Financial Accounting Assignment Solution (docs)

Added on - 22 Nov 2020

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Financial AccountingPart 1
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1P1 Applying double entry book keeping system to record transactions.....................................1P2 Producing trail balance..........................................................................................................6TASK 2............................................................................................................................................7P3 Preparing final accounts by adjusting accruals and prepayments..........................................7P4 Producing final accounts for sole trader and company..........................................................8CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14.......................................................................................................................................................14
INTRODUCTIONFinancial accounting is a system of recording and analysing all financial transactions inaccounting statements and books. The main aim of this project report is to build anunderstanding about framework of financial statements and their applications. As a junioraccountant in TaxAssist Accountants which is a small accountancy firm, various financialstatements are prepared and analysed. Double book keeping system is discussed in detail alongwith trial balance of the giventransactions. In order to develop final accounts, income statementsand balance sheets of two business structures that is company and sole proprietorship areprepared.TASK 1P1 Applying double entry book keeping system to record transactionsBook keeping is a process of recording all the transactions in accounting statements andbooks in order to record them so that they can be accessible whenever they is any requirement.These transactions can be recorded using various methods and one of the most used andbeneficial method of book keeping is double entry. Under double entry book keeping system alltransactions are recorded using two sides that is debit and credit. This method is considered as astandard due to which all business firms has to follow it except for small firms. This concept ofdouble entry is based on the fact that every transaction will impact on at least two accounts. Twoelements of this system are debit and credit. Debit is an entry which is recorded at left side of anaccount and credit is a transaction which is transacted at right side of an account. In order tofulfil the requirements of this system both of these sides must be equal. Using this method,journal entries and ledger accounts of Muhammad's business are developed which are mentionedbelow:Journal entries –This is the first step in the process of financial accounting and is usedto record all transactions and events of a business organisation. All transactions are firstidentified and the analysed in order to ascertain their impact on accounts. Journal entries usingspecific format are developed below:1
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