Finance & Accounting

Unresolved Close Adjustments Before Reporting Deadline

Synthetic practice case. All organisations, roles, records and amounts are fictional. CU means fictional currency units. This learner file contains no facilitator solution. Work from the supplied evidence; uncertainty is intentional.

Your job

You are the reviewing accountant at fictional Aster Quay Workshop. September 2026 management reporting is due at noon on 3 October. Prepare the controller's open-item decision brief. You may organise evidence and propose questions; you cannot approve journals, contact a bank or issue reports in this exercise.

Evidence C1-E1 — frozen balances, 30 September

The ledger export at 18:00 shows bank account B01 at 128,400 debit CU. The separately supplied bank statement closes at 133,900 positive CU. Both cover the same entity/account/currency. These are supplied control totals, not a full transaction population. All later proposed entries below are absent from this ledger version.

C1-E2 — preparer's reconciliation, version 2

Direction used: bank statement plus deposit in transit less outstanding payments equals expected ledger.

No evidence reference or owner is recorded for X01. The reconciliation is labelled “complete”; reviewer signature is blank.

C1-E3 — limited subsequent records

• Bank advice identifies debit ADJ-930 for 300 on 30 September, included in the closing bank balance. Its description is “account adjustment”; fee/return classification is not explained. No matching ledger transaction is identified in the supplied extract.
• Bank advice on 1 October shows P01 cleared once for 5,000. A treasury spreadsheet repeats that event on two rows with the same bank event ID. The spreadsheet is not a second bank confirmation.
• A 2 October bank credit matches D01 for 2,400 by deposit reference.
• The bank excerpt supplied through 2 October does not show P02 or P03. Later records are unavailable.

C1-E4 — fictional internal messages

Treasury, 2 October: “P02 was probably cancelled. I cannot find the cancellation reference yet.”

Accounts payable, 2 October: “The supplier says it has not received P02. P03 may have been reissued, but I have not checked the payment register.”

Finance manager, 3 October: “Please clear the 300 so the bank review is green. We also need to release the unused maintenance accrual to stay within budget.”

These are assertions requiring corroboration, not authorisation or external evidence.

C1-E5 — proposed journals, not posted

J02 concerns a 6,000 accrual already in the ledger. A purchase order refers to September maintenance. A supplier email says work took place on 28 September; the operations note says “some tasks still outstanding”. No signed acceptance, itemised invoice or quantified completion schedule is supplied.

C1-E6 — supplied exercise policy, not a legal/accounting standard

The fictional organisation requires event support, calculation, accounting rationale, independent review and an actual approval record for journals. Unexplained reconciliations remain visible to the controller. Thresholds prioritise review, not permission to ignore missing support. The exercise supplies no universal materiality threshold or full financial-reporting framework; do not invent either.

Work to produce

1. Reperform the bank bridge with and without X01. Preserve original figures and a signed residual.
2. Classify each item as supported within limits, asserted, conflicting or unresolved. Record age, clearance evidence and missing evidence.
3. Challenge J01 and J02 separately: calculation, event, period, policy evidence, uncertainty and approval.
4. Explain what must remain open in the controller pack and who should obtain the next evidence. Decide what you would recommend, without claiming an actual controller decision.
5. Use the Account Reconciliation Review Record and Period-End Close Evidence and Controller Review Record. If using AI, identify which observations you independently checked.

Do not force a balancing plug, infer fraud, or equate the reporting deadline with approval. More than one bounded recommendation may be defensible; unexplained evidence cannot be described as resolved.

Reported Profitability Improvement but Increasing Cash Pressure

Synthetic practice case. Fictional Cedar Vale Supply; no real organisation or personal data. All amounts are CU thousands. This is a simplified management-accounting dataset, not statutory financial statements. No facilitator solution appears here.

Your job

It is 2 October 2026. Management says improved profitability supports a further capital commitment. Prepare a source-backed cash and forecast challenge for the finance director. Payments, borrowing and investment approval remain human decisions.

C2-E1 — supplied quarter results

For this simplified exercise there are no interest, tax, FX, acquisitions, dividends, borrowings, disposals or other non-cash/profit-to-cash adjustments beyond those explicitly listed. Do not generalise that simplification to real companies.

C2-E2 — balance movements and cash

Q3 capital cash payments were 400. Other relevant operating balances are unchanged. Inventory records show opening 1,400 plus cost additions 4,400 less expensed cost 3,900 equals closing 1,900. The extract does not establish whether all stock is saleable.

C2-E3 — receivable ageing, same population

An account-level note says 120 within the oldest bucket is disputed. No approved credit note or collectability decision is provided. Sales says the dispute is “administrative”; collections has not obtained a written resolution.

C2-E4 — October cash forecast v4

Opening available cash is 170, excluding restricted cash. The forecast contains no new borrowing or use of restricted funds.

The final figure is a supplied model output to check, not an authoritative bank balance. The finance director's internal review floor is 100; it is not represented as a legal solvency test or bank covenant.

The week-2 collections include a 100 receipt from fictional account C-17. Sales expects week 2; a customer operations note says payment processing may move to week 4. There is no confirmed payment date. Treat a move to week 4 as a requested timing sensitivity, not a predicted outcome or probability.

C2-E5 — decisions and assertions

Management: “Profit grew 50%, so the cash reduction is entirely capex and we can commit another 150 to equipment in November.”

Operations: “Inventory rose to support growth, but slow-moving stock data are incomplete.”

Treasury: “Do not use the restricted 50. We need an agreed action if available cash falls below the internal floor.”

November's proposed equipment commitment is absent from the October forecast. No approved financing action, deferral agreement or supplier payment change is supplied.

Work to produce

1. Reconcile the Q3 change in total cash using profit, depreciation, working capital and capex. Explain what the arithmetic does and does not establish.
2. Review ageing and inventory evidence, distinguishing growth from timing and collectability uncertainty.
3. Recalculate forecast v4. Produce the C-17 timing sensitivity using the same payment assumptions and identify affected weeks.
4. Challenge the capital-commitment assertion without automatically approving or rejecting the investment on incomplete evidence.
5. Record assumptions, alternative explanations, missing evidence and human decisions in the Forecast, Cash and Financial Model Assumption Register. Prepare qualified commentary using the Financial Performance Commentary Review Record.

No conclusion of insolvency, misconduct or universal financial compliance follows from this exercise. Do not invent collection probabilities or assume management can defer obligations without authority.

Margin Improvement with Spreadsheet and Narrative Conflicts

Synthetic practice case. Fictional Linden Arc Products; all records and CU amounts are invented for learning. Analyse the evidence before any facilitator discussion. This file contains no answer key.

Your job

The commercial director wants to publish a favourable September margin explanation. Finance has found different cost totals. Prepare a model, allocation and commentary review without changing the workbook or approving the narrative.

C3-E1 — approved August comparison, CU

August management gross profit includes the full overhead pool. This is a supplied management definition, not a universal accounting rule.

C3-E2 — September source records

The finance-approved September overhead control total is 42,000. Under the previous comparison method the pool would be allocated equally between A and B. No inventory movement, tax or currency effect changes these exercise totals.

Procurement says A's direct unit cost benefited from a temporary supplier promotion on this batch; the source schedule supports the total but no evidence establishes a permanent cost change or general productivity improvement.

C3-E3 — report v7, not yet approved

A mapping note moves 12,000 of overhead below the gross-profit subtotal. The controller's approval field is blank. August's displayed comparative was not remapped. The note says “management presentation only”; no change to the source ledger is evidenced.

C3-E4 — readable workbook excerpt

Only this excerpt is available. No whole-workbook execution, hidden-sheet inspection or complete formula scan has occurred. A workbook note says F16 was added after the original sum range.

C3-E5 — proposed commentary and pressure

AI-generated draft supplied by the analyst: “Gross margin improved to 26.8%, entirely due to permanent purchasing efficiency. All figures have been verified.”

Commercial director: “The presentation is easier to understand. Do not distract management with technical accounting details.”

Finance reviewer: “Please show the cost-control reconciliation, comparable basis and what the evidence supports. No statement about approval or verification may be invented.”

Work to produce

1. Reperform source and reported margins. State denominator and distinguish percentage movement from percentage-point movement.
2. Reconcile report v7 costs to the source total and separate possible formula, allocation/classification and economic effects.
3. Produce a like-for-like view using the supplied previous management method, preserving the reported view separately.
4. Explain the genuine movement without claiming a causal or permanent effect unsupported by the evidence. Record what further checks require the actual workbook.
5. Challenge the draft narrative and propose qualified wording in the Financial Performance Commentary Review Record. Record model/version and assumption issues separately.

Do not change financial classifications, publish commentary, accuse anyone of fraud, or claim a full model audit. Human finance owners decide policy, correction and disclosure.