very important to reduce in order to increase profit. The adjustments that were made were important and tried to decrease the expenses and increase profit.

    ...

    Assessment 1 Part A and B Finance
    Last updated: Sep 2023

    Page 2

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