Concepts of the Accounting Techniques

Financial Accounting

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
A. Reporting the accounting regulations for firm to the Line manager.................................1
1 Describing the financial accounting....................................................................................1
2 Analysing the financial accounting regulations..................................................................2
3 Determining the principles and necessary rules for accounting..........................................3
4 Explaining the concepts relevant to the material disclosure as well as consistency...........4
CLIENT 1........................................................................................................................................4
1. Preparing the Journal account for Client 1 for the date 1st May 2017...............................5
2. Ledger accounts of all the Journal entries..........................................................................7
3 Trail balance for client 1....................................................................................................16
M1 Analysing purchase and sale transactions to compile a trial balance............................16
D1 Presenting the accurate trail balance in consideration of accounting principles............17
CLIENT 2......................................................................................................................................17
A Profit and loss statement for Peter Piper for the year 31st December 2017.....................17
b Presenting the balance sheet for Peter Piper for the period 31st December 2017.............18
CLIENT 3......................................................................................................................................19
A Income statement for Raintree Ltd for the period 30th September 2017.........................19
b. Financial position of Raintree Ltd....................................................................................20
c Determining principles and concepts of accounting..........................................................25
C Analysing the importance of measuring and presenting depreciation in the financials of
business as well as describing the two methods for business...............................................26
M2 Analysing the P&L, balance sheet and cash flow statements........................................26
D2 Application of the accurate calculations in construction of the final accounts..............26
CLIENT 4......................................................................................................................................27
A Purpose behind preparing the bank statement..................................................................27
B Determining the causes of recording such bank statements or records............................27
C Cash books for the client..................................................................................................27
M3 Application of the reconciliation process and demonstrating various terms.................28
D3 Preparation of BRS in consideration of accounting tools and techniques......................28

CLIENT 5......................................................................................................................................29
A Preparing the sales and purchase ledger account for Henderson for the period May 201729
b Evaluating the term Control account.................................................................................29
CLIENT 6......................................................................................................................................30
A Suspense account and its main features............................................................................30
b. Presenting the trail balance...............................................................................................30
c Journal entries....................................................................................................................30
d Determining the difference between Clearing and suspense account...............................31
M4 Types of accounts and construction of reconciliation....................................................31
D4 Producing the adequate accounting methods..................................................................31
CONCLUSION..............................................................................................................................32
REFERENCES..............................................................................................................................33
BIBLIOGRAPHY..........................................................................................................................35

INTRODUCTION
In the current scenario there has been use of various accounting principles rules and
regulation which in turn are beneficial for industry or organisation in analysing the adequate
requirement of funds to perform the business activities. Thus, in the present assessments there
will be study based on various principles concepts of financial accounting as well as presentation
of various accounts which are helping various clients to fetch the essential informations and
validate them to make favourable decisions. However, such analysis will be beneficial for
analysing the profitability of the firm through various financial statements such as income
statements, balance sheets, cash flow statements as well as adequate analysis of the operational
tasks.
A. Reporting the accounting regulations for firm to the Line manager
To: Line Manager
From: Junior accountant
Subject: Implication of the accounting terms as well as awareness which are relevant with such
accounting regulations.
Sir,
In order to improve the transactional activities of the business there is need to analyse
the usage, rules, regulations and methods of various accounting principles. Thus, such
accounting techniques will help the organisation in making appropriate improvements in the
business operations as well as make the adequate transactional activities (Robson, Young and
Power, 2017). However, there has been use of various accounting techniques which in turn
helps the business in making the fruitful plans for budgeting, forecasting and costs allocations
over various operational tasks of the business.
1 Describing the financial accounting
In consideration with financial analysing the company's accounts which in turn helps in
improving the investments, capital structure or the business operations of the firm in the long
run. However, with the help of such techniques organisations will help in building the
appropriate reputation in the current environment. Thus, there will be preparation for financial
statements such as income statements, balance sheet as well as stakeholder analysis for firm.
Hence, the motive behind such operational activity is that they help in enhancing the
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profitability, productivity as well as presenting the appropriate disclosure of such financials in
the market thereby it helps in gathering the large numbers of stakeholders.
Illustration 1: Kinds of financial statements
Source :(Zeff, 2016)
However, there has been various kinds of financial accounting which in turn helps in
presenting the financials of the business. Hence, such informations are to be used by External
stakeholders of the firm such as Shareholders, governmental departments as well as various
financial institutions like banks thereby analyse the annual turnover, taxation paid by the
government as well as the improvements in organisational growth.
2 Analysing the financial accounting regulations
There has been various operational activities in the business so the record of each and
every transaction is the prime requirements of the organisation. Thus, financial accounting is
consists of various rules and regulations which in turn helps in providing the legal framework of
the accounting. Hence, UK's corporate reporting and governance regulator has facilitated FRC1
which in turn regulates the financial reporting disclosure of the government departments, units
and various corporates (Regulation in Financial accounting, 2017). It helps in facilitating the
auditing of such accounts as well as improve the trade and business in the national economy.
However, there has been various regulations which are executing the universally accepted legal
framework of presenting the dataset such as:
FRC: In consideration with such accounting standard which are constituted for
monitoring and executing the financial disclosures made by various corporations of UK to
promote the high quality governance (Financial Reporting Council, 2017).
1 Financial Reporting Council
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IASB2: The main motive of such board is to facilitate the adequate information and
guidelines to accounting professionals in context with preparing financial data base as well as
facilitate appropriate disclosure of such accounts. Thus, such legal framework has set the
criteria of financial disclosure which is worldwide accepted format and helps the organisation in
attracting the international investors (Loughran and McDonald, 2016).
IFRS: There has been informations and framework which are relevant with making the
disclosure of such financial statements that are helpful for the business in attracting the large
numbers of investors and it helps in making the beneficial estimation of the costs and the
relevant expense incurred in the operational activities.
3 Determining the principles and necessary rules for accounting
There has been various principles and concepts which are being facilitated by GAAP in
order to bring the logically accepted guidelines to the framework of accounting techniques used
by various organisation (Accounting Principles, 2017). However, there has been various
accounting principles which helps in providing the fruitful guidance to accounting
professionals, some of them are described below:
Monetary unit assumption: In consideration with making the business transactions
which are need to be in the US dollar cause this currency is universally accepted and have the
stable rate with fewer fluctuations (Dung, 2016).
Economic assumptions: There has been golden rule that consists of the rule that tall the
entity or firms which are operating in the market and having the revenue through trade practices
can be denoted as the septate legal entity and they have their own legal identity as well as
denoted as a person itself.
Cost principle: this are the techniques which is beneficial of the organisational
professionals in analysing the requirements of the costs that are known as the amount spent over
the operational activities. Hence, such costs or expense are to be budgeted and to be appropriate
to meet the trade requirements.
Full disclosure principles: This concept lies on the rule that during the financial year
the business keeps all the records of various transactions of different departments or units of the
2 International Accounting Standard Board
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organisation must be audited, complied as well as present the single statement of balances.
Hence, it can be said that all the accounts of the business must be disclosed at the end of such
financial period. There must be disclosure of the income statements, financial position and cash
flow statements of very operating firm.
Going concern Principles: This principle lies over the concept that all the company
which are performing in business will have the adequate growth as well as make the fruitful
disclosure of the accounts. Hence, which are need to be on the going or regular process
(Damodaran, 2016).
Materiality: There has been use of various financial data which are need to have the
authenticated sources as well as make the efforts in facilitating the relevant material.
4 Explaining the concepts relevant to the material disclosure as well as consistency
In terms with the conventions or concepts of the financial accounting there has been
various terms such as full disclosure, consistency, conservatism convention and materiality
(Grant, 2016). In order to understand the concepts being such principles there is need to make
the adequate disclosure of such accounts as well as understating these two concepts such as:
Consistency: This principle follows the nature that the organisation which has started
making trade practices in the market. It can be said that such business operations will have the
adequate consistency and have the fruitful profitability. Thus, it will be helpful for the firm in
gathering the profitable returns for the long period and facilitating the managers with adequate
operational outcomes.
Material disclosure: The disclosure of the financial accounts which are consists of
various material such as items are need to be monitored by the business professionals in context
with analysing the profitability and efficiency of the organisation in meeting such targets (Dutta
and Patatoukas, 2016).
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CLIENT 1
The present case study is relevant with the case of Alexandra where the various financial
balances are provided by client in context with measuring the Journals Ledger and trial balance
account of such financials.
1. Preparing the Journal account for Client 1 for the date 1st May 2017
In Order to present the disclosure of journal entries there is need to analyse the income
statement and the balance sheet presented by Alexandra for the period of may 2017. Hence, such
accounting techniques helps in recording all the transactions held in such period and thereby
facilitate the summarized transactional data set.
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