Accounting Fundamentals

Accounting Fundamentals

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
TASK 1...................................................................................................................................3
Journal Entries in the books of Sandrolia Limited:................................................................3
Updated trial balance of Sandrolia Limited:..........................................................................4
Preparation of profit and loss account and statement of financial position of Sandrolia
Limited:..................................................................................................................................5
TASK 2...................................................................................................................................6
TASK 3...................................................................................................................................6
Completion of Journal entries in the books of Ricardo Limited:...........................................6
Drawing up Updated trial balance of Ricardo Limited:.........................................................7
Preparation of profit and loss account and statement of financial position of Ricardo Limited:
................................................................................................................................................8
TASK 4. Comparing and contrasting liquidity and profitability:...........................................9
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
The current era is age of trading and business. Following globalization, liberalization, and
outsourcing, from day to day business becomes rising and being dynamic as well. An
organisation, for long time, can't remember all dealings and financial events. Hence, keeping a
registered record of any and all commercial transactions with each day becomes important, this
leads to accounting growth. Accounting relates to process which helps to document, sum up,
monitor and evaluate financial transaction related information (Ogneva, Piotroski and
Zakolyukina, 2019). The study covers critical aspects of accounting with help of different tasks
which also includes practical sum of recoding transactions, preparing accounts and finalisation of
annual accounts like profit and loss statement, financial position statement etc. Further it
discusses about principle objects of financial reporting and way to attain transparent as well as
uniform accounting. Moreover, study critically evaluates difference between liquidity and
profitability.
MAIN BODY
TASK 1.
Journal Entries in the books of Sandrolia Limited:
Debit Credit
Depreciation 11670
Motor Vehicle 11670
Depreciation 900
Computer Equipment 900
Telephone Expenses 180
Telephone Expenses Payable 180
Prepaid Insurance 640
Insurance Expense 640
Tax Expenses 1500
Outstanding Tax Expenses 1500

Updated trial balance of Sandrolia Limited:
Debit Credit
Accounts Payable 25680
Accounts Receivables. 30700
Carriage Inwards 1840
Computer Equipment at cost 4500
Carriage Outwards 3280
Drawings 26000
Electricity 2480
Loan Interest 300
Provision for Doubtful Debts 450
Insurance 2720
Motor Vehicle at Cost 53900
Capital 48000
Opening Inventory 13200
Accumulated Depreciation -Motor Vehicle 26670
Accumulated Depreciation - Computer Equipment 3540
Depreciation on Motor Vehicle 11670
Depreciation on Computer Equipment 900
Petty Cash 50
Bank Overdraft 2880
Wages 67440
Purchases 126800
Rent 23760
Sales 256400
Telephones 1620
Tax Expenses 1500
Long term loan 8000
Prepaid Insurance 640
Outstanding Tax Expenses 1500
Telephone Expenses Payable 180
Total 373300 373300
Preparation of profit and loss account and statement of financial position of Sandrolia Limited:
Statement of Profit & Loss