To develop the ability in students to create accounting records using manual and computerised systems and prepare financial statements from records of prime entry.
To be introduced to the use of Sage 50 so as to allow students to produce a variety of computerised outputs including reports, letters and other accounting documents.
To be able to compare and contrast the use of manual and computerised accounting systems
The objective of this assignment is to assess students` understanding of manual and computerized accounting systems, as well as their ability to set up and utilize a computerized accounting system using Excel. Based on the provided scenario of working with a client called Fer and Co., students will conduct a comparative analysis of manual and computerized accounting systems, focusing on the implementation of Excel as the new accounting tool. Additionally, students will review attached screenshots depicting the transfer of information from manual records to Excel.
You have recently joined a small accounting firm as a junior accountant, and one of your primary responsibilities involves working with a client named Fer and Co. Fer and Co. has been relying on manual accounting systems for record-keeping and financial management. Recognising the need for efficiency, accuracy, and scalability, your firm has decided to explore the possibility of transitioning to a computerized accounting system using Excel. As part of your role, you have been actively involved in the process of transferring information from Fer and Co.`s manual records to Excel. Additionally, you have received information from Fer and Co. showcasing their business performance to date, which you are required to review and analyze as part of this assignment and transfer to Excel.
Your report needs to include the following:
- Introduction (approx. 200 words)
- Provide a brief background of the accounting firm and its current manual accounting practices.
- Explain the rationale behind the decision to introduce a computerized accounting system using Excel.
- Clearly state the purpose and structure of the report.
- Manual Accounting Systems (approx. 400 words)
- Define manual accounting systems and describe their components and processes.
- Discuss the advantages and disadvantages of manual accounting systems in terms of accuracy, efficiency, reliability, and security.
- Provide real-world examples or case studies illustrating the use of manual accounting systems.
- Analyse the limitations and potential risks associated with manual accounting systems.
- Computerized Accounting Systems (approx. 600 words)
- Define computerized accounting systems and explain their key features and functionalities.
- Discuss the benefits of computerized accounting systems in terms of accuracy, efficiency, reliability, and security.
- Introduce Excel as a computerized accounting tool and highlight its main features and capabilities.
- Demonstrate the process of setting up a computerized accounting system using Excel, including creating worksheets, entering data, and using formulas and functions for calculations.
- Illustrate the functionalities of Excel for generating financial reports, analysing data, and automating repetitive tasks.
- Comparative Analysis (approx. 600 words)
- Compare and contrast manual and computerized accounting systems based on numerous factors, including accuracy, efficiency, reliability, security, and cost.
- Analyse the impact of implementing a computerized accounting system using Excel on businesses, considering factors such as time savings, data accuracy, and decision-making capabilities.
- Evaluate the potential challenges and risks associated with transitioning from a manual to a computerized accounting system.
- Provide examples or case studies of businesses that have successfully implemented Excel as a computerized accounting tool, highlighting the benefits achieved eg Fer and co and any other examples from the industy
- Conclusion (approx. 200 words)
- Summarize the main points discussed in the report, emphasizing the key differences and benefits of computerized accounting systems, specifically using Excel.
- Reflect on the potential advantages of introducing Excel as the new accounting tool for the firm.
- Discuss the future trends and advancements in computerized accounting systems, considering the increasing role of technology and automation.
Information on Fer and co.
Ferro Chan started Fer and Co., a coffee shop, two years ago. The business comprises a coffee shop catering to the public and supplying various cafes. Ferro also conducts online sales of coffee-related products. The payment methods used by customers include cash, credit cards, and debit cards. However, sales to other businesses are done on credit, and Ferro invoices them on a weekly basis. As a part of your tasks, you have been assigned to utilize the provided information to prepare documents showcasing the performance of the coffee shop over the past six months.
- ·Rent: £1,000 per month
- ·Electricity: £212.56 in March, and £322.43 in June.
- ·Wages: £1,425 per month.
- ·Advertising costs: £132in April, and £220in June.
- ·Other operating costs were £345 a month for January and February, but this amount was increased by 5.5% for March and April, and the April figure was then increased by 3% for the May figure, and the May figure was increased by 3% for the June figure.
Cost of Sales
(a)Open a new workbook.Name the file as ‘your surname’and SAVE the file
(b)Open a new worksheet.Input monthly figures for sales, cost of sales and the individual expenses for rent, electricity, wages,advertising,and sundries(for other operating costs).
Use formulae to calculatethe following
- ·totals for each individual type of expense as well as the total cost of sales for the period
- ·the gross profit for each month(gross profit is sales less cost of sales)
- ·monthly total expenses ·the net profit for each month (net profit is gross profit less total expenses)
- ·total sales income for the six month period
- ·total gross profit for the six month period
- ·total net profit for the six month period.
(c)Format the following:
(i)the worksheet, showing currency (£) correct to two decimal places and using a comma as thousand separator.
(ii)the column headings, using bold font, underlined and centred in the cell.
(d)Use formulae to:
- ·calculate the gross profit margin for each month as a percentage rounded to two decimal places(gross profit margin is calculated by expressing gross profit as a percentage of sales)
- ·calculate the net profit margin for each month as a percentage rounded to two decimal places(net profit margin is calculated by expressing net profit as a percentage of sales)
- ·calculate the average gross profit margin and average net profit margin, using the total sales figures and total gross profit/net profit figures, for the six month period. Columns should be appropriately labelled. The average gross and net profit margin figures should be in bold.
(e)Insert the title ‘FER AND CO HALF YEARLY FIGURES FOR 2013’ in italics and bold, centred over the data in a merged cell. Name the worksheet tab ‘FAC1’. Copy the contents of FAC1 into a new worksheet and ensure they are displayed as formulae, formatting cells to fit column width. Name this new worksheet tab ‘FAC1(F)’.
(f)Print out copies of FAC1 and FAC1
(F).These printouts should be on separate sheets of A4 and must fit the page