Financial Accounting and Adjusted Trial Balance

This document provides an overview of financial accounting and the concept of adjusted trial balance. It explains the importance of recording transactions and preparing trial balances. Find study material and solved assignments on Desklib.

ACCOUNTING 1
ACCOUNTING

ACCOUNTING 2
Part A:
T accounts:
Accounts receivables
Date Particulars Debit Credit
Jun-
01 Bank
1,200.0
0
Jun-
03 Bank
905.0
0
Jun-
08 Bank
1,900.0
0
Jun-
13 Bank
700.0
0
Jun-
18 Bank
3,465.0
0
Jun-
28 Bad debt expense
250.0
0

ACCOUNTING 3
Rent expense
Date Particulars Debit Credit
Jun-
04 Bank
1,500.0
0
Discount allowed
Date Particulars Debit Credit
Cash register and other stationery expense
Date Particulars Debit Credit
Cash at bank 220.0

ACCOUNTING 4
0
Cash at bank
Date Particulars Debit Credit
Jun-
01 Accounts receivables
1,200.0
0
Jun-
04 Rent
1,500.0
0
Jun-
06 Accounts payable
4,500.0
0
Jun-
08 Accounts receivables
1,900.0
0
Jun-
11 Accounts payable
1,397.0
0
Jun-
12 Telephone expense
320.0
0
Jun-
13 Accounts receivables
700.0
0
Jun-
14 Sales revenue
20,900.0
0
Jun-
14 Wages expense
5,200.0
0

ACCOUNTING 5
Jun-
17
Cash register and other
stationery
220.0
0
Jun-
23 Accounts payable
3,200.0
0
Jun-
27 Sundry expense
435.0
0
Jun-
29 Sales revenue
27,500.0
0
Jun-
30 Wages expense
5,600.0
0
Jun-
30 Sales revenue
4,200.0
0
Jun-
30 Accounts payable
1,700.0
0
GST paid
Date Particulars Debit Credit
Jun-
05 Purchases
127.0
0
Jun-
30 Purchases
410.0
0

ACCOUNTING 6
Discount received
Date Particulars Debit Credit
Jun-
06 Accounts payable
50.0
0
Sundry expense
Date Particulars Debit Credit
Jun-
27 Cash at bank
435.0
0
Sales revenue
Date Particulars Debit Credit
Jun-
03 Accounts receivables
823.0
0
Jun-
14 Cash
19,000.0
0

ACCOUNTING 7
Jun-
18 Accounts receivables
3,150.0
0
Jun-
29 Cash
25,000.0
0
Jun-
30 Accounts receivables
140.0
0
Jun-
30 Cash
3,818.0
0
Purchases
Date Particulars Debit Credit
Jun-
05 Accounts payable
1,270.0
0

ACCOUNTING 8
Jun-
30 Accounts payable
4,100.0
0
Telephone expense
Date Particulars Debit Credit
Jun-
12 Bank
320.0
0
Bad debt expense
Date Particulars Debit Credit
Jun-
28 Accounts receivables
250.0
0
GST collected

ACCOUNTING 9
Date Particulars Debit Credit
Jun-
03 Sales 82.00
Jun-
14 Sales 1,900.00
Jun-
18 Sales 315.00
Jun-
29 Sales 2,500.00
Jun-
30 Sales return 14.00
Jun-
30 Sales 382.00
Accounts payable

ACCOUNTING 10
Date Particulars Debit Credit
Jun-
05 Purchases 1,397.00
Jun-
06 Bank 4,550.00
Jun-
11 Bank 1,397.00
Jun-
11 Bank 3,200.00
Jun-
30 Bank 1,700.00
PAYG
Date Particulars Debit Credit
Jun-
14 Wages expense 2,200.00
Jun-
30 Wages expense 2,000.00
Wages expense
Date Particulars Debi Credi

ACCOUNTING 11
t t
Jun-
14 Wages payable 7400
Jun-
30 Wages payable 7600
Post-closing trial balance:
Particulars
Unadjusted trial
balance Adjustments Adjusted Trial balance
Debit Credit Debit Credit Debit Credit
Cash at
bank
25,200.
00
27,675.
00
52,875.
00
Debtors
control
9,000.
00
-
220.00
9,220.
00
Provision
for doubtful
debts
300.
00
300.
00
Inventory
85,000.
00
1,270.
00
86,270.
00
Shop
Fittings and
Equipment
60,000.
00
60,000.
00

ACCOUNTING 12
Acc
depreciation
–Shop
fittings and
Equip
10,465.
00
5,460.
00
15,925.
00
Motor
Vehicles
35,000.
00
35,000.
00
Accumulate
d
depreciation
–M/Vehicle
s
11,500.
00
6,000.
00
17,500.
00
Creditors
control
14,000.
00
11,789.
00
2,211.
00
Wages
payable
1,320.
00
1,320.
00
Income tax
payable
12,430.
00
12,430.
00
Share
capital
60,000.
00
60,000.
00
Retained
profits
81,735.
00
81,735.
00
Sales
revenue
53,469.
00
53,469.
00
GST Paid 4,300. 537. 4,837.

ACCOUNTING 13
00 00 00
GST
Collected
8,500.
00
5,347.
00
13,847.
00
PAYG
4,200.
00
4,200.
00
Loan
32,000.
00
32,000.
00
Discount
allowed
100.
00
100.
00
Rent
expense
1,500.
00
1,500.
00
Discount
received
50.
00
50.
00
Telephone
expense
320.
00
320.
00
Wages
expense
16,320.
00
16,320.
00
Cash
register
expense
220.
00
220.
00
Sundry
expenses
435.
00
435.
00
Income tax
expense
12,430.
00
12,430.
00

ACCOUNTING 14
Advertising
expense
3,500.
00
3,500.
00
Depreciatio
n expense-
shop fittings
5,460.
00
5,460.
00
Depreciatio
n expense-
motor
vehicle
6,000.
00
6,000.
00
Miscellaneo
us expenses
250.
00
250.
00
Bad debt
expense
250.
00
250.
00
Total
2,18,500.
00
2,18,500.
00
88,056.
00
88,056.
00
2,94,987.
00
2,94,987.
00
Statement of Financial Performance for June:
Statement of profit and loss:
Sales revenue 53,469.00
Less: expenses

ACCOUNTING 15
Discount allowed 100.00
Rent expense 1,500.00
Discount received -50.00
Telephone expense 320.00
Wages expense 16,320.00
Cash register expense 220.00
Sundry expenses 435.00
Income tax expense 12,430.00
Advertising expense 3,500.00
Depreciation expense-shop
fittings 5,460.00
Depreciation expense-motor
vehicle 6,000.00
Miscellaneous expenses 526.00
Bad debt expense 250.00 47,011.00
Gross profit 6,458.00
Statement of Financial Position as at 30 June:
Statement of financial position:
Current Assets:

ACCOUNTING 16
Cash at bank
52,875.0
0
Debtors control
9,220.0
0
Provision for doubtful debts
-
576.00
Inventory
86,270.0
0
GST
4,837.0
0
Total current assets
1,52,626.0
0
Shop Fittings and Equipment
60,000.0
0
Acc depreciation –Shop
fittings and Equip
-
15,925.00
Motor vehicles
35,000.0
0
Acc depreciation –motor
vehicles
-
17,500.00

ACCOUNTING 17
Total Assets
2,14,201.0
0
Current Liabilities:
Creditors control
2,211.0
0
Wages payable
1,320.0
0
Income tax payable
12,430.0
0
GST
13,847.0
0
Loan
32,000.0
0
PAYG
4,200.0
0
Total current liabilities
66,008.0
0
Shareholder’s equity:
Share capital
60,000.0
0
Retained earnings 88,193.0

ACCOUNTING 18
0
Total Liabilities and
shareholder’s equity
2,14,201.0
0
Bank Reconciliation at 30 June:
Borderline Ltd.
Bank Reconciliation for June, 2018
$ Working Note
Cash at Bank as per Books 55,316 A
Add: Outstanding Cheques
- Chq No. 563
1,36
9
- Chq No. 565
22
0
- Chq No. 567
43
5
- Chq No. 568
6,00
0 8,024
Less: Outstanding Deposits 6,200

ACCOUNTING 19
Cash at Bank as per Bank Statement 57,140
Working Note A
Dr. Cr.
Cash at Bank 31-May 25,200
Received from Roar Ltd. 01-Jun 1,200
Rent for June - Chq No. 561 04-Jun 1,500
Paid to Yard - Chq No. 562 06-Jun 4,500
Received from Wide Ltd. 08-Jun 1,900
Paid to Pink - Chq No. 563 11-Jun 1,369
Paid Telephone bill - Chq No. 564 12-Jun 320
Received from Jones 13-Jun 700
Banked Cash Sales 14-Jun 20,900
Withdrew Cash for paying wages 14-Jun 5,200
Cash Register Rolls - Chq No. 565 17-Jun 220
Paid to Purple - Chq No. 566 23-Jun 3,200
Paid Sundry Expenses - Chq No. 567 27-Jun 435
Deposited Cash Sales 29-Jun 27,500
Withdrew Cash for paying wages 30-Jun 5,600
Banked Cash Sales 27-Jun 6,200
Paid to Zale - Chq No. 568 27-Jun 6,000
Bank Fee 27-Jun 23
Interest 27-Jun 83
83,683 28,367
Cash at Bank 30-Jun 55,316

ACCOUNTING 20
Part B:
Sub part a:
Financial accounting if the special branch of accounting that helps the company in keeping a
track of all of the business transactions that have taken place during the year for the company.
These transactions are recorded using some basic guidelines and procedures. The financial
statements reports these financial facts or the financial transactions that the company has
entered inti during the year. It shows the sales revenue that has been earned by the company
along with the amounts of the expenses that have been incurred in respect of the same. It
shows the amount of the net income that has been earned by the company and the amounts
due to the company by outsiders along with the amounts due by the company to the outsiders.
The company prepares the statement of profit and loss along with the statement of financial
position.
In respect of the company whose accounting transactions have been recorded in the books of
accounts, it could be said that it has reported a profit for the year which means it has earned
more revenue that the expenses that it has incurred for the purpose of earning that revenue.
But still the company needs to look for the ways through which its revenue could be
improved and its expenses could be reduced so that its profitability increases in the future.
This is required to ensure sustainability of it in the future ("Financial Accounting |
Explanation | AccountingCoach", 2019).
Sub part b:
An unadjusted trial balance is the trail balance before the adjustments have been made by the
company. This is the trial balance that journalists thee transactions and posts them in this

ACCOUNTING 21
respective ledger. The same is done for the purposes of testing the equality of the debit and
the credits after the phase of recording.
An adjusted trial balance is the trial balance which is prepared after the unadjusted trial
balance has been adjusted through the recording of the adjustments. The main aim again is to
test if the debits and the credits are equal after all of the adjustment have been prepared. It
forms the very basis of the preparation of the financial statements. This adjusted trial balance
contains the nominal and the real accounts. The nominal accounts are the ones that are found
in the statement of profit and loss whereas the real accounts are the ones that are found in the
statement of financial position.
The post closing trial balance is the one that prepares the closing entries. The main aim of it
is the testing of the fact of the amount of the debit is equal to the amount of the credit after
these closing entries have been prepared and tested. The post closing trial balance is the one
that contains all of the nominal accounts that have to be closed at this stage ("Post Closing
Trial Balance - AccountingVerse", 2019).
Sub part c:
The closing entries are the entries that are passed at the end of the month to close the income
summary account and the expense summary account. The net effect of these accounts is 0
since the balance between the income and the expense is transferred to the retained earnings
account or to the shareholders equity account.
The adjustment entries are the ones that are reported in the financial statements to record
adjustments that have to be made in the final accounts. If these entries are not recorded, then
the expenses and the revenue reported would not be correct since the financial statements are
prepared on the basis of accrual based accounting and to report these correctly in the final
accounts, an adjustment entry is required ("Closing Entries | Financial Accounting", 2019).

ACCOUNTING 22
The following are the desired entries:
Date Particulars Debit Credit
Jun-30 Wages expense
1,320.0
0
To Wages payable
1,320.0
0
Jun-30 Electricity expense
1,100.0
0
To Electricity expense
payable
1,100.0
0
Jun-30 Advertising expense
3,500.0
0
To Advertising expense
payable
3,500.0
0
Jun-30 Income tax expense
12,430.0
0
To income tax expense
payable
12,430.0
0
Jun-30 Revenue
53,469.0
0

ACCOUNTING 23
To Income Summary
53,469.0
0
Jun-30 Income summary
47,011.0
0
To Discount allowed
100.0
0
To Rent expense
1,500.0
0
To Discount received
-
50.00
To Telephone expense
320.0
0
To Wages expense
16,320.0
0
To Cash registed expense
220.0
0
To Sundry expenses
435.0
0
To Income tax expense
12,430.0
0
To Advertising expense
3,500.0
0
To Depreciation expense-
shop fittings
5,460.0
0
To Depreciation expense- 6,000.0

ACCOUNTING 24
motor vehicle 0
To Miscellaneous expenses
526.0
0
To Bad debt expense
250.0
0
Sub part d:
A bank reconciliation statement is the statement that is used for the purposes of
comparing the records of the banks. The main aim of the same is to note the differences
between the balance of the bank and the balance in the cash book. When we add or
subtract the relevant differences, then we arrive at the bank balance of the cash balance.
These differences are very important to consider since otherwise, there shall be a
substantial variance between the amount in the cash book and the amount in the bank
book. These differences could result in overdrawing of the bank accounts, bounced
checks etc. Also, this is the statement which is prepared for the purposes of the
ascertaining if any checks of the customers have bounced or have been stolen. This helps
in the detection of fraud. When there is an ongoing investigation of any fraud, then it
becomes important for the company to do a bank reconciliation. This is done for the
purposes of understanding the reasons for the variances and also this helps in receiving
an early warning for the fraud.
When it comes to conducting an annual audit, then the auditors would always go for the
examination of the bank reconciliation statement which forms the part of the testing

ACCOUNTING 25
procedures of the company which becomes another reason of what a bank reconciliation
is done (Bragg & Bragg, 2019).
The following are the desired entries:
Borderline Ltd.
Bank Reconciliation for June, 2018
$ Working Note
Cash at Bank as per Books 55,316 A
Add: Outstanding Cheques
- Chq No. 563
1,36
9
- Chq No. 565
22
0
- Chq No. 567
43
5
- Chq No. 568
6,00
0 8,024
Less: Oustanding Deposits 6,200
Cash at Bank as per Bank Statement 57,140
Working Note A
Dr. Cr.
Cash at Bank 31-May 25,200

ACCOUNTING 26
Received from Roar Ltd. 01-Jun 1,200
Rent for June - Chq No. 561 04-Jun 1,500
Paid to Yard - Chq No. 562 06-Jun 4,500
Received from Wide Ltd. 08-Jun 1,900
Paid to Pink - Chq No. 563 11-Jun 1,369
Paid Telephone bill - Chq No. 564 12-Jun 320
Received from Jones 13-Jun 700
Banked Cash Sales 14-Jun 20,900
Withdrew Cash for paying wages 14-Jun 5,200
Cash Register Rolls - Chq No. 565 17-Jun 220
Paid to Purple - Chq No. 566 23-Jun 3,200
Paid Sundry Expenses - Chq No. 567 27-Jun 435
Deposited Cash Sales 29-Jun 27,500
Withdrew Cash for paying wages 30-Jun 5,600
Banked Cash Sales 27-Jun 6,200
Paid to Zale - Chq No. 568 27-Jun 6,000
Bank Fee 27-Jun 23
Interest 27-Jun 83
83,683 28,367
Cash at Bank 30-Jun 55,316
Part C:
The company is exposed to many risks such as the changes that take a place in the climate.
And this is regarded as the biggest environmental risks. This is the change that occurs due to

ACCOUNTING 27
the changes in the atmosphere that traps the heat off the sun which cause changes in the
global weather patterns. This has many environmental, economic and social impacts.
Environmental concerns that need addressing:
The following are the risks that the company is exposed to due to climate changes:
 Frequent changes in the weather due to which the business may or could have
increased costs of insurance which may cause an intense amount of damage to the
property and the resources along with disruption of the services of the basic amenities
such as water and power. Further this may also lead to a delay in the delivery of the
goods and delay in the receipt of the goods from the suppliers.
 Decrease in the demand of the products or the services: There could be a fall in the
demand for the goods or the services of these are not environment friendly. And the
customer may opt for the products from the competitors off the company that are
offering user friendly products. This causes an increase in the demand of the energy
and the environment friendly products. Further if the business cannot see a future,
then it would become impossible for the company to retain and attract new talents.
 Global impacts: The suppliers from the overseas may not be able to deliver goods due
to the climate changes occurring in the country and this would result the customers to
buy from local markets.
 Increase costs: If the scarce resources such as energy, water etc may be disrupted then
that may result in an increased amounts of costs. The water restrictions could also
affect the business at large.
How can these be addressed:

ACCOUNTING 28
The following are the regulatory requirements with regard to the environment and the non-
compliance of it’s could result in penalties being levied on the company:
 The national greenhouse and the energy reporting act of the year 2007
Thee above listed down environmental risks could be mitigated through the preparation of the
work management plan that would deal with the climate changes. Plan must be in place to
protect the businesses from any sort of losses that would be the result of the climate changes
and the way the same would affect the future of the company.
The business must look for the ways that would help in the addressing of the changes in the
climate and the way in which the sustainability of the business could be improved
("Environmental Issues That Affect Business", 2019).
There is an environment protection agency which is the management body to deal with the
corporate compliance with the rules and regulations that affect the companies today.
Further, there are some employee health and morale plans that helps the companies in
performing better and this is of an utmost importance since it helps in the creation of a
positive company culture. There are some EPA rules and regulations that regulates the
environmental compliance and then there is a Department of Labour office which regulates
the work environments. The companies today have no issues with regard to providing safe
and healthy work environment for the employees.
Financial impact:
Today the customers are willing to go for the companies that re choosing to work with the
business objectives of the positive environmental missions. The promotion of the sustainable
practices for the purposes of ensuring a healthy environment is of an utmost importance since

ACCOUNTING 29
without the customers, the business would not be in a position to earn profits and sustain
itself in the long run which would prove to be handful for it.
Importance of addressing:
These environmental concerns are important since his business uses the resources of the
environment and provides employment to the society and to the people. It is duty bound to
give environment something in return when it is using its scarce resources. Hence it is the
duty of the company to do something for the society. If it does something to cater to the
needs of the environment, then it merely shows a sense of responsibility for the environment
(("Environmental Issues That Affect Business", 2019).

ACCOUNTING 30
References
Bragg, S., & Bragg, S. (2019). The purpose of a bank reconciliation. Retrieved from
https://www.accountingtools.com/articles/what-is-the-purpose-of-a-bank-
reconciliation.html
Bragg, S., & Bragg, S. (2019). The purpose of a bank reconciliation. Retrieved from
https://www.accountingtools.com/articles/what-is-the-purpose-of-a-bank-
reconciliation.html
Closing Entries | Financial Accounting. (2019). Retrieved from
https://courses.lumenlearning.com/suny-finaccounting/chapter/journalizing-and-posting-
closing-entries/
Closing Entries | Financial Accounting. (2019). Retrieved from
https://courses.lumenlearning.com/suny-finaccounting/chapter/journalizing-and-posting-
closing-entries/
Environmental Issues That Affect Business. (2019). Retrieved from
https://smallbusiness.chron.com/environmental-issues-affect-business-4175.html
Environmental Issues That Affect Business. (2019). Retrieved from
https://smallbusiness.chron.com/environmental-issues-affect-business-4175.html
Environmental risks to your business | Business Queensland. (2019). Retrieved from
https://www.business.qld.gov.au/running-business/environment/environment-business/
risks

ACCOUNTING 31
Environmental risks to your business | Business Queensland. (2019). Retrieved from
https://www.business.qld.gov.au/running-business/environment/environment-business/
risks
Financial Accounting | Explanation | AccountingCoach. (2019). Retrieved from
https://www.accountingcoach.com/financial-accounting/explanation
Financial Accounting | Explanation | AccountingCoach. (2019). Retrieved from
https://www.accountingcoach.com/financial-accounting/explanation
Post Closing Trial Balance - AccountingVerse. (2019). Retrieved from
https://www.accountingverse.com/accounting-basics/post-closing-trial-balance.html
Post Closing Trial Balance - AccountingVerse. (2019). Retrieved from
https://www.accountingverse.com/accounting-basics/post-closing-trial-balance.html