Financial Accounting Principles

This document discusses the fundamental principles of accounting including monetary assumption, going concern assumption, cost principle, conservatism principle, and accrual basis of accounting. It emphasizes the importance of these principles in proper accounting practices. The document also includes examples and references for further reading.

Financial accounting principles
1.

The principles of accounting which are fundamental are important for accounting purposes
are monetary assumption, going concern assumption, cost principle, conservatism principle,
and accrual basis of accounting. (Edmond and Thomas 221) .These are the important
principles which are necessary to do proper accounting. Without these principles accounting
is impossible. Every accountant has to follow these assumptions so that they can do proper
accounting. Each and very assumption are important for every accountant do render proper
services to their client. (Lau and Lim 143)
1. BAD DEBTS ACCOUNTS
Date Particulars JF Amount Date Particulars JF Amount
To
Allowances
for
Doubtful
debts
45000 By Profit
and loss
account
45000
Total 45000 Total 45000
Profit and Loss Account DR 45000
Bad debt Account CR 45000

Allowances for doubtful accounts
Date Particulars JF Amount Date Particulars JF Amount
To Account
Receivables
To Account
Receivables
15000
30000
By Bad
Debts
45000
Total 45000 45000
Accounts Receivables Account
Date Particulars JF Amount Date Particulars JF Amount
By
Balance
c/d
90000
By Bad
Debts
By
Allowances
for
Doubtful
Debts
By
Allowances
For
Doubtful
Debts
45000
15000
30000
Total 90000 90000
Assets Amount Liabilities Amount
Accounts Receivables balances 90000 unearned revenues 38000
Equipment balances 2000 salaries payable 570
Supplies expenses balances 400 Rent payable 430
Notes payable 35800
Accumulated depreciation - 20000
Cash balance 35800 owners’ equity (Balance amount) 33400
33800

TOTAL Balances of Assets 108200 TOTAL Balances of liabilities 108200
2. ACCOUNT RECEIVABLES AGEING
Debtors Total
Receivables
Amount
Current
balances
1-30 days 31-
60days
61-90
days
Mohamed
Sarah
4000
4000
4000 -
-
-
4000
-
-
Total 8000
3.
DR Cash account CR
Date Particulars J.F Amount Date Particulars J.F Amount
April 16
May
20
To
Balance
C/D
To Account
Receivables
To Account
Receivables
3920
4000
200
April 5
April 16
May
20
By freight
outward
By
Account
Payable
By
Account
payable
200
3920
4000
Total 8120 820
DR Inventory Account CR
Date particulars JF Amount Date Particulars JF Amount
April 5
April 5
April 8
To Account
Payable
To Cash
4000
200
April 5
April 8
By Cost Of
goods Sold
By Account
Payables
2250
1000

April 16
To Cost of
Goods Sod
To Account
payables
560
80
By balance
c/d
1590
Total 4840 Total 4840
Account Receivables Account
Date Particulars JF Amount Date Particulars JF Amount
April 5
TOTAL
To Sales
To
Balance
C/D
4000
5080
9080
April 8
April 16
April 16
May 20
By Sales
Return and
Allowance
s
By Cash
By
discount
allowed
By Cash
TOTAL
1000
4000
80
4000
9080
Account Payables

Date Particulars JF Amount Date Particulars JF Amount
April 8
April 16
April 16
May 20
TOTAL
To
Inventory
To
Inventory
To cash
To Cash
To
Balance
c/d
1000
80
3920
4000
80
13080
April 5 By
Account
Payables
TOTAL
4000
13080

References
Edmonds, Thomas P., et al. Fundamental financial accounting concepts. New York, NY:
McGraw-Hill Irwin, 2013: 221-295. Print
Lau, Y. W., and S. Y. Lim. "Accounting undergraduates’ learning approaches: Case of a
Malaysian public university." Pertanika J. Soc. Sci and Hum 25 (2015): 143-154. Print