Financial Accounting: Trial Balance, Journal Entries, Ledger Balances, and Financial Statements

This document provides a comprehensive overview of financial accounting, including trial balance, journal entries, ledger balances, and financial statements. It covers topics such as premises, van, fixtures, inventory, cash at bank, cash in hand, receivables, payables, purchases, sales, storage, business rates, motor expenses, salaries, drawings, capital, and suspense account.

FINANCIAL ACCOUNTING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Task 1.1........................................................................................................................................1
Task 1.2........................................................................................................................................1
Task 1.3........................................................................................................................................8
TASK 2............................................................................................................................................9
Task 2.1........................................................................................................................................9
Task 2.2......................................................................................................................................12
Task 2.3......................................................................................................................................13
Task 2.4......................................................................................................................................14
TASK 3..........................................................................................................................................14
Task 3.1 .....................................................................................................................................14
Task 3.2......................................................................................................................................15
Task 3.3 .....................................................................................................................................16
Task 3.4.....................................................................................................................................16
TASK 4..........................................................................................................................................18
Task 4.1 .....................................................................................................................................18
Task 4.2 .....................................................................................................................................18
Task 4.3......................................................................................................................................19
Task 4.4......................................................................................................................................19
CONCLUSION..............................................................................................................................20
REFERENCES..............................................................................................................................22

INTRODUCTION
Financial accounting is the one of the branch of accounting with the purpose of having
record of the financial transactions of organization. This is based on the guidelines set and
includes collecting, summarizing and interpreting the financial information of the business. It
presents the complete report to the stakeholders in a specific format. It is primarily prepared for
external users like stakeholders, owners, lenders, government etc. It is prepared following the
common accounting standards as well as GAAP. In this report, the complete financial accounting
is carried out with respect to scenario given. It includes recording the financial transaction,
preparing trial balance and final accounts as per with principles, conventions & standards given
by accounting board. Also, a bank reconciliation statement is prepared in order to ensure that
entity record & bank records are same and correct.
TASK 1
Task 1.1
Trial Balance as on 31st March 2020.
Trial Balance at 31/3/2020
Account Debit Credit
Premises 340000
Van 51250
Fixtures 8100
Inventory 63900
P Mullen 1400
F Lane 3100
Cash at bank 62400
Cash in Hand 5600
S. Hood 2150
J. Brown 4600
Capital Account 529000
Total 535750 535750
Task 1.2
I
Journal Entries
Date Particulars Debit Credit
01/04/20 Storage Expense 400
To Bank 400
1

02/04/20 Purchases 5000
To S. Hood a/c 1400
To D. Main a/c 2000
To R. Foot a/c 1600
03/04/20 T. Cole a/c 1650
F. Syme a/c 2000
J. Allen a/c 900
F. Lane a/c 750
To Sales a/c 5300
04/04/20 Motor Expenses 470
To Cash 470
07/04/20 Drawings 1500
To Cash 1500
09/04/20 T. Cole 650
J. Allen 1300
To Sales 1950
14/04/20 Van 28500
To Abel Motors 28500
16/04/20 Bank Ac 6500
To P. Mullen a/c 1400
To F. Lane a/c 3100
To F. Syme a/c 2000
22/04/20 Purchases 1800
To D. Main 1800
24/04/20 S. Hood 2150
J. Brown a/c 4600
R. Foot a/c 1400
To Bank 8150
27/04/20 Salaries 4800
To Bank 4800
30/04/20 Business Rates 1320
To Bank 1320
2

31/4/20 Abel Motors 28500
To Bank 28500
Total 94190 94190
Ledger Balances
LEDGER ACCOUNTS
Bank a/c
Date Particular DR(£) Date Particular CR(£)
01/04/20 To bal b/d 62400 01/04/20 Storage 400
16/04/20 P. Mullen 1400 24/04/20 S. Hood 2150
16/04/20 F. Lane 3100 24/04/20 J. Brown 4600
16/04/20 F. Syme 2000 24/04/20 R. Foot 1400
27/04/20 Salaries 4800
30/04/20 Business Rates 1320
30/04/20 Abel Motors 28500
30/04/20 By Bal c/d 25730
68900 68900
Cash a/c
Date Particular DR(£) Date Particular CR(£)
01/04/20 To bal b/d 5600 04/04/20 Motor Expenses 470
07/04/20 Drawings 1500
30/04/20 By Bal c/d 3630
5600 5600
VanDate Particulars DR(£) Date Particulars CR(£)
01/04/20 To bal b/d 51250
14/04/20 To Abel Motors 28500
30/04/20 By Bal c/d 79750
79750 79750
Fixtures
Date Particulars DR(£) Date Particulars CR(£)
01/04/20 To bal b/d 8100
30/04/20 By Bal c/d 8100
8100 8100
3

Capital a/c
Date Particulars DR(£) Date Particulars CR(£)
01/04/20 To bal b/d 529000
30/04/20 By Bal c/d 529000
529000 529000
Purchase a/c
Date Particulars DR(£) Date Particulars CR(£)
02/04/20 To S. Hood 1400
To D Main 2000
To R. Foot 1600
To D. Main 1800
30/04/20 By Bal c/d 6800
6800 6800
P. Mullen
Date Particulars DR(£) Date Particulars CR(£)
01/04/20 To bal b/d 1400 16/04/20 To bank 1400
30/04/20 By Bal c/d 0
1400 1400
Sales a/c
Date Particulars DR(£) Date Particulars CR(£)
03/04/20 T. Cole a/c 1650
03/04/20 F. Syme a/c 2000
03/04/20 J. Allen a/c 900
03/04/20 F. Lane a/c 750
09/04/20 T. Cole a/c 650
30/04/20 To bal c/d 7250 09/04/20 J. Allen a/c 1300
7250 7250
F. Lane
Date Particulars DR(£) Date Particulars CR(£)
01/04/20 To bal b/d 3100 16/04/20 Bank 3100
30/04/20 By Bal c/d 0
4

3100 3100
S. Hood
Date Particulars DR(£) Date Particulars CR(£)
24/04/20 To bank 2150 01/04/20 Bal b/d 2150
02/04/20 Purchases 1400
30/04/20 To bal c/d 1400
3550 3550
J. Brown
Date Particulars DR(£) Date Particulars CR(£)
24/04/20 To bank 4600 01/04/20 Bal b/d 4600
4600 4600
D. Main
Date Particulars DR(£) Date Particulars CR(£)
02/04/20 To Purchases 2000
30/04/20 By Bal c/d 2000
2000 2000
R. Foot
Date Particulars DR(£) Date Particulars CR(£)
24/04/20 To Bank 1400 02/04/20 Purchases 1600
30/04/20 To Bal c/d 200
1600 1600
Storage
Date Particulars DR(£) Date Particulars CR(£)
01/04/20 To bank 400
30/04/20 By Bal c/d 400
400 400
Salaries
Date Particulars DR(£) Date Particulars CR(£)
27/04/20 To bank 4800
30/04/20 By Bal c/d 4800
4800 4800
5

Motor Expenses
Date Particulars DR(£) Date Particulars CR(£)
04/04/20 To Cash 470
30/04/20 By Bal c/d 470
470 470
Business Rates
Date Particulars DR(£) Date Particulars CR(£)
30/04/20 To Bank 1320
30/04/20 By Bal c/d 1320
1320 1320
T, Cole
Date Particulars DR(£) Date Particulars CR(£)
03/04/20 To Sales 1650
09/04/20 To Sales 650
30/04/20 By Bal c/d 2300
2300 2300
J. Allen
Date Particulars DR(£) Date Particulars CR(£)
03/04/20 To Sales 900
09/04/20 To Sales 1300
30/04/20 By Bal c/d 2200
2200 2200
F. Syme
Date Particulars DR(£) Date Particulars CR(£)
03/04/20 To Sales 2000 16/04/20 To bank 2000
2000 2000
Drawings
Date Particulars DR(£) Date Particulars CR(£)
07/04/20 To Cash 1500
30/04/20 By Bal c/d 1500
1500 1500
Abel Motors
6

Date Particulars DR(£) Date Particulars CR(£)
30/04/20 To Bank 28500 14/04/20 Van 28500
28500 28500
Premises
Date Particulars DR(£) Date Particulars CR(£)
30/04/20 To bal b/d 340000
30/04/20 By Bal c/d 340000
340000 340000
II Trial Balance as on 30th April 2020.
Trial balance as at 31/4/2020
Accounts Debit Credit
Premises a/c 340000
Van a/c 79750
Fixtures a/c 8100
Inventory a/c 63900
Cash at Bank a/c 25730
Cash in hand a/c 3630
Receivables
D. Main 2000
T. Cole 2300
J. Allen 2200
Payables
S. Hood 1400
R. Foot 200
Purchases 6800
Sales 7250
Storage 400
Business Rates 1320
Motor Expenses 470
Salaries 4800
Drawings 1500
Capital 529000
Suspense account 5050
Total 542900 542900
III Analysis of transactions for showing the progressions in trial balance.
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The transactions are recorded by company as per double entry system of accounting. The
progressions in the trial balance are seen due to the transactions that are further carried out by
company. It carries out number of transactions every month and trial balance are prepared after
posting these transactions in the general ledger accounts. The transactions are related to sales,
purchases and expenditures incurred by company during the month (Kraemer-Eis and et.al.,
2019). During the company received payment from receivables and also made payments to the
payables. Accounts whose balances are matched are closed and are not presented in trial balance
of next month.
Task 1.3
Applying trial balance figures for showing the respective financial statements.
Trial balance as at 31/4/2020
Accounts Debit Credit
Financial
Statements
Premises a/c 340000 B/ Sheet
Van a/c 79750 B/ Sheet
Fixtures a/c 8100 B/ Sheet
Inventory a/c 63900 B/ Sheet
Cash at Bank a/c 25730 B/ Sheet
Cash in hand a/c 3630 B/ Sheet
Receivables B/ Sheet
D. Main 2000
T. Cole 2300
J. Allen 2200
Payables B/ Sheet
S. Hood 1400
R. Foot 200
Purchases 6800 P /L
Sales 7250 P /L
Storage 400 P /L
Business Rates 1320 P /L
Motor Expenses 470 P /L
Salaries 4800 P /L
Drawings 1500 B/ Sheet
Capital 529000 B/ Sheet
Suspense account 5050 B/ Sheet
Total 542900 542900
8

TASK 2
Task 2.1
Financial Accounting Statements prepared by business entities.
Financial accounting refers to the process of recording transactions carried out by the
business during the given financial year. Every business is required to keep a track record of the
business transactions undertaken by the company during the financial year. The transactions are
recorded by passing a journal entry. From these journals balances are posted in the ledger
accounts by the businesses. After the years end closing balance are posted in the trial balance
from which the balances are transferred in their respective trial balances. The financial statement
represents the summary of overall transactions carried out by the business during the year.
Financial transactions contain the details of company of its performance and position
during the relevant accounting year. Financial statements are prepared by the organisation for
analysing the performance of the business and making strategies for increasing the efficiency for
having effective sustainability in the business. Statements are prepared by the business in
accordance with accounting standards and accounting principles. These financial statements
provide the information regarding internal functioning of company.
Financial statements are prepared by the organisation for giving the stakeholders of the
business information regarding the performance and position of the company. These statements
are prepared to ensure that the financial position of the company is strong and effective.
Financial statements provide important information regarding the business to make effective
controls for the decisions making. This enables the analysts to assess the business for having
effective investments for the investors.
Companies are preparing financial statements prepared by the organisations are mainly
of three types that are profit or loss, balance sheet and the cash flow statement. All these
financial statements are having great importance for organisation (Adhikary and Kutsuna, 2016).
They provide important financial information to the business management and also to the
external users. These information are important for decision making related to the users of
financial statements.
Income Statement
Other name of Income statement is profit or loss statement. They provide information
related to expenditures & income of firm carried out during the year. Income statement represent
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the actual outcomes of carrying out the business during the given specific period. It shows
whether the business was profitable or not for company. This shows ability of the company in
managing the operation from available resources. This is essential for users of the financial
statements to identify the profitability of the business. This gives important platform to the users
for making business decisions (Kapinos, Gurley-Calvez and Kapinos, 2016). Income statements
records each & every transaction that are carried out by business enterprise. Users can identify
clearly the revenues generated from the sales, the cost of goods sold, gross profits, operating
expense, finance cost and many other items. Every user takes up the information as per the needs
from the financial statements. There are number of information related to the business operations
which represents the capabilities of company in competing in market with the challenges of
business environment.
Statement of the financial Position
Statement is prepared by organisations for giving the interested parties idea about the
position of entity and its condition. The balance sheet provides essential informations that is used
by the experts and management for analysing the financial stability as well as business
performance. Balance sheet is an accounting equation where the assets of balance sheet should
always be equal to the liabilities and shareholder's equity. The statement is used by organisations
and other users for identifying how responsibly company is managing its resources and also how
efficiently it is financing them (Robyn and et.al., 2019). Investors analyse the capital structure of
company as it gives important insights for identifying whether sufficient funds are available are
not running the business. The balance sheet represent the assets and liabilities that contains
information regarding the different balances that are presented in the financial statements. The
balance enable the users to make comparisons between the companies for assessing the financial
health of organisations.
Cash Flow statements
Cash flow statement is one of the three financial statements that is prepared by
organisations. It presents the inflow and outflow of cash from the businesses. Cash flows
statements represents the areas where the cash is flowing of company. It contains information
related to the different activities where the cash is flowing among the three activities. Cash flow
statement consists of operating activities that represents the cash flow in business operations and
working capital changes. Investing activities of company represents the flow of cash towards the
10

investments of company their purchases and sales (Haldane, 2016). Financial activities contain
information regarding the issue of shares, debentures, loan repayments dividends and such items.
This helps the users in identifying whether is efficiently utilising its monetary funds for carrying
out its business activities. This helps business in identifying whether it is available with
sufficient funds at the end of year (Ekpo and et.al., 2017). There are cases where the companies
are profitable but are having negative cash flows.
Basis Balance sheet Income statement Trial balance
Structure A balance sheet is
comprises of the
assets, liabilities &
equity. Liabilities
refers to the owing of
company – suppliers,
creditors, tax
authorities,
employees, etc. It
provides details
related to the assets of
company and also it
provides the idea
about the certain
obligations which
needs to meet out by
company and it will
also assist them in
meeting out the
problems of business
(Nyman, 2016).
The income statement
consists of all
revenues and
expenses that has
been faced by firm
during the
transactional period.
In this Gross profit,
COGS, depreciation is
been calculated to
have a proper idea.
Trial balance have
two columns one is of
debit and other is of
credit. In this the trial
balance is been
matched after the
transactions are been
finished.
Purpose The main purpose the
balance sheet is to
Income statement
main purpose is to
The main purpose of
trail balance is to
11

analyse the financial
status. It will help
business in analysing
the business equity.
analyse the profit and
loss, revenue and
expenses that has
been faced by
business
make sure that all
entities are been
effectively managed.
Its purpose is to
maintain the accuracy
of the transactions
held.
Content The main content is to
represent the value of
business.
The income statement
consists of all revenue
and gains.
The content of trial
balance is to ensure all
debit and credit for
given period (Mian
and Sufi, 2018).
Task 2.2
Income statement for Italian Wines for year ended 31 March 2020.
Income Statement on the March 2020
Particulars Amount Amount
Continuing Operations
Revenue from operations 198000
Cost of good sold 100000
Gross Profits 98000
Distribution Cost 14000
Administrative Cost 24500
Salaries and Wages (2000+5500) 7500
Impairment
Property 6000
Motor Vehicle 1000 53000
Operating Profit 45000
Finance Cost 1500
Share of Net profits of joint ventures &
associates 0 1500
Profit Before Income Tax 43500
12

Income Tax Expense 9000
Net Income for Year 34500
Earning per share 0.345
Task 2.3
B/ Sheet for Italian Wines for year ended 31 March 2020.
Statement of Financial Position as at 31st December 2013
ASSETS
Non-current assets
PPE 300000
Accu. Depreciation 9000 291000
Motor Vehicle 10800
Accumulated Depreciation 1800 9000
Intangible assets 0
300000
Current assets
Inventories 14000
Trade receivables 24000
Cash & cash equivalents 22500
60500
TOTAL ASSETS 360500
EQUITY &LIABILITIES
Equity
Share capital 100000
Retained earnings
(78500-
1000)[phone]
Securities Premiums 50000
Revaluation reserve 50000
Total equity 312000
Non-current liabilities
10% Loan Redeemable 2025 15000
Current liabilities
Trade and other payables 21000
Salaries and Wages outstanding 2000
13

Interest on loan outstanding 1500
Current Tax payable 9000
Total current liabilities 33500
Total liabilities 48500
TOTAL EQUITY& LIABILITIES 360500
Task 2.4
Calculation of Ratios
RATIO ANALYSIS
Employed Capital 327000
operating profit 45000
ROCE 13.76%
operating profit / Capital Employed
Cost of Sales 100000
Sales 198000
Gross Margin 49.49%
Total Sales – COGS/Total Sales
Net profit 34500
Sales 198000
Net profit margin ratio 17.42%
Net Income/ Net Sales
Receivables 24000
Revenue 198000
Receivable days 44
Receivable /Revenues * 365
Debt 15000
Equity 312000
Debt equity ratio 4.81%
Debt/ Equity
TASK 3
Task 3.1
Bank Reconciliation
Bank reconciliation and why it is required
14

Bank reconciliation statement is a document that summarizes and matches the cash
balance on the firm's balance sheet to the amount in bank statement. It helps in identifying
whether any accounting changes are required. It is prepared at different intervals to ensure that
cash balance and bank statement matches correctly. It is required because it assists in
maintaining the accurate record of the business transaction. It identifies any discrepancies in the
cash balance and bank statement (Ahmed, 2016). It helps in identifying the problems and issues
before it goes out of hand. It will also help in identifying the administrative problems that needs
attention such as it might require re-evaluating how the cash and account receivable is handled or
demand change in the accounting processes currently in use. It is required to be carried out
monthly. Overall, it helps in identifying the unusual activities.
How bank reconciliation is achieved
The bank reconciliation can be achieved by following the few simple steps. It includes
comparing the deposits with the bank statement, in this the amount of deposit is compared with
the each deposit on the debit side of the bank column of cash book to the credit side of the bank
statement, Second is adjusting the bank statement which includes adding the deposits in transit,
adding or deducting bank errors etc. Third is adjusting the cash account in respect to adding bank
interest or deducting the bank charges and other fees (ODO, 2018). Fourth is Comparing the
balances, in this after adjusting the both bank and cash account, the adjusted amount is required
to be the same but if they are still not equal then the entire process is required to be repeated.
Who will be interested in the outcome of a bank reconciliation
It is beneficial for the businesses in identifying the any hidden charges and expenses that
the business might not be aware of. It also helps businesses in identifying any fraud done by the
company's employee like change in the amount of check, which can be detected through bank
reconciliation (Bank Reconciliation. 2020). Thus, it is mostly useful for the organization and
business owner in effectively managing the business transactions and take timely and accurate
actions.
Task 3.2
Updating the cash book for showing corrected balance.
CASH BOOK
Date Particulars DR(£) Date Particulars CR(£)
01/04/20 To bal b/d 5000
15

02/04/20 Green 5500 02/04/20 Rent – Miller 5000
05/04/20 Spencer Ltd 2500 08/04/20
Interest on
Debenture 2500
09/04/20 Cash 1500 15/04/20 PC World 6000
14/04/20 Capital – Jack 5000 20/04/20 Electricity 1800
20/04/20
Insurance
Claim 15000 21/04/20
Loan
Repayment 9200
25/04/20 Cash 8000 23/04/20 Legal Fees 4100
28/04/20 North Wings 5000 29/04/20 Salary :
30/04/20 Legal Fees 100 Amber 2000
Oshun 2500
Baker 2800
30/04/20 Bank Charges 100
30/04/20
Green (Cheque
Dishonoured ) 5500
30/04/20 Bal c/d 6100
47600 47600
Task 3.3
Preparation of Bank Reconciliation Statements for Texas Traders as on 30th April.
Bank Reconciliation Statement
Particulars Amount
Balance as per cash book 6100
Add :
Cheques issued not cleared
Amber 2000
Baker 2800 4800
Less :
Direct debit for gas 250
Cheques deposited not cleared 5000 5250
Balance as per bank book 5650
Task 3.4
Demonstrating use of :
a) Deposit in Transit
16

Deposits in transit refers to the amount already recorded and received by company, but
are yet to be recorded by banks. Deposit in transits are included in the cash account of company
and there is no requirement of adjusting the records of company. Deposit in transits in are not
recorded over the bank statements. They are listed on bank reconciliation as increase to balance
as per bank for reporting true cash amount. Deposit in transits are also referred as the
outstanding deposits are the deposits which are not correctly reflected in bank statements on date
of reconciliation date because of time lag between the company depositing the cheque or cash in
the account & when bank gives it on credit (Zherlitsyn and Kravchenko, 2016). Since increase in
bank account are recorded by company at the earliest when cheques or cash are deposited.
Balance of bank statement will be lower from the balance of cash book until deposits are
processed by bank. Outstanding deposits are required to be subtracted from balance of cash book
in reconciliation statements.
b) Outstanding Cheques
Outstanding cheques are the cheques which are recorded and written in cash account of
company but are not cleared by the bank accounts. Cheques that are written in the last days of
month and few old cheques are also included in outstanding cheques. Every cheque that has been
written by company are recorded immediately in cash account of company, as there is no
requirement of adjusting the record of company for outstanding cheques. These outstanding
cheques have not reached bank and are therefore not recorded in bank statements. Due to this
reason outstanding cheques are stated on bank reconciliation statements as the decrease in
balance as per bank. Outstanding cheque remains liability of payer until the time cheque is
presented by payee for the payment that eliminates liability. In case cheque is never presented by
the payee for payment payer could mark cheques as void in the accounting systems that are
usually marks original account payables as unpaid. Company will also increase balances in cash
account by amount of outstanding cheques which are now void. If the payee receives cheques but
do not present them for the payment on once, there are risks that payer would close bank
accounts on which cheques were drawn. Payee will be required to receive replacement payments
from payer.
c) Not Sufficient funds check when applying reconciliation process.
Not Sufficient funds (NSF) is term used for describing cheque which is returned by bank
on which that was drawn due to checking account balances were less than amount of cheques
17

(Block and et.al., 2018). Cheque that is recorded as NSF or the insufficient funds are also known
as returned cheque, return item, cheques bounced or the rubber cheques as they were bounced
back by bank to payee on whom cheques were drawn. Cheques that are returned due to not
having sufficient funds results in banks charge for payee and person who has written the cheque.
Cheques returned as NSF could be indication for that financial conditions of maker of cheque
had declined. It could be signal of potential credits loss if cheque maker is customer to whom
credit is extended on the purchases.
TASK 4
Task 4.1
Total Debtors Balances
Journal Entries
Suspense account 9000
To Customer 9000
Customer 250
To Delivery payment 250
Sales Day Book 1600
To Suspense 1600
Debtor Control Account 6800
To Suspense 6800
Sales ledger control account 8200
To Purchases ledger control
account 8200
Task 4.2
Statements of Reconciliation of Sales with the balances in the Debtors Control Account.
Debtors Control account
Date Particulars DR(£) Date Particulars CR(£)
01/04/20 Balance b/d 276800
30/04/20
Debtors
(SDB) 9000
Bank 6800 Sales 1600
18

30/04/20
By balance
b/d 273000
283600 283600
Reconciliation statement.
Reconciliation of Sales Ledger with Debtor Control Account
Balances of sales 176800
Adjustment of errors 3800
Revised Total agreeing with control account 173000
Task 4.3
Redrafting Trial Balance creating a suspense account.
Trial Balance
Accounts Debit Credit
Capital a/c 6000
Sales a/c 25300
Salaries a/c 3500
Purchases a/c 12500
Discount Received a/c 250
Discount allowed a/c 700
Computer a/c 3000
Returns Inward a/c 300
Rent & Rates a/c 900
Stock a/c 4000
Bank Overdraft a/c 1600
General Expenses a/c 1500
Fittings a/c 2500
Provision of Bad debts a/c 200
Accumulated deprecation a/c 250
Debtors a/c 2500
Creditors 1500
Suspense account 3700
Total 35100 35100
Task 4.4
Rectification Journal Entries and accounts prepared for reconciliation.
Journal Entries
Particulars Debit Credit
19

Discount allowed 200
To Suspense 200
James 1500
To Suspense 1500
John Steels 1000
To Suspense 1000
Capital 1000
To Suspense 1000
Suspense account has been created for the reconciliation of errors and omissions.
Suspense account
Date Particulars DR(£) Date Particulars CR(£)
30/04/20
Discount
allowed 200
30/04/20
Difference in
books 3700 30/04/20 James 1500
30/04/20 John Steels 1000
30/04/20 Capital Account 1000
3700 3700
There are different types of accounts that are created by organisation for recording their
transactions. Companies prepare general accounts and control accounts. Companies are required
to reconcile these accounts for ensuring the balance as per ledger account is matching the
balances of control account. Company reconciles so that all the errors and adjustments are
properly recorded and adjusted by company related to the concerned accounts (Osano and
Languitone, 2016). Different types of account prepared by companies are sales ledger, purchases
ledger, debtor control account, creditor control account and many more.
CONCLUSION
Financial accounting has significant importance n the business. it enables the company to
have proper record of all the transactions that are carried out during the financial year. financial
accounting provides the business with the important information regarding the business for
decisions making. Financial prepared by the company provides the external parties to assess the
20

performance and position of the company.
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ODO, J. O., 2018. NATURE OF ACCOUNTING, BANK RECONCILIATION STATEMENT
(FUNDAMENTALS OF ACCOUNTING).
Kraemer-Eis, H. and et.al., 2019. European Small Business Finance Outlook: December
2019 (No. 2019/61). EIF working paper.
Bendell, J. and Doyle, I., 2017. Healing capitalism: five years in the life of business, finance and
corporate responsibility. Routledge.
Connolly, E. and Jackman, B., 2017. The Availability of Business Finance. RBA Bulletin,
December. pp.55-66.
Adhikary, B. and Kutsuna, K., 2016. Small Business Finance in Bangladesh:
Can'Crowdfunding'Be an Alternative?. Review of Integrative Business and Economics
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Bank Reconciliation. 2020. [Online]. Available
Through:<https://www.accountingcoach.com/bank-reconciliation/explanation>.
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