Financial Accounting: Types of Transactions, Trial Balance, Financial Statements, and Principles

Accounting

Table of Contents
Introduction......................................................................................................................................3
Task 1...............................................................................................................................................3
1.Types of business transaction including single entry double entry bookkeeping and trial
balance.........................................................................................................................................3
2 Transactions..............................................................................................................................4
3. Difference between financial statement and financial report...................................................6
4. Fundamental principles of accounting.....................................................................................6
5. Income statement.....................................................................................................................7
6. Trading account........................................................................................................................9
7. Cash flow statement...............................................................................................................11
Scenario 2.......................................................................................................................................12
Bank reconciliation....................................................................................................................12
Requirement of reconciliation....................................................................................................12
Control accounts........................................................................................................................12
Role of control account in financial management......................................................................13
Suspense account.......................................................................................................................13
Reason for drafting suspense account........................................................................................13
4. Cash account..........................................................................................................................13
5. a. Journal entries....................................................................................................................14
Conclusion.....................................................................................................................................15
References......................................................................................................................................16

Introduction
This entire report is based on financial accounting. Financial accounting refers to the process of
summarising analysing and reporting all the transactions of Business and its operations for a
given time duration (Abdusalomova 2019). All these transactions are analysed in financial
statements like balance sheet profit and loss account trading account cash flow statement and
income statement which helps the company to know operating performance of the business. This
report includes various types of business transactions with States about single entry and double
entry bookkeeping. Apart from this various differences between financial statement and financial
report is also elaborated in this report. This report focuses on providing principles of financial
accounting and bank reconciliation for companies. This report also talks about various suspense
account and general entries as well.
Task 1
1.Types of business transaction including single entry double entry bookkeeping and trial balance
The entire organisation with that it is a small medium or large they have to maintain business
transactions. Following are the important transactions of the business such as
Purchase of goods
Goods are very important part of any organisation because with the help of goods which are high
in quality organisation can increase their profitability and sales. So purchasing of goods can be
done and two categories first are cash and another is credit. Cash purchase is read in the business
because most of the business does not prefer to buy goods with the help of cash. The main
purchase goods in instruments and from other ways on the other hand credit purchase is very
difficult for the business therefore did not frequently credit purchase.
Purchasing of services
Services also play a critical role in the business services include different type of advertisement
printing cost equipment repairing raising Finance salary and wages etc (Akiyama, 2020). These
are the common services which business needs to invest and have to purchase the same.
Single entry bookkeeping
This is one of the simplest and normal methods of bookkeeping with many organisation follows.
This method of bookkeeping is based on cash method in which incoming and outgoing of the

cash so that company can know how much they are they are earning and how much they are
spending.
Double entry bookkeeping
This is one of the methods to record all the transactions of business it doesn't matter that the
transaction is small or big but it is important to record. Is the name suggest double entry
bookkeeping in this two accounts entries are recorded when is debit side and other is. As per this
method amount which is being placed on the debit side should match to the credit side then the
entry will known as correct.
2 Transactions
S. no Particular Amount
01/06/2016 Cash a/c Dr
To business a/c
65000
65000
02/06/2016 Purchase a/c Dr
To accounts payable
80000
8000
07/06/2016 Cash a/c Dr
To inventory a/c
4000
4000
08/06/2016 Purchase a/c Dr
To bank a/c
4000
4000
14/06/2016 Insurance premium a/c Dr
To bank a/c
75
75
15/06/2016 Purchase a/c Dr
To accounts payable
10,000
10,000
16/06/2016 Purchase a/c Dr 3000