Ocean Aquariums, owned by Betty Thapa, has grown considerably in the last few years. Consequently, she has decided to change to a cloud based online Accounting Information System from her manual system. She is new to using a computerised Accounting Information System and decided to set her company up from scratch. She discovered that one of the first things she needed to do was to create a Chart of Accounts. Betty decided that it would be easiest to add the accounts in alphabetical order. She started the numbering system at 100 for the first account Accounts Payable the next account is 101 for Accounts Receivable. When Betty got to the end, she realised that she had left 2 accounts out; Office Equipment which she added as 134 and the Business Bank Account which will be 135.

The following is her Chart of Accounts:

Chart of Accounts - Ocean Aquariums
Code	Name	Type
100	Accounts Payable	Current Liability
101	Accounts Receivable	Current Asset
102	Accumulated Depreciation on Computer Equipment	Fixed Asset
103	Accumulated Depreciation on Office Equipment	Fixed Asset
104	Bank Fees	Expense
105	Business Savings Account	Current Asset
106	Computer Equipment	Fixed Asset
107	Cost of Goods Sold	Direct Costs
108	Depreciation	Expense
109	General Expenses	Expense
110	GST Payable	Current Liability
111	Income Tax Expense	Expense
112	Income Tax Payable	Current Liability
113	Insurance	Expense
114	Interest Expense	Expense
115	Interest Income	Other Income
116	Inventory	Current Asset
117	Light, Power, Heating	Expense
118	Motor Vehicle Expenses	Expense
119	Office Equipment	Fixed Asset
120	Other Revenue	Other Income
121	Owner A Drawings	Current Liability
122	Owner A Share Capital	Equity
123	PAYG Withholdings Payable	Current Liability
124	Prepayments	Current Asset
125	Printing & Stationery	Expense
126	Purchases	Direct Costs
127	Rent	Expense
128	Retained Earnings	Equity
129	Revenue Received in Advance	Current Liability
130	Sales	Income
131	Telephone & Internet	Expense
132	Wages and Salaries	Expense
133	Wages Payable - Payroll	Current Liability
134	Office Equipment	Fixed Asset
135	Business Bank Account	Current Asset

1. How will a computerised accounting package help Betty make better decisions about her business? (5 Marks)

2. There are desirable and undesirable aspects of using cloud computing. Explain this to Betty. (3 Marks)
3. Betty is unsure about the purpose of subsidiary ledgers. Explain this concept to her giving her two examples. (4 Marks)
4. As the accountant you are not happy with the way she has set up the chart accounts. Write a letter to Betty explaining the following:
   1. The problems that you feel she will have if she continues with her numbering system. (4 Marks)
   2. How you suggest that she organises the Chart of Accounts, include suggestions for a new numbering system give a small example. (4 Marks)