It is the end of the financial year. Your client, XYZ company requires assistanc

Question

It is the end of the financial year. Your client, XYZ company requires assistance identifying and managing the risks of taxation compliance.

Prepare a financial extract to identify and manage risks by advising your client which transactions to collect and enter in the accounting system. Include revenues and expenses. Specifically mention livestock selling expenses that are incurred away from the business and for which the manager often forgets to collect a receipt. Describe how bank accounts can be set up to ensure this type of transaction is recorded.

Explanation / Answer

The XYZ company should creat RCTI(Recipient created tax invoice). This should be created to show how the business is selling gooda and recipient creating tax invoice.recipient can recod this transaction in his book of accounts.RCTI will have comnapy's ABN and can treat as tax invoice.

the income and expense component should be recorded separatly.

the incom component can be recorded as a Tax Invoice or sales reciept

the expense component can be recorded as a Bill or Cheque.

Reconciliation should be done by bank account and in the books of account of the company.

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