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Accounting Principles Assignment | Financial Accounting Assignment

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Added on  2020-06-06

Accounting Principles Assignment | Financial Accounting Assignment

   Added on 2020-06-06

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Financial Accounting
Principles
Accounting Principles Assignment | Financial Accounting Assignment_1
TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
A Drafting a report to the line managers in consideration with analysing the accounting
principles and concepts...............................................................................................................1
1. Explaining the financial accounting........................................................................................1
2. Determining several regulations of norms relevant with financial accounting.......................2
3 Analysing the accounting rules, procedure, principles etc.......................................................3
4. Determining the consistency and material disclosure with its conventions and concepts......4
B. Portfolio to carter the various clients and resolving their financial needs.............................4
CLIENT 1........................................................................................................................................4
1 Analysing the journal entries for Alex study...........................................................................4
2 Presenting the double entry recording with the help of various ledger accounts.....................7
3. Analysing the arithmetical accuracy of double entry system with the help of trail balance.17
CLIENT 2......................................................................................................................................18
A income statement for the client Peter Piper as on 31st December 2016...............................18
B Analysing the financial position of Peter Piper as on 31st December 2016.........................19
CLIENT 3......................................................................................................................................21
A. Determining the profit and loss statement for Raintree Ltd as per 30th September 2016...21
B. Determining the financial position of Raintree Ltd as on 30th September 2016.................21
C. Explaining the accounting concepts for Prudence and Consistency....................................22
D. Analysing the depreciation formulation as well as highlighting the functioning of the two
methods of depreciations...........................................................................................................22
CLIENT 4......................................................................................................................................23
1. Presenting the Bank Reconciliation statements at its purpose..............................................23
2. Determining the transaction of Kendal Ltd as in cash book for December 2016.................23
3. Analysing the BRS for December 2016................................................................................23
CLIENT 5......................................................................................................................................24
A. Presenting and balancing various control accounts..............................................................24
B. Explaining the Concept of Control accounts........................................................................25
CLIENT 6......................................................................................................................................25
Accounting Principles Assignment | Financial Accounting Assignment_2
A. Presenting the Suspense account with its main features......................................................25
B. Determining the elements with the help of Trial balance Disclosure..................................26
C. Presenting the Journal entries...............................................................................................26
D. Comparing the Suspense account and Clearing account......................................................26
CONCLUSION..............................................................................................................................27
REFERENCES..............................................................................................................................28
Accounting Principles Assignment | Financial Accounting Assignment_3
INTRODUCTION
To enhance the industrial efficiency and have the fruitful growth in the long run there is
need to have the adequate operational activities in the firm. Therefore, with the help of financial
accounting the disclosure of accounts becomes easy and effective as it can be understand by
every individual in the world and the firm will have domestic as well as international investors.
In the present report there will be discussion based on various principles, terms, conventions and
concepts of accounting principles as well as their usefulness in making the financial disclosure
for the firm. The report will also have solutions to various accounting problems of different
clients and the preparation of various accounts of business such as BRS statement, Profit and loss
statements etc.
A Drafting a report to the line managers in consideration with analysing the accounting
principles and concepts.
To : Line manager
(Small Accountancy Firm)
Subject : Accounting rules, principles, concepts and convections are helpful in terms of
enhancing the efficiency of firm.
Sir,
The implication of the accounting principles while presenting the financial disclosure it
will be fruitful in terms of making the adequate and legal disclosure. Therefore, there has been
various principles, concepts which are presented by IFRS, GAAP and IASB with the motive of
developing the business operations.
1. Explaining the financial accounting
In order to analyse the firm's performance, efficiency, liquidity as well as profitability
the preparation of the financial statements will be helpful in terms of determining the adequate
growth of the firm. These accounts help in analysing the business operations as well as making
the correct operational aspects of the entity (Warren and Jones, 2018). The operation and
functions of the financial accounting can be as per initiating with recording of transactions,
analysing the outcomes and making the operational or investments decision by the stakeholders
of the venture. However, there as been presentation of mainly 4 kinds of financial statements
such a Balance sheet, statement of change in equity, statements of profit and loss and the cash
1
Accounting Principles Assignment | Financial Accounting Assignment_4
flow statements.
Illustration 1: Financial statements
(Source: McCall, 2017)
In context with such statements the investors of other stakeholders of the firm fetch
information and analyse the profitability of firm in terms of meeting the debts and making
payments of the dividends (Fanning and Grant, 2017). Therefore, the disclosure of such
accounts will be helpful in terms of raising the capital funds as well as improving the industrial
operations.
2. Determining several regulations of norms relevant with financial accounting
In accordance with the operations of the business there has been implication of various
principles and concepts while making the financial accounts. Therefore, there are several
institutions, boards and standards who has presented various principles and concepts as to
funnel the accounting professionals while presenting the disclosure of such statements
(Camilleri and Camilleri, 2017). However, in order to analyse the concepts and procedure of
presenting their financial disclosure there are several standards and boards are to be analysed as:
Generally Accepted Accounting Principles:
In accordance with such institution which help in presenting the guidelines relevant with
the accounting disclosure and the record of transaction in the authenticated formate. The
motive of introducing the principles and concepts in the accounting techniques is due to making
the adequate increment in the operational activities as well as strengthening the capital structure
of entity (Tsalavoutas, 2017). There has been presentation of various principles and conventions
which help in brushing the preparation of financial accounts.
2
Accounting Principles Assignment | Financial Accounting Assignment_5
International Financial Reporting Standards:
This is the institution of board which offers has facilitated the standards and framework
under which the financial disclosure is need to be made. It has facilitated the universally
accepted and authenticated framework which will be fruitful in terms of making the adequate
accounting disclosure (Ismail and Sori, 2017). There has been various formate for the
statements like income statement, balance sheet, change in equity and the cash flow statement.
Thus, such techniques and methods of presenting the accounts will be fruitful for making the
adequate enhancement in the capital structure, analysing costs as well as generating the large
numbers of investors to the firm.
International Accounting Standard board:
In terms of presenting the financial statements which are relevant with the operational
transactions held during the period are to be analyse as well as facilitate the adequate
informations (McCall, 2017). Hence, the motive of such accounting standard is that it helps in
facilitating the guidance and information to present the financial disclosure to the accounting
professional in an entity.
3 Analysing the accounting rules, procedure, principles etc.
To determine or execute the favourable industrial operations there is need to make
adequate analysis over the use of various principles while presenting the financial disclosure.
However, there has been various rules and regulations which are being facilitated by the GAAP
in consideration with improving the accounting framework as well as making the adequate
industrial development (Accounting Principles, 2017). However, there are various principles
and concepts of these accounting framework which are to be analysed as:
Cost Principle: In accordance with this concept the accounting professionals make
record of al the transactions held in the premises which are to be measured and analysed and
then fruitful decision to be made in relation with the costs incurred in such transactions.
Time period assumptions: In terms with such rule the financial disclosure must be time
bound and it is to be presented on the periodic basis (Jennergren, 2017). The presentation of
financial reports will be based on the monthly, yearly and daily basis, which in turn facilitate
the informations to the stakeholders and they will make proper investment and operational
3
Accounting Principles Assignment | Financial Accounting Assignment_6
decisions for the firm.
Monetary Unit: All the financial disclosure are to be made in accordance with
facilitating informations to the all the stakeholders such as domestic and international.
Therefore, it is universally accepted that all the amount all to be displayed on the basis of dollar.
It is because in accordance with all the currencies throughout the world Dollar is the strongest
as well as comparative stable currency (Weng and et.al., 2017). Thus, in these regards the
disclosures are based on default currency Dollar.
Full Disclosure: This concept refers to the disclosure of the financial of the firm with
full disclosure of the accounts such as profit and loss statement, financial position, change
equity etc. therefore, such informations which are presented in the statements will be used and
analysed by various internal or external users (Yashin, Trifonov and Koshelev, 2017).
Going Concern Principle: In accordance with initiating the business it is to be assumed
that the business will have the continues operations in the long run (Schipper, Francis and Weil,
2017). Thus, in these regards the firm will be treated as the going concern and will have
continues disclosure of the financial statements.
4. Determining the consistency and material disclosure with its conventions and concepts
Consistency: This concept reflect the fact that all the transactions which are relevant
with any element have their fixed method of analysing and transacting (Gumb and et.al., 2017).
Thus, it can be said that the assets are to be recorded in the balance sheet while income and
expense are to be measure din the income statement.
Material Disclosure: This principle concept lies over the record of all the transactions in
the financial statemented must be relevant with the authenticated sources which consist of the
information from where the transaction incurred (Warren and Jones, 2018). There will be use of
invoices, lists and small books where the record of all the transactions and which describes the
material facts.
From: Junior accountant
4
Accounting Principles Assignment | Financial Accounting Assignment_7
B. Portfolio to carter the various clients and resolving their financial needs.
CLIENT 1
1 Analysing the journal entries for Alex study
S. No. Particulars Debit Credit
1
Purchase A/C DR
To D. Mian A/c
To S. Hood A/c
To W. Tone A/c
To R. Foot a/C
6080
20160
1450
960
1610
2
Storage Exp. A/c DR.
To Bank A/c
400
400
3
F. Lane a/c DR
P. White A/c Dr.
J. Allen A/c Dr.
F. Syme a/c DR.
T. Cole Ac/ Dr.
J. Wilson A/c Dr.
To Sales
770
2420
910
2080
1640
1120
8940
4
Motor Car Exp. Ac/c Dr.
To cash a/c
470
470
7
Drawing a/c dr.
To cash
1500
1500
9
J. Fox a/c DR.
T. Cole a/c dr.
To Sales A/c
1310
680
1990
11
Sales Return A/c Dr.
To F. Syme a/v
To j. Wilsoin a/c
680
410
270
14
Van a/c Dr.
To Abl Motor Ltd A/C
28500
28500
16 Bank A/c Dr. 1330 1400
5
Accounting Principles Assignment | Financial Accounting Assignment_8

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