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110.109

Introductory Financial Accounting

Assessment 2 Booklet

Distance & Internal

Semester 1 – 2026

IMPORTANT INFORMATION

This is an electronic assessment and must be completed using the accounting package Xero.

Assessment 2 contributes 15% towards your final grade and is due at 11.00 pm, New Zealand time, on March (New Zealand Time).

For this assessment, you are required to submit three (3) PDF files:

• Three PDF files are exported from Xero, namely, the Journal Report, Profit and Loss Statement and Balance Sheet.

• The file naming convention for the Xero exported PDFs is provided on page 7 of this booklet.

Assessment 2 covers material from weeks 1 to 4 inclusive and mainly relates to the following learning outcomes:

1. Discuss the financial reporting framework for general purpose financial statements for commercial enterprises.

2. Identify, measure, record and communicate economic transactions and events of commercial enterprises’ operations using fundamental accounting concepts, including the double entry accounting system.

Before attempting this assessment, it is strongly recommended that you read the Assessment Information and Assessments 2 and 3 General Instructions (e.g., extensions, submissions, etc.) on the course Stream site and the assessment details on the following pages thoroughly. You should also study the relevant material in the textbook and make sure you understand the concepts covered by practising the weekly exercises and workshop questions before or as you complete this assessment.

To complete this assessment, you must sign up for a free Xero trial account or use an existing account if you already have one. Details for signing up and use of Xero are provided in the “Assessment 2 Details” on the following page.

Please remember that all 110.109 assessments must be your own work. Discussion on Stream or in study groups is fine, but comparing or suggesting answers on Stream or in study groups as opposed to concepts may lead to marks being deducted to the extent of receiving zero marks if answers are too similar. If you are unsure about this issue, you are welcome to use the Private Conversations on the course Stream site.

ASSESSMENT 2 DETAILS

How to Get Started with This Assessment

Once you have set up a Xero account, you can create a trial organisation. Please note that you can create as many trial organisations as you want, but each trial organisation lasts only 30 days. This means that after you have set up an organisation that is required to complete this assessment, you will have only 30 days of access to process transactions and prepare journal reports and financial statements.

To complete this assessment, you must follow the “Xero Student Manual” and a “pre recorded Xero up-skill training session”, available in the “Assignment 2 Xero Files” folder on the course Stream site. Please note that the “Xero Student Manual” is not the most up-to date version; therefore, you may notice minor differences between the manual and the current Xero platform. For the latest guidance, a range of Xero resources is provided below.

Create a Xero account

• Go to the Xero sign-up page, then follow the prompts on the screen to sign up (Location: Select New Zealand).

• Go to https://status.xero.com/ to check that Xero has no current issues or downtime.

• Xero requires Multi-Factor Authentication (MFA) when you log in (Click here to set up MFA). If you don’t have a smartphone or tablet or can’t download “Xero Verify” or

“Google Authenticator” from the iOS App Store or Google Play Store, you can install

Authy on your laptop or desktop computer. The desktop version of Authy can be downloaded directly from Authy's website.

o Download Authy

o How to enable MFA for Xero using Authy

Please note that if you would like to set up MFA using the Authy app on your smartphone or tablet, you can still do so. The Authy app can be downloaded from the iOS App Store or Google Play Store. Click here for more information about MFA.

Xero Additional Resources

• Once logged into Xero, you can find answers to your queries by clicking on Help next to your login name.

• Student Support for Xero

o Xero Central online help - Online articles, videos, and help

o Xero TV - How to video series for all tasks in Xero

Kayaks Exercise – Not Part of the Assessment

It is highly recommended that you practise the Kayaks exercise following the Xero Student Manual before you start attempting this assessment. Completing the Kayaks exercise will increase your confidence in doing this assessment, even though this exercise is not part of the assessment. You need to create a trial organisation for the Kayaks exercise following the Student Manual. Please note that once you have created a trial organisation for the Kayaks exercise, it will last for 30 days only.

You can locate the Xero Student Manual (which includes the case study “Your Name Kayaks”), Kayaks Exercise Files, and Kayaks Exercise Solutions on the course Stream site within the Assessment section in the folder of Assessment 2 Xero Files.

Kayaks Exercise Files contain:

• CoA-kayaks student (.csv file). This is the Chart of Accounts, which you will import for use in setting up the accounts for the “Your Name Kayaks” company.

• BS-kayaks (.csv file). This is the Bank Statement file that you will import to perform bank reconciliation for the Kayaks exercise. Please note that for this assessment, we do NOT require you to perform bank reconciliation in Xero.

Kayaks Exercise Solutions include three files that you can use to check your answers.

Please note that the Kayaks exercise is not part of the assessment, but it will prove easier to complete Assessment 2 if you have first worked through it in Xero.

Assessment 2: Xero Accounting Question

On 1 January 2026, you started a business and decided to use the accounting package Xero to process your company’s transactions. Your company sells electric bikes and offers bike repair services.

Please ensure that you follow the seven (7) steps outlined below to complete this Xero assessment. Whenever needed, please consult the Xero Student Manual (hereafter the

Student Manual) for further guidance.

Step 1: Set up your company

Log in to your Xero account. If you are taken straight to the demo company, click on the demo company name in the upper left corner of your screen, select “My Xero”, and then select “Add an organisation”.
Follow the instructions below:

Business name: “Your Surname + Student ID + Ltd” (e.g., Smith12345678 Ltd)

Industry: Select “Retailing Trade”

Country: New Zealand

Do you have employees? Choose “Yes”

Are you registered for GST: Tick “Yes, calculate GST on my transactions”

Click on “Start trial”

Step 2: Favourite Journal Report

Choose the organisation you just created, select the Accounting drop-down menu, click on “Reports”, then scroll down to “Taxes and balances”, then star the “Journal Report”.

Step 3: Create a bank account

Select “Bank accounts” from the Accounting drop-down menu, then click on , then follow the instructions below:

Find account: type “Massey”, then click on “Add without bank feed” at the bottom of

the screen, then choose “Continue”

Bank name: Massey

Account Name: Massey-your surname (e.g., Massey-Smith)

Account Type: Other

Account number: Your student ID number (e.g., 12345678)

Currency: choose NZD, New Zealand Dollar

Click “Add account”

Step 4: Edit accounts – refer to the Student Manual (p.29 – Modify the Imported Chart of Accounts)

Click on “Chart of accounts” from the Accounting drop-down menu and then find accounts “970 Owner A Funds Introduced”, and “980 Owner A Drawings”.
Click on them, then you can edit the account details using the following information.

Code	Name	Account Type	Tax	Tick
970	Under Name, change to “Capital – your surname” (e.g., Capital-Smith)	Equity	No GST	Enable payments to this account
980	Under Name, change to “Drawings – your surname” (e.g., Drawings-Smith)	Equity	No GST	Enable payments to this account

Step 5: Create the following account(s)

Create an account using the following information. Select “Chart of accounts” from the Accounting drop-down menu, then select
Enter the following information. Refer to the Student Manual (p.30 – Add New Accounts).

Code	Name	Account Type	Tax
210	Bike Repair Fees	Other Income	15% GST on Income

Step 6: Add inventory items

o Modify the following accounts using the following information.

Code	Name	Account Type	Tax
200	Under Name, change to “Sales - Bike”	Revenue	15% GST on Income
310	Under Name, change to “Cost of Goods Sold - Bike”	Direct Costs	No GST
630	Under Name, change to “Inventory - Bike”	Inventory	No GST

o Set up inventory using the following information (refer to the Student Manual, p.37 – Inventory Set-Up)

o Code: Bike

o Name: Leave blank

o You must check the “Track inventory item” box, which brings up a drop

down box to select the Inventory account associated with the item of inventory.

Inventory Account: 630 Inventory - Bike

Electric Bike

Cost price excluding GST

$700 per unit

Selling price excluding GST

$1,200 per unit

Step 7: Process transactions in chronological order

If you have practised the Kayaks exercise, it will become easier to process the following transactions in Xero.

Date

2026

Transaction

All amounts include GST (15%) where relevant unless otherwise stated.

All invoices and bills have a due date of 30 March 2026.

January

Invested $50,000 (GST exclusive) cash in the business.

From the Accounting drop-down menu, select Bank Accounts and access the

Manage Account drop-down menu. Under New, select Receive Money.

Received as: Direct Payment. From: Your surname (e.g., Smith). Date: 1 January.

Reference & Item: leave blank. Amounts are: Tax Exclusive. Description: Provide

your description. Qty: 1. Unit Price: $50,000. Account is 970 Capital – your

surname. Select Save.

January

Purchased office equipment on account from Office World, $1,610 (GST inclusive).

From the Business drop-down menu, select Bills to pay, then select New bill.

From: Office World. Date: 2 January. Due Date: 30 March. Reference & Item: leave

blank. Amounts are: Tax Inclusive. Description: Provide your description. Qty: 1.

Unit price: $1,610. Account is 710 Office Equipment. Select Approve.

January

Used business EFTPOS card to pay T. van Zijl rent for January, $575 (GST

inclusive).

From the Accounting drop-down menu, select Bank Accounts and access the

Manage Account drop-down menu. Under New, select Spend Money.

Spent as: Direct Payment. To T. van Zijl. Date: 3 January. Reference: EFTPOS.

Amounts are: Tax Inclusive. Item: leave blank. Description: Provide your

description. Qty: 1. Unit price: $575. Account is 469 Rent. Select Save.

January

Purchased 30 bikes on credit from the Warehouse NZ @ $700 each (GST

exclusive).

Select New bill under Bills to pay from the Business drop-down menu. Then refer to

the Student Manual (p.41 – Process Credit Transactions for Inventory Items) and

following:

Due Date: 30 March. Amounts are: Tax Exclusive. Item: Bike. Account is 630

Inventory – Bike. Tax Rate: 15% GST on Expenses.

Important: The inventory account 630 is automatically pulled up after you enter the

inventory item code – Bike (refer to Step 6 for the inventory code setup) or select

from the drop-down menu under “Item”. You cannot select account 630 as it is

tracked when setting up.

January

Sold 20 Bikes to TNN Ltd on credit @ $1,200 each (GST exclusive).

From the Business drop-down menu, select Invoices and then select New invoice.

Refer to the Student Manual (p.43 – Inventory Sales on Credit) and following:

Contact: TNN Ltd (Create TNN Ltd as a new contact, then Cancel “Update contact

details”). Due date: 30 March. Reference: leave blank. Invoice number: Use the

default value. Click Approve & email, then cancel “Send email” when prompted to

send the invoice via email.

January

TNN Ltd returned 2 bikes purchased on 8 January. The bikes are not faulty and,

therefore, returned to inventory.2601/110.109 Assessment 2 Booklet

Distance/Internal

Access a New Credit Note under the Sales overview from the Business drop-down

menu. Then refer to the Student Manual (p.64 – Inventory Returns by Credit

Customers).

January

Received cash (EFTPOS) for bike repairs, $690 (GST inclusive).

Refer to the Student Manual (p.47 – Worked Example) and the following:

Reference: EFTPOS. Quantity: 1. Account: 210 Bike Repair Fees

January

Paid Mr Ronald $ 500 (GST exclusive) for wages by online bill payment #1100.

Refer to the Student Manual (p.46 – Worked Example) and the following:

Reference: BP1100. Amounts are: Tax Exclusive. Account is 477 Salaries.

January

Returned 2 bikes purchased on 6 January to the Warehouse NZ.

Access a New Credit Note under the Purchase overview from the Business drop

down menu. Then refer to the Student Manual (p.62 – Inventory Returns to Credit

Suppliers).

January

Received an invoice from Outdoor Magazine for advertising fees of $230 (GST

inclusive). The advertising fee is recorded in the Advertising account.

Select New bill under Bills to pay from the Business drop-down menu. Then refer to

the Student Manual (p.67 – Worked Example). Due date: 30 March. Account is 400

Advertising

January

Cash sales (EFTPOS): 6 Bikes @ $1,200 each (GST exclusive).

From the Accounting drop-down menu, select Bank Accounts and access the

Manage Account drop-down menu. Under New, select Receive Money. Then refer to the Student Manual (p.48 – Worked Example), using Reference: EFTPOS.

January

You gave 1 bike to your friend as a birthday gift.

Refer to the Student Manual (p.70 – Worked Example) and following:

To locate Manual Journals, from the Accounting drop-down menu, select Journal

Report under Reports, then select “Go to manual journals” and then follow the Step

2 instructions on p.71 of the Student Manual.

Required: Refer to the Student Manual (p.85 & 86 – View Your Reports)

i. Prepare the Journal Report for January and export it as a PDF file. Save the file and name your file “SurnameID#JR” (The ID# being your student ID number, e.g.,

Smith12345678JR). (40 marks)

Hint: Date range: 1 January 2026 – 31 January 2026; Columns: 8 columns selected (by default); Order by: Date, then click Update.

ii. Prepare the Profit and Loss Statement for the month ended 31 January 2026 and export it as a PDF file. Save the file and name your file “SurnameID#PL”. (30 marks)

Hint: Date range: 1 January 2026 – 31 January 2026; Compare with: None;

More: Select Accrual & Decimals, then click Update.

iii. Prepare the Balance Sheet as at 31 January 2026 and export it as a PDF file. Save the file and name your file “SurnameID#BS”. (30 marks)

Hint: Date: 31 January 2026; Compare with: None;

More: Select Accrual & Decimals, then click Update.

***Total Marks for Assessment 2 = 100 Marks***

MARKING GUIDE

Xero Accounting Question

Criteria	Value
i. Journal Report [40]
Correct Dr. & Cr. accounts and amounts	40
ii. Profit and Loss Statement [30]
Correct Sales amount	10
Correct Cost of Goods Sold amount	10
Correct Total Operating Expenses amount	5
Correct Net Profit amount	5
iii. Balance Sheet [30]	5
Correct Total Bank amount	5
Correct Inventory amount	5
Correct Office Equipment amount	5
Correct GST amount	5
Correct Net Assets amount	5
Correct Drawings amount	5
Total	100