FNSACC421
Prepare financial reports


Application

This unit describes the skills and knowledge required to record general journal adjustment entries and to prepare end of period financial reports.

The unit applies to individuals who are responsible for preparing financial reports. They may be individuals providing administrative support in an organisation, or they might have responsibility for these tasks in relation to their own workgroup or role.

Work functions in the occupational areas where this unit may be used are subject to regulatory requirements. Users are advised to check with the relevant regulatory authorities to confirm those requirements.


Elements and Performance Criteria

ELEMENT

PERFORMANCE CRITERIA

Elements describe the essential outcomes.

Performance criteria describe the performance needed to demonstrate achievement of the element.

1. Prepare and maintain asset register

1.1 Prepare a register of property, plant and equipment from fixed asset transactions according to legislative and organisational policies and procedures

1.2 Determine method of calculating depreciation according to organisational requirements

1.3 Establish process for maintaining asset register and associated depreciation schedule according to accounting requirements and organisational policies and procedures

2. Record general journal entries for balance day adjustments

2.1 Record depreciation of non-current assets and disposal of fixed assets according to accounting requirements and organisational policies and procedures

2.2 Adjust expense accounts and revenue accounts for prepayments and accruals

2.3 Record bad and doubtful debts according to accounting requirements and organisational policy and procedures

2.4 Adjust ledger accounts for inventories and transfer to final accounts, if required

3. Update and prepare final general ledger accounts

3.1 Make general journal entries for balance day adjustments in general ledger system according to accounting requirements and organisational policies and procedures

3.2 Post revenue and expense account balances to final general ledger accounts system

3.3 Prepare final general ledger accounts that reflect gross and net profits for reporting period

4. Prepare end of period financial reports

4.1 Prepare revenue statement that reflects operating profit for reporting period according to organisational requirements

4.2 Prepare balance sheet and reflect financial position of business at end of reporting period

4.3 Identify and correct errors or refer for resolution according to organisational policy and procedures

Evidence of Performance

The candidate must demonstrate the ability to complete the tasks outlined in the elements, performance criteria and foundation skills of this unit, including evidence of the ability to:

produce at least one complete asset register and depreciation schedule.

In the course of the above, the candidate must:

record entries for balance day adjustments

trace and reconcile errors systematically

apply double-entry bookkeeping principles to prepare and maintain financial reports and ledgers

complete all tasks according to organisational policies and industry standards.


Evidence of Knowledge

The candidate must be able to demonstrate knowledge to complete the tasks outlined in the elements, performance criteria and foundation skills of this unit, including knowledge of:

double-entry bookkeeping principles

processes for making general journal and general ledger entries

key provisions of legislation, regulations, standards and codes of practice relevant to the preparation of financial reports

key features of organisational accounting systems used for preparing financial reports

organisational policies, procedures and accounting standards relevant to own role.


Assessment Conditions

Skills in this unit must be demonstrated in a workplace or simulated environment where the conditions are typical of those in a working environment in this industry.

This includes access to:

office equipment and resources, including computer equipment and relevant software

accounting standards relating to financial reports

samples of financial data

workplace reference materials, such procedural manuals and organisational policies.

Assessors of this unit must satisfy the requirements for assessors in applicable vocational education and training legislation, frameworks and/or standards.


Foundation Skills

This section describes those language, literacy, numeracy and employment skills that are essential to performance but not explicit in the performance criteria.

SKILL

DESCRIPTION

Numeracy

Uses a wide range of mathematical calculations to interpret and arrange/compare numerical information

Reading

Identifies and interprets information from organisational policies, procedures and job requirements

Writing

Records accurate data using relevant format, structure and vocabulary

Planning and organising

Plans and completes tasks according to set guidelines and timelines

Technology

Uses the main features and functions of digital technologies to access, record, store, organise and compile data as required


Sectors

Accounting