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(PDF) Introduction to Accounting

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Added on  2021-02-20

(PDF) Introduction to Accounting

   Added on 2021-02-20

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Accounting
(PDF) Introduction to Accounting_1
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3a) Recording, balancing and closing ledger accounts for company.............................................3b) Formulation of trail balance....................................................................................................5c) Preparing of Profit and loss account and balance sheet...........................................................6TASK 2............................................................................................................................................6a) Maintaining general ledger accounts for Pendo......................................................................6b) Balancing and maintaining trail balance.................................................................................9c) Preparing of P&L account and statement of financial position.............................................10TASK 3..........................................................................................................................................11a) Balancing and closing ledger accounts for Mafuta................................................................11b) Recording of trial balance......................................................................................................13c) Formulation of Income statement and statements of financial position................................14........................................................................................................................................................14TASK 4..........................................................................................................................................141. Preparation of ledger accounts and extracting trail balance for Ricardo...............................14TASK 5..........................................................................................................................................17Difference between revenue and capital expenditure................................................................17CONCLUSION..............................................................................................................................20
(PDF) Introduction to Accounting_2
INTRODUCTIONFinancial statements are the reports prepared by the managers of an organisation which helps them in measuring the cash flow position of the recorded business transactions (Ainsworth and Deines, 2019). This is a tool used for analysing as well as interpreting the monetary transactions performed by an entity during an accounting year. It includes preparing balance sheet, profit & loss account, cash flow statement etc. For this purpose, generally the managementteam of any organisation hire specialised personnels i.e. accountants who can monitor and produce the financial statements of the company. The major purpose of this tool is to provide information regarding the financial position of a company i.e. how well a firm is able to measure its liquidity & profitability position for the forthcoming period. TASK 1a) Recording, balancing and closing ledger accounts for company.Journal entry: This is consider to be the main of first step of accounting which is relatedwith recording of crucial business transaction and happening during a specific period(Armstrong, 2017). In companies, there are number of business transaction that are happeningthroughout the year so general entry helped to show the changes in event during an accountingyear. Journal entries for Maxim:DateJournal entryDebit (£)Credit(£)05/04/19Cash Account Dr300To capital Account30007/04/19Purchase Account Dr200To cash Account20008/04/19Cash Account Dr250To loan Account25015/04/19Motor van Account Dr150To cash Account15020/04/19Cash Account Dr350To sales Account35028/04/19Rent Account Dr50To Cash Account5029/04/19Loan Account Dr200To cash Account20030/04/19Drawing Account Dr60To cash Account60
(PDF) Introduction to Accounting_3
Total15601560Ledger account: It is an account that is used to sort, summarise and store valuabledealing of business in context of financial data with all necessary debit and credit accounts whichare beneficial to prepare to trail balance (Chiapello, 2017). Cash A/cDr.Cr.DateParticularAmount(£)DateParticularAmount (£)05/04/19To capitalAccount 30007/04/19By purchaseAccount20008/04/19To loan Account25015/04/19By Motor vanAccount15020/04/19To salesAccount35028/04/19By rent Account5029/04/19By loan Account20030/04/19By DrawingAccount6030/04/19By balance c/d240900900Loan A/cDr.Cr.DateParticularAmount(£)DateParticularAmount (£)29/04/19To cash Account20008/04/19By cash Account25030/04/19To balance c/d50250250Drawing A/cDr.Cr.DateParticularAmount(£)DateParticularAmount (£)30/04/19To cash Account6030/04/19By balance c/d606060Purchase A/cDr.Cr.DateParticularAmount(£)DateParticularAmount (£)
(PDF) Introduction to Accounting_4
07/04/19To cash Account20030/04/19By balance c/d200200200Capital A/cDr.Cr.DateParticularAmount(£)DateParticularAmount (£)30/04/19To balance c/d30005/04/19By cash account300300300Rent A/cDr.Cr.DateParticularAmount(£)DateParticularAmount (£)28/04/18To cash account5030/04/18By balance c/d505050Motor van A/cDr.Cr.DateParticularAmount(£)DateParticularAmount (£)15/04/19To cash Account15030/04/19By balance c/d150150150Sales A/cDr.Cr.DateParticularAmount (£)DateParticularAmount (£)30/04/19To balance c/d35020/04/19By cash350350350b) Formulation of trail balanceAccount TitleDebitCreditCash Account240Purchase Account200Loan Account50Motor van Account150Capital Account300Sales Account350Drawing Account60rent Account50Total700700
(PDF) Introduction to Accounting_5
c) Preparing of Profit and loss account and balance sheet.ParticularAmount (£)sales350Less: Cost of goods sold 100Gross profit250Less: Rent paid50net profit200Working notesParticularsAmountopening stock0Add: Purchases200Less: closing stock 100Cost of goods sold100Statement of financial positionAssetsAmountLiabilitiesAmountNon-current assetscapital300Motor van150Less : Drawings60Current assetsAdd: net profit 200inventory100440cash240loan250Less : repaid20050Total 490Total490TASK 2a) Maintaining general ledger accounts for PendoSALES ACCOUNTDr.Cr.
(PDF) Introduction to Accounting_6

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