Certificate in Financial Reporting for Academies
Learning Log
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Certificate in Financial Reporting for Academies
Learning Log
1. The purpose of the Learning Log is to assist your learning as you work through the online study module. You should use it to:
a) Record your responses to the Learning Activities you complete. The solutions to the exercises can be found at the end of each Unit.
b) Record your responses to the Self-assessment Activities you complete. These will largely take the form of reflections on your learning designed to help you check your understanding of key concepts.
c) Record your responses to the Portfolio Assessment tasks.
2. The solutions to the activities are kept in a separate document.
3. The Learning Log is organised in the sequence in which the activities occur in each Unit.
4. We suggest that you simply type your responses below the relevant activity or, in the case of numerical calculations, in the spaces provided.
5. The second part of this Learning Log provides feedback on the various activities. This feedback is identical to the information provided at the end of each the online study Units.
6. The final section of the Log should be completed at the end of the course. Its purpose is to help you to reflect on your overall learning from the course and how it will help you in your current job and future career, what further areas of learning need you may have, what you found especially difficult & why & how you overcame these challenges.
7. The Learning Log is not required to be submitted for Assessment.
Unit One Activities
Learning activity 1.1
Briefly outline the main differences between an academy and a maintained school, include references to the financial reporting requirements.
Learning Activity 1.2
Review the audit report provided by 'DoLittle Mawper' within the illustrative accounts in Chapter 5 of the 2006 Academies handbook.
1. Is this a qualified or an unqualified report?
2. In reviewing the explanation of the work that the auditors have done, can we assume from this that it is their opinion that the accounts are 100% accurate?
3. What are the auditors' responsibilities in relation to the prevention and detection of fraud?
Learning activity 1.3
Review the illustrative accounts in in chapter 3 and annexes A and B in chapter 2 of the Accounts Direction and highlight the key differences between each of the three performance statements below:
· The statement of financial activities
· The summary income and expenditure account
· The statement of total recognised gains and losses
Learning activity 1.4
In reviewing the principal accounting policies provided in the illustrative accounts in chapter 3 of the Accounts Direction you may have noticed that detailed notes were given to some of the calculations.
Provide a brief explanation for notes 3 and 6 on pages 56 and 57 respectively of the Accounts Direction.
Learning activity 1.5
Find the ‘cash at bank and in hand’ line in the balance sheet. How did the cash position at 31 August 2011 compare with that at 31 August 2010? How might we be able to determine the reasons for this movement?
Learning activity 1.6
Now review the cash flow statement and complete the following and record your responses in your learning log:
a. What are the main headings of the cash flow statement?
b. You have already established in learning activity 1.5 that the cash position changed in 2011. A significant sum was spent on the purchase of tangible fixed assets. . Review the ‘capital expenditure’ line of the cash flow statement and note 13 of the accounts and provide an explanation on how that money was spent
Self assessment 1.1
Review again the structure of the sample balance sheet given in the illustrative accounts in chapter 3 of the Accounts Direction and check that you understand how the various sub-totals (such as net current assets) are calculated. Notice how the net assets, including pension liability figure each year, reconciles to the total at the bottom of the page.
Self assessment 1.2
Now review the subsequent notes to the accounts. Refer back to the SOFA for the year ended 31 August. Note how that statement and other statements include a 'note' column. This note column provides a signpost to the subsequent explanation provided in the notes to the accounts. Carry out these activities:
1. Find the voluntary income' line within the Income section of the statement of financial activities. Which note is referenced?
2. Find that note in the subsequent notes to the accounts. Review the note to see how it provides a breakdown of the total that had been reported.
Self assessment 1.3
Now review the other financial statements – see how they are also supported by further explanations in subsequent notes.
Self assessment 1.4
Review the sample cash flow statement provided in the illustrative accounts in the Accounts Direction.
Look at the title and notice how it refers to cash flow ‘for the year’. Contrast this with the balance sheet which is at the year-end, (a point in time rather than over a period of time).
Note how the statement explains the decrease in funds that has occurred during the year-ended 31 August 2011.
Portfolio assessment 1.1
Provide an example of a statement form a known organisation showing incoming resources from all sources and resources expended on all activities for a specific period.
Portfolio assessment 1.2
Refer to the illustrative Governors' Report in chapter 2, section 4of the Accounts Direction Review its scope and contents then consider the following questions:
The governors of your academy will need to prepare an equivalent report:
a. Who will draft that report?
b. What information, if any, will they require from you?
Unit Two Activities
Learning activity 2.1
The academy receives a gift of £10,000 from a local business. There were no restrictions attached to the gift and the governors decide to use £5,000 of the money to purchase some new sports equipment.
State the effects of each of these transactions and record them in the relevant blank T accounts below.
Note that cash received or paid is normally deemed to pass through the bank account.
Donation of money:
Cash account (asset)Donations account (funding)
Purchase of sports equipment:
Cash account (asset)Sports equipment account (asset)
Learning activity 2.2
Show how you would record the transactions below:
a. The office manager purchased some stationery on credit from Stately Supplies Plc for £400. Each individual item has a very low value so it was decided to charge this immediately as an expense. The supplier has standard credit terms of 30 days so the academy does not need to pay immediately.
b. The academy purchased a new minibus for £12,000 from a local car dealership, Dodgy Dealz Ltd. The supplier will invoice the academy and expects to be paid within 15 days.
c. The academy allowed the Darlingbridge Swim Club to use its pool for a gala, and has invoiced the club for the £250 hire fee, which it expects to receive within a few weeks.
a) Stationery
Creditors account (liability)Stationery account (expense)
b) Minibus
Vehicles account (asset)Cash account (asset)
c) Pool receipts
Hire of facilities account (income)Cash account (asset)
Learning activity 2.3
Balance off the three ledger accounts shown below.
BankDate / Reference / Amount / Date / Reference / Amount
£ / £
01-Jan / Balance B/d / 20,000 / 01-Jan / Repairs / 10,000
13-Jan / Donations / 2,500 / 02-Jan / Suppliers / 6,000
17-Jan / Donations / 2,000 / 12-Jan / Salaries / 2,500
31-Jan / Salaries / 2,500
Palin Contractors
Date / Reference / Amount / Date / Reference / Amount
£ / £
05-Jan / Returns out / 1,000 / 04-Jan / Cleaning supplies / 7,000
15-Jan / Bank / 6,000 / 31-Jan / Cleaning supplies / 8,000
Repairs and maintenance
Date / Reference / Amount / Date / Reference / Amount
£ / £
19-Jan / Bank / 10,000 / 04-Jan / Repairs to roof / 12,500
31-Jan / Sundry repairs / 5,000
Learning activity 2.4
Using the following information extracted from the books of ABC Academy and the format provided, prepare a trial balance at 31 August 2011.
For each item show whether it is a debit or a credit. The first one is already completed.
Note that if your debits and credits do not add up to the same total at the end, you have gone wrong somewhere!
Debit / CreditFreehold land and building at cost / £260,000 / £260,000
Sports equipment / £50,000
Computers / £76,000
Furniture / £37,500
Debtors / £15,600
Cash in hand / £225
Bank overdraft / £2,386
Creditors / £78,900
Donations / £39,300
General annual grants / £430,000
Salaries / £165,000
Rent and rates / £35,400
Cleaning / £6,600
Insurance / £2,850
Books / £4,200
Sundry expenses / £45,960
Investments / £26,100
Other grants / £42,600
Unrestricted funds 1 September 2011 1 / £26,100
Restricted funds on 1 September 2011 1 / £106,149
Total
1 Funds were briefly mentioned in unit 1, and will be explored further in units 3 and 4. They are to be treated as credit balances here.
Learning activity 2.5
Which of the following would be classified as capital expenditure and which would be revenue expenditure?
Capital / RevenueRent
Purchase of a table
Purchase of mugs
Salaries
Electricity
Building a new classroom
Learning activity 2.6
Using the information below, prepare a statement reconciling the balance per bank statement to the balance per cash book of Nolan Academy.
Nominal ledger
Bank account
Detail / Ref / Receipts / Detail / Ref / PaymentsOpening balance / 24,836
Donations / 000213 / 4,200
Cheque- school supplies / 000160 / 10,300
Lodgement / 000214 / 3,194
Cheque / 000161 / 1,600
LA remittance / 000212 / 14,125 / Cheque cashed / 000162 / 3,290
Closing balance / 31,165
46,355 / 46,355
Learning activity 2.7
On 31 August, Nolan Academy’s bank account showed an overdrawn balance of £12,000. On comparing this account with the bank statement (not given), the following discoveries were made:
(i) Cheques received and banked amounting to £16,000 had been recorded in the cash book but had not yet been entered in the bank statement.
(ii) Bank charges of £140 shown in the bank statement had not been recorded in the academy’s accounts.
(iii) A receipt from a debtor for £2,400 had been incorrectly debited in the cash book as £4,200.
(iv) Cheques drawn amounting to £12,000, entered in the cash book, did not appear in the bank statement.
(v) The bank statement contained an amount of £4,000 from a debtor who had settled his debt by BACS. This item has not been entered in the cash book.
(vi) On 30 August, Finance Officer instructed the bank to transfer £7,000 from the deposit account to the current account. This transfer had not been entered on the bank statement at 31 August. However, the academy’s cash book account had been credited with £7,000.
(vii) A standing order of £200 appeared in the bank statement, but had not yet been entered in the cash book.
Required:
(i) Update the bank account.
(ii) Calculate the balance on the bank statement at 31 August.
Learning activity 2.8
Match the financial statement to the definitions in the table below.
Financial statement / Definition1. / Balance sheet / A / This statement summarises the transactions of the academy over the year and shows whether there has been an excess of income over expenditure or vice versa for the year.
2. / Income & Expenditure Account / B / This reconciles the net figure in the Income & Expenditure Account and the net movement to or from funds by showing the unrealised gains and losses for the year.
3. / Statement of total recognised gains and losses / C / This statement shows all incoming resources and resources expended by the academy in the year on all its funds.
4. / Cash flow statement / D / This statement records the financial position at the end of the period.
5. / Statement of financial activities / E / This statement records performance over the period from a cash perspective.
Learning activity 2.9
Review the list of headings below. Which financial statement does each of these headings belong in? Indicate your response by placing a tick in the appropriate column.
Heading / Income & expenditure Account / Statement of financial activities / Balance sheet / Cash flow statementIncoming resources
Income
Fixed assets
Expenditure
Receipts
Resources expended
Debtors
Payments
Creditors
Learning activity 2.10
GB Academy was converted on the 1 Sept 2011. The following relate to the first few days of the since conversion.
Sept / Transaction1 / These are the known opening balances at the time of conversion:
Land and building £1,500,000
Cash at bank £ 50,133
Reserve – fixed asset restricted fund £1,500,000
1 / Received start up grant from EFA £25,000.
1 / Received delivery for ICT equipment from Office Automation Plc to the value of £20,000. The invoice is being processed.
1 / Received delivery of catering supplies for school canteen £3,000 from Green and Grow Ltd. This is on a 30 day credit term.
5 / Takings for school meals of £5,000, was deposited.
7 / Paid a cheque of £15,000 for books.
8 / Made quarterly payment of £1,500 by cheque for building insurance expenses
9 / Made quarterly lease payment on photocopying machine
£8,400 to Xerox and paid School supplies £5,000 for supplying photocopying materials.
12 / Received LA remittance of £15,000 for special needs support. This was deposited on the same day.
12 / Received cleaning materials from Rainbow supplies. The invoice of £590 was passed for processing.
12 / Paid invoices received from Office Automation Plc in full.
13 / Received an invoice of £16,000 from Toptutors Agency for agreed supply teaching.
15 / Paid wages of catering assistants £400.
Requirements
a) Post the transactions in the relevant ledger accounts for the period ending 15 September, 2011. (balancing is optional)