Financial Accounting Research Paper

This assignment involves a critical review of scholarly articles related to financial accounting. Students are expected to analyze diverse perspectives on the topic, covering areas like the history of financial accounting, its role in different industries (government, nonprofit, manufacturing), and emerging trends such as the influence of carbon markets and environmental regulations. The assignment emphasizes research skills, analytical thinking, and the ability to synthesize information from various sources.

FINANCIAL ACCOUNTING

INTRODUCTION
The criteria and department of the accounting under which all kinds of the financial and
monetary transactions are to be recorded as well as analysed is identified as the financial
accounting. When the business entity going to assess that company and business entity
performing in which manner such as declining or upward then the financial accounting is the
most helpful criteria for this condition. An entrepreneur when want to check that whether the
financial and profitability position of the company growing or not in the industry then use such
mentioned branch. Apart from this, by considering the financial accounting process the
management able to make the different types of the financial reports and accounts like as income
statement, balance sheet, cash flow etc. In addition to this, all the disclosures and theories,
standards etc. of the accounting are to be analysed and while making the accounts of the
financial (Weil, Schipper and Francis, 2013). The current project is based on the different
number of the accounts from initial or start to end of the financial statements. On the basis of the
present report the reader able to know formate and process to prepare journal entries, trial
balance, ledger account, profit and loss accounts, statement of financial position etc. by
considering such all the statements the management of business organisation able to make the
strategies for the further and next financial periods to make the company healthier in for of the
profitability. In addition to this, about the two types of depreciation techniques, suspense and
clearing account etc. also explained in the current case study. Apart from this, the report shows
about the BRS which states for the bank reconciliation statement used by the companies for
assessing various financial data and conditions in the segment where it existed and operating.
Financial accountancy is the record of accountancy preoccupied with the compact and analysis
and reporting of financial transaction concern to a enterprise.
When make financial statement ,they necessary follows points:-
 Relevance:- Financial accounting which is mind particular.it is very important for
preparation of financial accounting statement of the organization for information to
determiner decisions. Unless this evidence is present ,there is no point in disorderliness
statement.
 Materiality :- materiality is important for reparation of fiscal statement in the
organization because information is materiality if its mistake or statement could
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determiner the economical decisions of exploiter confiscate on the basis of the financial
statement.
 Reliability:- accounting essential be self-governing from important mistake or bias. It
should be easy relied upon by managers. Often message that is extremely applicable.
 Understand-ability:- financial accounting written report should be ununderstood by
those to whom the content.
 Comparability :-- financial reports from different time period should be compare with
one some other in command to conclude meaningful assumption about the tendency in an
entity fiscal presentation and perspective over time.
this point are very important for preparation of correct and valuable financial statement for the
organization.
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CLIENT 1
a) Select Book entry
1. Representation journal entries and calculation of proprietor assets
A. Preparing the account book of Select Entry
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b) Complete double entry recording
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Draw trial balance
Client 2
a. Preparing income statement of an entity:-
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b. Preparation of Financial statement:-
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CLIENT 3
a. Preparing income statement for Rain tree Ltd.
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b. Statement of financial position of Rain tree Ltd
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C. Justify two concepts of accounting such as consistency and prudence
In the accounting and financials aspect there are several number of the concepts comes
under which are followed by the companies in order to fill books of accounts and make the
financial statements. When the company not able to follow different kinds of the concepts and
aspects of the accounting then in the proper and appropriate manner cannot prepare the financial
statements and determine all kinds of the data and performance (Edwards, 2013). In the
accounting there are mainly two types of the principles or concepts are to be used which are like
as consistency and prudence. Furthermore, both the concepts which rely under the accounting
process are such as follows:
Consistency Concept
Consistency means adopts a one principle for rules in the organization for long time of
period and follow the system by all company's employee on the regular basis. Only modification
an accounting principle or method if the new technology or version than the company adopts
new version for improvement in financial results. Then the organization adopts new technology
for profit maximization or success of company in this competitive market environment. In other
Consistency means to use a particular and specific kind of the aspect and principle on the
continuous basis in the one kind of the criteria. On the basis of this concept the company needs
to used one method and technique for the continuously in the company and there are cannot
make changes in the systems. Once the business and accounting manager adopt and follow one
kind of the accounting principle as well as treatment method then for the further and all the fiscal
periods he must apply and adopt respective type of the system in the entity. There are not any
chance and option for him to use and follow other type of the accounting principle until and
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unless feature and aspects of the principle become changes. Apart from adopt only one method
on the continuously basis, in case there are the principle become changes and occurs any kind of
modification then has to make changes in the accounting treatments for preparing the financial
statements (Consistency Concept, 2013). The consistency concept and principle of the
accounting is very important and significant for the business entity because of making the
comparison between previous as well as current. On the basis of such aspect the analysers and
stakeholders like as employees, stockholders, customers etc. also capable to assess the position
and compare from the previous financial performance. Consistency concepts is very important
concept for company because every organization more concern for customers stakeholders or
employee through this accounting concepts because the consistency concept helpful for
organization it is regular method than every user have knowledge about this concept and they are
working on this concepts. Ultimately decision making capacity improves up to the better and
effectual manner of all the stakeholders.
For instance: A business organization using the particular method for assessing
valuation of the stock and inventory available in the firm is such as last in first out method
(LIFO) and adopt the consistency concept for preparing the accounts of stock. Due to using such
concept it must follow same method of stock valuation over the each and every accounting
period to analyses the final value of the stock. Apart from this, in the every year the stock which
produce has to sale in the market at initially and the go for selling old inventory and products to
the customers. Last in first out method is good and beneficial method for every organization
because company have knowledge about stock inventory and company covers last stock
inventory in first because of reduce the problems of dad stock and it is beneficial for the
company.
Prudence Concept
Apart from the consistency concept, there are prudence concept is also one of the widely
used by the companies in order to make reserve in the company which lead to meet the criteria
occurs suddenly. In short, it can be said that prudence concept is helps to the company for
meeting the contingency situation as well as make the appropriate solutions at the time of
problems arises in at the sudden time at the workplace. Moreover, by making the accounting
treatments for resolving the contingency situation the management become more efficient which
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because of eliminating the problem which can be comes into consideration at the working
environment on the suddenly (Horngren and et.al., 2012). In addition to this, for keeping the
records of reserve amount to control and resolve the sudden situation there are prudence concept
of accounting is to adopted while preparing the financial statements. Adoption of this concept
than company remove all business trade barrier for running successful business in this
competitive working Environment and for gaining good profit from market or use for customers
retention and new customers attraction for organization.
For example: In the company there are bad debts are often occurs because some clients
or customers purchase the products and services but not able to pay the proper amount of the
product bought. In this case, for create the specific kind of the account such as contra account is
to be made in which the accounts receivables are to be recorded. For this kind of the accounting
treatment there are prudence is to be used which can be on the consistent basis or as per the
understanding of the manager.
D) Explaining two ways of deprecation in the accounting
Deprecation is the concept which shows the value of scrape over the each and every
financial assets which comes under the long term and fixed assets like as plant, machinery,
property, equipment etc. Higher the cost of the assets lead to incur more amount of the
deprecation on the specific kind of the assets which is available within the workplace of the
company. The amount of deprecation is to be incur as well as deduct from the initial cost of the
assets because of the taxation and different accounting purposes. There are mainly two methods
adopted by the businesses for calculate amount of the depreciation which are like as straight line
method (SLM), as well as the written down method (WDM) (Freeman and et.al., 2014). Apart
from this, to determine value of the depreciation on the non current assets there are specific
formula is to be used in the general which is given as below:
Depreciation = Cost of asset – scrape value of asset / estimated life of asset or equipment
Both the methods like as WDM and SLM are explained and described as below:
Straight Line Method-
In the SLM method of the depreciation of assets there are depreciate amount is to be used
and deducted in the books of account same over the each and every financial year. Every
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company which operates in the industry use the amount of depreciation on the fixed assets which
helps to determine that at the end of year there are how much costing remains with the firm.
Moreover, it able to take decisions that whether the fixed assets needs to sale after some year or
replace it or make expense for maintaining it. Here the amount which assessed in form of the
depreciation is shown in the same amount in the financial accounts of profit and loss which is
one kind of indirect expense for an entity. The current method of depreciation is very easy as
well as simple for calculate within the accounting process and due to such factor the accounting
manager adopt SLM method (Lovell and et.al., 2013). Apart from such things, sometimes there
are more amount and value of the depreciation incur while using the method of SLM in the firm.
In other words with the help of this method company's save more money form deprecation of
assets in future management analyses the actual value of machinery or other assets at present
time for future .With the help of such method the management not need to put more effort
because of simple and easy calcualtion. Further, formula of SLM is such as follows:
Depreciation: SLM = Amount of the depreciable on assets / Useful life of the assets
Depreciable value = cost – salvage value
For example: 250000 – 50000 / 8 years = 25000 GBP
At the cost of 250000 GBP value of the scrape of equipment is 50000 GBP in which
expected life of the machine is 8 years. On the basis of the SLM method depreciation amount is
worth of 25000 GBP which will be carried forward same in the books of account up to the 8
financial years.
Written Down Method-
Another method of the depreciation is such as the written down under which amount of
the decipherable changes over the period of each and every financial years and shows different
amount in the books of profit and loss account. In this the sum of money of the depreciation
which is one of kind of indirect expense for the firm is reduces over the years of fiscal. In this
method,company reduce the all indirect expense for the financial year covers the other
expenditure from the cost of asset or equipment there are percentage of the depreciation are to be
deducted. The amount which remains after deducting depreciation from cost in the first year that
will be consider for the next year (Narayanaswamy, 2014). For example: if the company follow
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WDM where percentage of the depreciation is such as 20% and cost of the machine is like as
300000 GBP. In this case, for the first and more years depreciation amount will be such as
follows:
First year = 300000 * 20% = 60000 GBP
For second year cost of machine will 300000 – 60000 = 240000 and depreciation will be
such as below:
Second year = 240000 * 20% = 48000 GBP
Cost of third year will be 240000 – 48000 = 192000 GBP and amount of depreciation is:
Third year = 192000 * 20% = 38400 GBP.
Up to the expected life of the machine same criteria will be consider by the company.
CLIENT 4
a. Describing doubt account along with its chief characteristic:-
Suspense account that part of an organization printing where it records its uncategorised debits
and credit. This account temporarily acquisitive these unclassified transaction while the
Organization makes judgement about their collection.
Doubtful account is created by an entity owner which is regard as one of the centre thought in the
accounting that helps to correct fault or exclude that takes places in the business activity. It can
be said that this kind of account is come into existence for the temporary purpose in order to
handle all kinds of competitors faced by an entity in its business. Future complexities will be
determined by an individual in the initial phase as this is attentiveness as one of the essential
formulation to be considered aside an entity individual in order of magnitude to improve its
existing business nature. Accounting errors will be ascertained by an entity proprietor that will
improves the existing
Need of doubt account is raised with the increase in complexness of the business
activities that in turn affects the complete business firm's display in a particular time . Main goal
of the enterprise is to accomplish all its desired goal and the subjective by identifying all the
errors or frauds at the initial stage as improving its performance initially will be helpful for an
entity in order to improve the quality of transactions to be recorded in the financial statement's
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(Lovell, 2014). True formation is essential to e included in the financial statement as this will
reflect true image of the business concern in front of the external market users. Suspense account
terminology is used in accounting refers to recording all debit and credit transactions in the
existing accounting records to influence the actual fiscal perspective of an entity. This charitable
of account is make by an entity in their business for transitory purpose element this suspenseful
account unt is just created in state to meet the external difficulties imposed on an entity for
limited span of time. The suspense account is used in the accounting records generally in the
general ledger in the books of accounts to improve the overall efficiency of all the transactions
recorded in the existing books of accounts as its desired aim is to capture higher market share by
reflect true image of an entity. Value of suspense report affects the functioning and success of an
organisation and also the firm is not able to fulfil its aims. It is helpful for analysis of financial
point of the organization on different areas and covers all the debts burden and credit transaction
of an organisation. Determine the financial position of the organization or other external source
covers through the Doubt account for compete with other market leaders for running the business
and reduce all internal or external expenditure of the organization and with the help of doubt
account company reduce the trade barriers at te of international.
From the perspective business the meaning of this suspense account gets changes as
external market changes will be take into consideration by an entity in order to present its true
image in front of external market users. Suspense account will be helpful for an entity in order to
considered all kinds of accounting errors takes paces in an entity (Cuckston, 2013). There are
different kinds of errors incurred in the business such as error of omission in which the
intentional mistake of accountant a particular transaction omitted to be recorded in the books of
accounts. The accounting process has a connected link with the existing performance of an entity
as this will help in ascertaining the financial performance of the business concern. Function of an
entity acquire flexure with the transition of time as in this particular case quality of all the
business transactions in which each and every transactions to be considered by an entity owner.
Temporary nature of this particular account alert the top management in ensuring its overall
business performance. Quality of all accounting transactions will get improved as the desired aim
of the business enterprise is to gain higher competitive advantage in the external business
environment. This particular method is attentiveness as one of the of the essence formulation that
will be exploited by the business concern in order of magnitude to consider each and every
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factors lies in the external business environment to represent its true image in front of the
stakeholders as investors will rely upon the annular financial statement's of an entity in a
particular financial year. The doubt account can be comparison with the rectification of errors
that is attentiveness as the of the essence conception in the accounting concept (Watrin, Pott and
Ullmann, 2012). In this particulate approach, all actual treatment in the accounting records are
compared with the wrong treatment made by an entity in order to ascertain all the errors found
by the investigator in the books of accounts of the business entity. Business efficiency will be
ascertained with the help of this particular approach that enhances the overall quality of an entity
in order to target higher users of the external business environment.
CLIENT 5
a. Explaining bank reconciliation statement
Nowadays frauds ad errors has become on of the important business issue that needs to
be ascertained by an individual in the initial stage in order to protect its overall brand image.
Bank reconciliation statement is regarded as the monitoring tool in which existing
performance of the firm will e compared with the bank statement in order to know the different
lies between actual cash book and bank pass to now the material misstatements. This kind of
statements are prepared in every entity as it reveals the shortfalls lies in the actual business
enterprise n order to improve the existing performance of the corporation in both manner such as
qualitative as well as quantitative performance of the business entity. This is act like a
comparison tool in which actual business performance will be compared with the bank balance
of an entity (Biondi and et.al., 2012). It is regarded as the process that shows the difference
between cash balance of bank and organization which will assistance an entity in state to focus
on desired goal and mark of the business concern entity to be completed within a given span of
time. All kinds of deposits whether cash or any other kinds of deposits in the business will be
analyses properly in relation to the external market aims and targets to be accomplished in a
given time period.
It contains all kinds of transactions incurred in an entity that involves all types of cheques
written by an entity owner for the purpose of dealing various operations of a business are
checked in accordance with the dates mentioned on the cheque. Series wise cheque is record is
mentioned in the books of accounts in dictation to determine the actual financial presentation of
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an entity with the transition of time in order to get actual business performance within a given
span of time. All the transactions incurred in an entity are properly checked with the similar
vouchers of all the transactions incurred in the business enterprise. The true meaning of bank
reconciliation statement is that bank balance will be matched with the cash balance by knowing
all the transaction's efficiency incurred in an entity. Various review procedures are used aside an
entity businessman in order to analyze all the transactions incurred in the organization enterprise
(Carvalho and Salotti, 2012). This kind of message prepared by an entity will be helpful for an
enterprise owner in order to collect relevant information by analyzing the bank reconciliation
statement's as this will generate all actual transactions incurred in the business to be rectified by
considering all the transactions to e included in the business transactions incurred in the business.
Consistency will be maintained by an entity owner y using this particular method as this will
ascertain the existing efficiency of an entity in order to eliminate all kinds of frauds or errors
incurred in the business. Errors are identified initial will help an entity proprietor in command to
accomplishing the desirable market purpose and mark in order to achieve all targets and
objectives in less period. Role of an entity gets increases by providing wide number of
opportunities by taken into consideration all the facts and figures which are essential for the
business in minimizing its deficiencies and enhancing its overall quality. Now a days bank facing
many issues of fraud and errors but bank have more concern on document verification of the
organization or client and after verification they provide transaction permission for organization
or client because of just improvement of performance working for organization achieve te gaol
and target of production.
b. Measure the reasons due to which bank records conform from cash book:-
Changes may be incurred in the bank reconciliation statement's due to several reasons
that created lost of changes due to different balance show in the cash book and bank pass book of
an entity which needs to be checked properly. The differences arise in both the statements is due
to cheque deposited in the bank but its balance does not credit by the bank. This particular
change incurred in the business will differentiates the overall balance of both bank pass book and
cash balance of cash book of an entity. The cash book balance shows higher than compared to
the balance of bank needs to be adjust properly in order to reconcile both the figure appropriately
in order to enhance the existing performance of an entity (Prabowo and Tambotoh, 2012).
Another differences created in both the book is due to hidden transactions charged by the bank
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such as interest or charge of commissions are not recorded in the cash book of an entity as
business owner are not ware about the expenditures charged by the bank intentionally on their
own. The correct treatment will be made by an entity by believe the true facts and illustration by
comparing both of the statement in order to present the true figures in the business.
Changes may be incurred in the bank verification Statement's due to many reasons tht create loss
of modification due to difference balance shows in the payment book and pass book of entity
which needs to be patterned properly.
c.
Bank reconciliation statements as at 1 December 2016
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Prepare updated cash book
Bank reconciliation statements as at 31st December
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CLIENT 6
A) Prepare sales ledger control account
Purchase ledger control account
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b) Excuse the term bodily function account and needs to prepare activity account
Activity is essential aspects involved in the business under which all kinds of subsidiary
accounts are clubbed in major account known as the control ledger created by an entity which
will included both purchase ledger and sales ledger as the complete performance of an entity will
reflect with the overall facts and figures shown in this particular account. This account is
regarded as one of the important account created by an entity within a give span of time (Ryan,
2012). Bey creating control accounts an entity will ensure the higher productivity of the business
and order to increase its existing market returns in order to showcase its overall skills and the
capabilities in the external business environment. Function of an entity get on flexible with the
transition of period of time as it would help an organization in order of magnitude to achieve
desirable goal and targets in a give span of period of time. Activity account involved all aspects
of business entity for running a successful business in competitive market environment s per the
competitors strategic and find pout the best solution. In other words control on purchase and
sales of product in the market and because this factors affect the whole process of the
organization than organization more focus on the market structure to create good image at
market for future perspective and new customers attraction from exiting market and reduce the
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cost of many expenditure on wastes in the organization. It would helpful for the company In
terms of achieving goal and target in short period of time.
b) Explicate the term control account and needs to prepare control account
b. Creating trial balance
c
D. Differentiating doubt and clearing report
Doubt Account Tract Account
Under this account all the transactions as well
as the entries are not be shown in the journal,
ledger and other books of account is called
Tract account is the one where all the monitory
dealing is recorded in all the books of accounts
and fiscal reports. Moreover, in this all the
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doubt account in the accounting construct
(Bryer, 2013).
written record and belief and taped decently
and guarantee that whether these are the right
and broad or not.
A doubt account is not distinct by the account
director if there some kind of minutes are not
shown and made in the financial statements.
When speaking about the tract account then
until and unless all the transactions like as
report receivables and payables are not distinct
and made then it not prepares.
It not reasoned as the extremely crucial and
important type of the report at the time period
of making all the final accounts and reports.
On the other side, clearing report is regarded as
one of the highly significant report for the
company (Choi, 2013).
CONCLUSION
It can be summarized from the above assignment that accounting is regarded as one f the
important tool that enhances the existing performance of an entity within a give span of time.
This report emphasizes on recording of all kinds of transactions using journal entry till the
preparation of trial balance that will determines all the errors of frauds traced by an individual
while recording all kinds of business transactions in its business enterprise. This report
emphasizes on rectification of errors found by an entity in the given project report. Balance sheet
or income statement will be prepared in dictation to reflect the financial presentation of an entity
in state to target all potential stakeholders who are interested in knowing the actual market status
of the business in order of magnitude to grab high market reward in the outside business
environment.
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REFERENCES
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Carvalho, L. N. and Salotti, B. M., 2012. Adoption of IFRS in Brazil and the consequences to
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Choi, S., 2013. The Linkage Strategies Between Productivity Metrics and Financial Accounting
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