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Financial Accounting Principles Assignment Solution

   

Added on  2020-10-05

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Financial AccountingPrinciples

Table of ContentsINTRODUCTION...........................................................................................................................1BUSINESS REPORT ...................................................................................................................1(a) Financial Accounting & its purposes.....................................................................................1(b) Internal and external stakeholders..........................................................................................2CLIENT 1........................................................................................................................................31. Journal Entries & Ledger in the book of Alexandra Study......................................................32. Trial Balance as on 31/01/2019 in the books of Alexandra Study........................................11CLIENT 2......................................................................................................................................133. Consistency & Prudency........................................................................................................154. Purpose of depreciation in formulating accounting Statement..............................................16CLIENT 3......................................................................................................................................171. Purpose of BRS......................................................................................................................172. Difference among balance of bank column of cash book & bank statements.......................173. Imprest...................................................................................................................................174. BRS as on 30/09/ 2018..........................................................................................................18CLIENT 4......................................................................................................................................181. Sales Ledger Control Account ..............................................................................................182. Purchase Ledger Control a/c .................................................................................................193. Control Account.....................................................................................................................19CLIENT 5......................................................................................................................................201. Suspense A/C & its main features ........................................................................................202. Trial Balance..........................................................................................................................203. Journal Entries.......................................................................................................................20CONCLUSION..............................................................................................................................21REFERENCES..............................................................................................................................22

INTRODUCTIONFinancial accounting is the field of accounting concerned with the summary, analysis &reporting of financial transactions pertaining to a business. All corporations have to preparefinancial statements for a specific period of time and financial reports have present in front ofstakeholders. It is helpful for the organisation to take effective decisions regarding investment aswell as expansion. Financial statements shows the financial position of the corporation. To betterunderstand this concept Airdri Limited has been selected which deals in electronic componentsand it belongs to United Kingdom. In this report, there are following topics are covered such as:financial accounting & its purposes, analysis of internal and external stakeholders, trail balance ,balance sheet, final accounts for sole traders, accounting concepts related to consistency &prudency. Apart from this it also discuss about purposes of preparing bank reconciliationstatements and sales & purchase control ledger. BUSINESS REPORT (a) Financial Accounting & its purposesAll companies have to prepare final books of accounts during a financial year so that itcan know the financial position of the business. Financial accounting involves recording,summarizing, analysing and classifying the transactions which are recorded in the books ofaccounts of organisation. The Junior accountant helps to manage financial records of AirdriLimited so that true and fair information can be provided which provide help to take importantdecisions for the benefit of corporation. It involves income statement, balance sheet and cashflow statement. This financial report are the part of formal report & provided to the internal aswell as external stakeholders of the company. An accountant have to follow different rules,regulations, principles and policies which are related to financial accounting. The main purposeof preparing financial statements are describe below: To provide important financial information to various parties such as: creditors,investors, taxation authorities and government (Pongoh, 2013).It provide useful financial information to the company which help to take investment aswell as expansion decisions for the growth of company. Organisation can know its true financial position during a specified period of timeperiod. 1

Ledger books of accounts classify the information and data as per its nature where ascash & credit transactions has shown separately. Financial statement shows the financial position of company which attract the investorsto invest in the projects of organisation. So there are various purposes to prepare financial statements of the corporation and it isnecessary for the organisation to prepare it in every financial year. (b) Internal and external stakeholdersStakeholders can be an individual, group or corporation that has concern or interest in thecompany. They can affect or to be affected by the actions or policies of the organisation. Thereare two types of stakeholder which are internal and external stakeholder. Internal stakeholdersinvolves owners & shareholders, workers etc. Where as external stakeholders involves suppliers,government, investors, consumers etc. The business decisions of a company can impact thestakeholders and its investment decision. It is beneficial for the Airdri Limited to take effectivefinancial decisions which attract the stakeholders to invest in the organisation as a resultmaximum funds can be generated by the corporation. Classification of different types ofstakeholders are describe as below: Internal stakeholders: Owners & Shareholders: These persons are those which can influence by the financialdecisions of company. Owners & shareholders are those persons who invest their funds in thecompany in the form of investment and organisation use their funds in the expansion project sothat business of corporation can grow and generate higher returns. As a result company can earnmaximum profits. Before taking investment decisions they look financial position and on thebasis of it they take investment decisions (Pongoh, 2013).Employees: These are those persons who work for the company and perform their rolesand responsibilities as per the need of organisation so that it can achieve its objectives and goals.They are directly related with the corporation and its performance and if financial position ofcompany is good than there are more chances that salaries and wages of workers get increase.Airdri Limited has effective employees who perform to meet the objectives and targets ofcorporation and contribute in its growth. External stakeholders: There are different types of stakeholders which are describe asbelow: 2

Government : The government has plays the role of stakeholders because it collect thetaxes on the income which is earn by organisation. It also invest in the business of corporation togenerate more returns. There are various rules, regulations and compliances have to be followedby the company which imposed by the government authorities. Suppliers: These are those persons who supply the raw material to the organisation sothat it can manufacture the products for the final purpose of sale. The suppliers of Airdri Limitedhas provide quality raw material at reasonable price so that company can produce qualityproducts and satisfy the needs of consumers. Corporation also give payment time to time as perthe quantity and cost of material. Consumers: These are those persons who purchase the products and services ofcompany on the basis of consideration. It is the responsibility of organisation to satisfy the needsof consumers and Airdri Limited has provide quality products at reasonable price so that demandof customers can be fulfilled. A corporation can grow and get success when it satisfy the desiresof consumers (Mande and Ammani, 2013).Investors : These are those persons who invest in the business of organisation for thepurpose to generate maximum returns. For a company it is necessary to make action plan whichattract the investors to invest in the project of corporation. It is beneficial for the Airdri Limitedto collect huge funds from them and expand its business for the purpose to earn higher profits.Before taking investment decisions they look financial position and on the basis of it they takeinvestment decisions. Creditors: These are those persons who provide money to the company andorganisation have to give interest to the creditors. It involves banks, bondholders, suppliers etc. Ifcorporation have shortage of funds than it borrow money from the creditors and pay time to timeinterest to them. Creditors take the information form the financial statements of organisation andon the basis of it they take decision that how munch money they have to lend to the company. CLIENT 11. Journal Entries & Ledger in the book of Alexandra StudySALES DAY BOOKDATEParticulars £3

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