The following is an extract of the Policies and Procedures manual of Berry Treats:

Accounting System

The business keeps its accounts on an accrual basis. Source documents must be checked for validity.

Errors and Discrepancies

The books of the business must be accurate and correct. The head of the accounting department, should review any discrepancies. Appropriate notes must be kept in the data file against each transaction that will assist with the understanding of the entry should it need to be reviewed. Where necessary, entries should not be deleted or reversed (e.g. dishonoured cheque). The entry in your data file should be adjusted as needed with explanations of changes made recorded in the transaction. If an incorrect tax code has been used in a previous BAS, a journal entry is recorded in the current period to correct the error.

GST and BAS reporting

The business has an Australian business number (ABN) and is registered for GST, reporting monthly on an accrual basis and with Payroll also reported monthly. PAYG Instalments are due quarterly and the business claims Fuel Tax Credits.

Business activity statements are lodged and paid monthly by the 21st of the month following the end of the reporting month.

Tax codes used include: CAP, CAF, GST, FRE, ITS, ITP, N-T, VWH, ABN

Back up

Back-ups are to be done at the end of each day’s work and stored separately to the program. BAS back up files are required.

 

 

Based on the data in the Berry Treats exercise in Part A above, complete the following tasks

 

PR13B-1

Explain what is revealed by the Tax Code Exceptions report and what action was taken to deal with the exception when processing September transactions for Berry Treats.