Financial Accounting Statement: Comparison of Different Financial Statements

BO8706
FINANCIAL
ACCOUNTING

Table of Contents
INTRODUCTION:..........................................................................................................................3
Task 1.1............................................................................................................................................3
Task 1.2............................................................................................................................................4
Task 2.1............................................................................................................................................8
Task 2.2............................................................................................................................................9
Task 2.3..........................................................................................................................................10
Task 2.4..........................................................................................................................................10
Task 3.1..........................................................................................................................................12
Task 3.2..........................................................................................................................................12
Task 3.3..........................................................................................................................................13
Task 3.4..........................................................................................................................................13
Task 4.1..........................................................................................................................................14
Task 4.2..........................................................................................................................................14
Task 4.3..........................................................................................................................................14
Task 4.4..........................................................................................................................................15
CONCLUSION..............................................................................................................................17
REFERENCES..............................................................................................................................18

INTRODUCTION:
In this project different accounting principles discussed; to know financial positions of the firm,
company requires to calculate income statement and balance sheet. There are many ratio’s which
helps investors understanding current performance of the company, these are capital gearing
ratios, gross profit margin, net profit margin, return on capital employeed and debtors turnover
ratio. Book keeping is the process of double entry in which one transaction effects multiple
transactions, these effects are shown through doing calculations for Catherine who is sole
proprietor. Different questions and problems done in this project report extract different
accounting concepts. Task 1 covers concept of double book keeping, ledger and trial balance.
Task 2 covers Income statement and financial positions showing statement and some ratios
which help investors or stakeholders know about various companies’ financial performance.
Task 3 covers bank reconciliation statement, why difference occurs and how to rectify it. At last
comes Task 4 which covers importance of suspense account in trial balance and how to rectify it
through proper journal entries; debtors control account and sales reconciliation helps in rectify
error due to wrong entries in sales ledger and debtor’s ledger.
Task 1.1
Trial balance: All two pass books know and believe that prove error by all contradictions.
Ledger: An accounting is a record or chart used to store accounting sections for activity reports
and salary statement exchanges. The journal section of the accounting list may include records
such as cash, receivables, profitability, stocks, creditor liabilities, accruals and stocks.
Trial balance as on 31st March, 2020:
Trial balance as on 31st March, 2020
S.No
. Particulars
L/
F Debit (£)
Credit
(£)
1 Premises 340000
2 Van 51250
3 Fixtures 8100
4 Inventory 63900
5 Receivables 4500
6 Cash at bank 62400
7 Cash in hand 5600

8 Payables 8750
9 Owner's Capital 527000
Total 535750 535750
So, the balancing figure which is owner’s capital shows the balance of £8750 pounds.
Task 1.2
I. Ledgers:
Storage cost a/c for the year ending 30th April, 2020
Particulars Debit (£) Particulars Credit (£)
To bank a/c 400 By balance c/d 400
400 400
Purchases a/c for the year ending 30th April, 2020
Particulars Debit (£) Particulars Credit (£)
To S. HOOD 1400
To D. MAIN 2000
To R. FOOT 1600
To D. Main 1800 By balance c/d 6800
6800 6800
Sales a/c for the year ending 30th April, 2020
Particulars Debit (£) Particulars Credit (£)
By T. Cole 1650
By F. Syme 2000
By J. Allen 900
By F. Lane 750
By T. Cole 650
To balance c/d 7250 By J. Allen 1300
7250 7250
Motor expenses a/c for the year ending 30th April, 2020
Particulars Debit (£) Particulars Credit (£)
To cash 470 By bal c/d 470
470 470