Set Up and Operate Computerised Accounting Systems: Herbs for Harry Assessment

Set up and Operate Computerised Accounting Systems Assessment

This assessment uses a simulated business called Herbs for Harry. To complete the assessment tasks, you will need to access information, documents, and templates associated with Herbs for Harry.

Task 1 – Set up a data file in MYOB Business

Objective: Set up a data file in MYOB Business, including the chart of accounts, to demonstrate your skills in establishing an integrated financial software system.

Student Instructions:

• This assessment uses a simulated business called Herbs by Harry.

• Download documents and use the information provided in this assessment document.

• Herbs by Harry is a small herb retail shop. Harry Mint, the business owner, uses Excel to manage his business accounting.

• Since registering for GST, Harry has noticed he is spending significantly more time managing his accounting.

• After doing some research, he has decided implementing a computerised accounting system is the way forward.

• He has asked you to assist him in implementing MYOB for Herbs by Harry and establishing a chart of accounts.

Steps to complete Task 1:

1. Add your first name, last name, phone number, and Business Name – Herbs by Harry.

2. Set your MYOB password.

3. Select Access your software now.

4. Add the business details:

   • Business Name: Herbs by Harry Pty Ltd

   • ABN: 26 008 672 179

   • Registered for GST: Yes

   • Business Structure: Company

5. Select yes to employees, use Retail from the dropdown menu for your business's industry and select Student or teacher as your role.

6. Once redirected to the MYOB dashboard, set the following user accesses. Capture screenshots:

• User: Student (use the email address you used to access your Swinburne Open Education course)

  • Access: Administrator

  • User Type: Owner

• User: Harry Mint (h.mint@herbsbyharry.com.au)

  • Access: Sales, Purchases, Payroll, Banking, Contact

  • User Type: File User

1. Select Business settings and add the business details.

2. Download FNSACC426_02_Project_Unadjusted Trial Balance June 2022.

3. Review the MYOB default chart of accounts list.

4. Use the information provided in FNSACC426_02_Project_Unadjusted Trial Balance June 2022 to customise the general ledger accounts to meet the needs of Herbs by Harry.

5. Enter the opening balances as at 30/06/2022. Review system output to verify the accuracy of input data and adjust for any detected processing errors.

6. Generate a trial balance report as at 30/06/2022. Use the snipping tool to capture a screenshot and paste it into the space provided.

Trial Balance 30 June 2022

Task 2 – Process end-of-year adjustments

Harry Mint’s accountant has sent him the end-of-year adjustments for the 2022 FY. Record the following adjusting journal entries in MYOB:

Question 1 – Water Expenses

• Water Expenses of $3,000.00 were paid 12 months in advance on 01/01/2022 and recognised in the accounts as an expense.

• Capture screenshot of the adjusting journal entry and paste it below.

Adjusting Journal Entry – Water Rates

Question 2 – Revenue Entry

• On 29/06/2022, Herbs by Harry issued a tax invoice for plants for $3,300.00 (GST inclusive). The invoice was paid on 30/06/2022; however, due to low stock levels, Herbs by Harry could not deliver the stock until 15/07/2022.

• Create an accrual for the income portion of the revenue.

• Capture screenshot of the adjusting journal entry and paste it below.

Adjusting Journal Entry – Revenue

Question 3 – Wages Entry

• On 30/06/2022, the business owed its employees $1,800.00 in wages that were paid on 05/07/2021.

• Capture screenshot of the adjusting journal entry and paste it below.

Adjusting Journal Entry – Wages

Question 4 – Commission Entry

• Herbs for Harry earned $600.00 in commission during the 2022 FY. The commission was paid on 10/07/2022.

• Capture screenshot of the adjusting journal entry and paste it below.

Adjusting Journal Entry – Commission

Question 5 – Inventory and Cost of Sales (COS) Calculation

• On 30/06/2022, Harry conducted a stock take. He valued his closing inventory at $63,500.00.

• Calculate the Cost of Sales (COS) at 30 June 2022.

• Reconcile COS to stock on hand account and make necessary adjustments in the accounts.

• Capture screenshots of:

  • Current Assets (Balance Sheet Report)

  • Cost of Sales (Profit & Loss Report)

• Paste the screenshots in the space provided.

Inventory Reconciliation:

• Opening Stock: $65,000.00

• Net Purchases: $19,659.09

• Closing Stock: $63,500.00

• Cost of Sales: $21,159.09

Task 3 – Generate Reports

After recording the year adjustments for 2022 FY, generate the following:

1. Adjusted Trial Balance report as at 30/06/2022

2. Profit & Loss report for the period 01/07/2021 – 30/06/2022

3. Balance Sheet report as at 30/06/2022

• Capture screenshots of each report and paste them in the space provided.

Adjusted Trial Balance
Profit & Loss Report
Balance Sheet

Assessor Feedback – Errors to Fix

Task 1 – Trial Balance Report:

• Historical Balance must be 0. Review $1,109.09: record as Purchase Returns under Purchase category.

• Sales Returns & Allowance should be under Sales category.

Task 2 – Adjusting Entries:

• Water Rates: create Prepaid Expense Account (Asset Account) and record the amount on Debit side.

• Revenue Entry: create Liability Account (Revenue Received in Advance) and transfer income account for $3,000. Liability credited, sales debited.

• Wages Entry: create Wages Payable Account and transfer wages expense to liability account. Wages payable should be credited.

• Commission Entry: create Commission Receivable and Commission Revenue accounts; asset accounts debited.

• Cost of Sales Calculation: COS = (Opening Stock + Net Purchases) - Closing Stock. Net Purchases = Purchases - Purchase Returns.

• Inventory Adjustment: attach screenshots of journal entries and reconcile inventory in MYOB to stocktake figure.

Summary of Assessment Requirements

The Set Up and Operate Computerised Accounting Systems Assessment uses a simulated business called Herbs for Harry. The assessment evaluates students’ ability to implement a computerized accounting system using MYOB Business, process financial data, make adjustments, and generate accurate reports.

Key components of the assessment include:

1. Task 1 – Set up a data file in MYOB

   • Create a business file for Herbs by Harry Pty Ltd.

   • Configure business details, users, and access levels.

   • Establish a chart of accounts using the provided unadjusted trial balance.

   • Enter opening balances and generate a trial balance report.

2. Task 2 – Process end-of-year adjustments

   • Record adjusting journal entries for:

     • Prepaid water expenses

     • Revenue accruals

     • Outstanding wages

     • Commission income

     • Inventory and Cost of Sales (COS) calculation

   • Reconcile accounts and ensure accuracy in MYOB.

3. Task 3 – Generate financial reports

   • Adjusted Trial Balance

   • Profit & Loss report for the financial year

   • Balance Sheet as at 30/06/2022

4. Error corrections and assessor feedback

   • Correct classification of historical balances, sales and purchase returns.

   • Adjust journal entries for prepaid expenses, accrued revenue, wages payable, and commissions.

   • Reconcile inventory and Cost of Sales accurately.

The assessment focuses on practical skills in data entry, journal adjustments, report generation, and reconciliation, emphasizing accuracy and compliance with accounting principles.

Step-by-Step Mentoring Approach

The Academic Mentor guided the student through the assessment in a structured, stepwise process, ensuring all requirements were understood and completed correctly.

Step 1: Understanding the Assessment and Context

• The mentor reviewed the Herbs for Harry simulation and explained the business scenario.

• Emphasis was placed on why transitioning from Excel to MYOB was necessary for GST registration and business efficiency.

• The student was briefed on the learning outcomes, including data entry accuracy, processing end-of-year adjustments, and financial reporting.

Step 2: Setting up the MYOB Data File (Task 1)

• Business Setup: The mentor instructed the student to input business details, ABN, GST registration, business structure, and industry.

• User Configuration: Defined roles and access for “Student” (Administrator) and “Harry Mint” (File User).

• Chart of Accounts: The mentor guided the student to customize the MYOB default chart of accounts using the provided trial balance.

• Opening Balances: The student entered balances as at 30/06/2022, with the mentor checking for accurate posting.

• Trial Balance Report: Generated and reviewed for errors, including purchase and sales returns.

Step 3: Processing End-of-Year Adjustments (Task 2)

• The mentor explained adjusting journal entries and their purpose in accrual accounting.

• For each adjustment:

  • Water Expenses: Created a Prepaid Expense account (Asset) and debited it correctly.

  • Revenue Accrual: Created a Revenue Received in Advance liability account; adjusted sales and revenue accounts.

  • Wages Payable: Recorded unpaid wages as a liability, transferring from the expense account.

  • Commission: Created Commission Receivable and Revenue accounts, ensuring proper asset and income recognition.

  • Inventory & COS: Calculated Cost of Sales using the formula: COS = (Opening Stock + Net Purchases) - Closing Stock, and reconciled with inventory on hand.

Step 4: Generating Reports (Task 3)

• The mentor demonstrated how to generate Adjusted Trial Balance, Profit & Loss, and Balance Sheet reports in MYOB.

• Screenshots were captured for submission to validate accuracy.

• Reports were cross-checked with accounting principles to ensure consistency.

Step 5: Reviewing and Correcting Errors

• The mentor reviewed assessor feedback:

  • Historical balance errors were corrected under Purchase Returns.

  • Sales returns reclassified to the Sales category.

  • Adjusting entries were verified against accounting rules for prepaid expenses, accruals, wages, and commissions.

• The student learned to reconcile errors promptly and maintain an audit trail in MYOB.

Outcome of Mentoring Process

Following the step-by-step guidance:

• The student successfully set up the MYOB data file, including the chart of accounts and opening balances.

• End-of-year adjustments were accurately recorded with proper journal entries.

• Financial reports were generated correctly and aligned with standard accounting practices.

• Errors highlighted in assessor feedback were corrected, demonstrating attention to detail and compliance.

Learning Objectives Achieved

By completing this assessment under mentor guidance, the student achieved the following:

1. Practical proficiency in setting up and operating a computerized accounting system (MYOB).

2. Understanding of data entry accuracy and chart of accounts customization for a small business.

3. Ability to process adjusting journal entries for accrual accounting, prepaid expenses, wages, revenue, and commission.

4. Skills in generating and interpreting financial reports including trial balance, profit & loss, and balance sheet.

5. Application of accounting principles to reconcile errors and ensure compliance with statutory requirements.

6. Confidence in using technology to enhance efficiency in small business financial management.

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