Financial Accounting: Transactions, Bookkeeping, Trial Balance, Financial Statements

Financial Accounting
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INTRODUCTION
Financial accounting relates to practices or processes for readying financial statements
which a corporation uses to demonstrate its financial status and efficiency to outsiders like
creditors or lenders, investors, clients and suppliers. Simply put, this is specific accounting area
that involves different processes, like recording, efficiently summarizing as well as reporting the
outcomes of fiscal transactions from business processes over specific time-frame (Warren,
Jonick and Schneider, 2020).
The assignment is split in two parts and each of them contains different information. In
order to finish first part, some queries need to be addressed, like the kinds of transactions
involving single entry system as well as double-entry system of book keeping, trial balance as
well as its significance. The second part in such section is focused on making journal entries with
respect to each transaction, the Ledgers and a Trial Balance. The distinction between the
financial statement vs the financial report, the basic principles of the accounting and statement of
income are also key part of this portion. Section 2 is focused on preparing bank reconciliation
report, journal entries, multiple control account and many other dimensions.
SCENARIO 1
Question 1
Forms of business transaction
Business transactions are financial events that have taken place within a commercial entity that
could be specific in financial terms. Business transactions have monetary or direct effect on the
client. There are many types of business financial transaction, almost all of which are categorized
into inner versus external transactions. These are listed as follows:
Internal business transactions: The participation of outer parties isn't always allowed in such a
transaction (B Romney, 2018). These transactions have a clear effect on financial performance
of corporation, as they do not demand that value be passed to third party companies. For
example: internal investments entail monitoring deterioration of the fixed assets as well as loss of
property due to fire or robbery etc.
 External business transactions: Among these transactions, the company shall exchange
cash with third parties. These are modest dealings that are passed out by the company on
a regular basis. For instance: outer dealings involve selling of products to consumers,
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acquisition of products from manufacturers, payments of utilities or water charges,
payment of wages to staff, etc.
Single entry and double entry book keeping
Holding a single-entry book is referred to as a simple and cohesive form of accounting.
Under which as well as every financial transaction is reported at the same period as single entry
within journal. Single entry system of bookkeeping is a cash-based accounting methodology that
records all incoming and outgoing cash in journal.
Double-entry bookkeeping system is yet another mechanism or procedure for recording
commercial transactions wherein, for every deal, entry is noted in at minimum 2 accounts that
are credited or debited accounts (Duska, Duska and Kury, 2018). Through this process, the
number of recorded capital as debits would be equivalent to the total of recorded capital as
credits. This appropriate strategies according to the bookkeeping method, for example, assets =
liabilities + capital of the proprietor. It is shown as follows:
Trial balance and its importance
It may be incorporated as accounting or booking statement, that shall include the balance
sheets in each of the general ledger balances or accounts of the company. Debit balance sums are
placed in column with the correct headed 'Debit balances' while credit balance sums are placed in
an alternate column with same headed 'Credit balances.' Number or figures of both of these two
columns should be the same. There is great deal of value and meaning to Trial Balance which
supports a company in business transactions. Below role of this are mentioned in such manner
that are as:
 It is a crucial method as it permits the organization to test the mathematical consistency
of all its accounts' balance by making sure that the balance of track is comparable on each
side.
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 It shows credits and debits balance of the company transactions. If balance of debit does
not align the balance of the credits, it implies that there are several mistakes in the
accounting record (Schroeder, Clark and Cathey, 2019). As a result, trail balance allows
an entity to locate errors.
Trail balance lets the organization manage the final statements. This keeps a database of balance
of accounts that allows a company to file a finished report. The ending accounts will be drawn up
at the ending of financial year by realizing the financial situation, the operational results and
actual performance of entity.
Question 2.
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Ledger accounts
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