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Financial Accounting Assignment Solved - Munteanu Ltd

   

Added on  2020-10-05

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Financial Accounting

Table of ContentsINTRODUCTION...........................................................................................................................1A.1). Defining Financial accounting and its purposes................................................................12. Identifying the use of the financial information of a company to the internal and stakeholderof an organisation........................................................................................................................2CLIENT 1........................................................................................................................................3Double entry recording for the relevant journals and trail balance 31st January 2019...............3CLIENT 2........................................................................................................................................6A). Statement of profit and loss of Munteanu Ltd, for the year ended 31st Dec 2018...............6B). Statement of financial position of Munteanu Ltd. As at 31st December 2018.....................7C). Explaining the accounting concept of consistency and prudency.........................................7d). Describing the purpose of depreciation in formulating accounting standards.......................8e). Critically evaluating the difference between the financial statement prepared by the soletrader and limited companies......................................................................................................9CLIENT 3......................................................................................................................................10A). Explaining the purpose of bank reconciliation statement and its requirement of preparingevery month...............................................................................................................................10B). Explaining some areas which may cause varies in the bank statement.............................10C). Explaining the term “Imprest” as used in a petty cash book...............................................11D). Update the Burcu Ltd' s cash-book for September 2018 and bank reconciliation statementas at 30 September 2018...........................................................................................................11CLIENT 4......................................................................................................................................12B). Explaining the control account...........................................................................................13CLIENT 5......................................................................................................................................14A). What is suspense account and what are the main features of suspense accounts...............14CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................16

INTRODUCTIONFinancial can be termed as an important field for any organisation. It assists in recordingand summarizing the financial transaction of the company which stimulate the process ofpreparing the financial statements and financial reporting which are essential for the externalusers. The preset report will assist in understanding the different concepts of financial accountingand the purpose of preparing it. Further, the report will highlight the different accountingstatements for the different clients which assist in providing deep insight of the financialaccounting.A.1). Defining Financial accounting and its purposes.It can be termed as a specialised branch of accounting which will assist the company inkeeping track of all the financial transaction of a company. Financial accounting consist of someguidelines which assist the company in recording and keeping the transaction in a particularmanner. Th financial accounting is very essential as it will assist in making the financialstatement or the final accounts of the company (What is Financial Accounting? , 2019).Financial accounting users an established accounting principles that are framed by theaccounting board such as GAAP, IASB and IAS. In other words, it can be said that financialaccounting can be termed as the way of recording and reporting business activity and financialinformation to investors, creditors and other people outside the business organisation which willassist them in taking decisions regarding the financial performance of the business and stimulatetheir decision making process.Financial statement can be prepared in an accounting period which can be quarterly, half-yearly or annually. It can be said this statement are prepared for the external users, thus financialreporting is considered as very essential process of the growth and development of a company.The purpose of the financial statements or the purpose of financial accounting are as follows:One of the main purpose of the financial accounting is to provide information to thecompany's management and the outside users regarding the financial performance of thecompany (Edwards, 2013).Financial accounting helps in preparing the final accounts of the company in the form offinancial statements.1

Financial accounting overall purpose is to create the information to the external users tobase their financial decisions on whether to invest money in the company or not.2. Identifying the use of the financial information of a company to the internal and stakeholder ofan organisation.The stakeholders of the company can be termed as the individuals, group or thecompanies who are interested in organisation's affairs, its business activity and growth. They areone who has some benefit or interest with the company (Weil, Schipper and Francis, 2013). Thisstakeholder van be affected or can affect the business operations and development of anorganisation. In large organisations, there are two types of stakeholders internal and externals.Both the internal and external stakeholders are very essential for an organisation, they are keen toknow the business performance and increasing in profitability (Beatty and Liao, 2014). Financialaccounting and its statements serves as an essential source of information which assist them inorder to know and make the essential decisions.Internals Stakeholders:Internal stakeholders are the individual or group who are directly or financially involvesin the organization. The two main internals' stakeholder in the business entity are theiremployees and board members. They are directly concerns as they are directly connected to thesuccess of the firmEmployees: They are the one who perform and works for the business growth anddevelopment. Financial information will assist them knowing their contribution in the financialperformance. Through this information, they can also get to know their future in the business andwill help in increasing the employee involvement in and understanding of the business.Board members: They are the group of persons who are responsible in making policiesand goals of the company (Edmonds and et.al., 2013). They are the one who makes the strategiesfor the enhancement of the business performance. It can be said that, financial information isvery essential for them in order to access the return off their earning from the firm. Financialinformation will assist them in analysing the profitability, liquidity and cash flow of theorganisation which help in their decision and strategies related process.Eternal Stakeholder:2

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