Financial Accounting Principles

Financial Accounting
Principles

Contents
INTRODUCTION...........................................................................................................................3
TASK...............................................................................................................................................3
PART A..................................................................................................................................3
PART B..................................................................................................................................6
Client 1...................................................................................................................................6
Client 2.................................................................................................................................15
Client 3.................................................................................................................................19
Client 4.................................................................................................................................20
Client 5.................................................................................................................................22
CONCLUSION..............................................................................................................................23
REFERENCES..............................................................................................................................24

INTRODUCTION
Financial accounting is a sector wherein financial data within financial reports are collected,
analysed and presented (Ebaid, 2016). The financial status of businesses can be seen by
customers and stakeholders in this reporting phase. Along with this financial accounting, the
work of all company operations in respect of profit or loss has a critical part to play. Essentially,
it includes several forms of accounting records and accounts such as P&L book, balance sheet,
revenue tax etc. This business offers small-scale accounting large variety of services. In addition,
in the project report, role of companies is best described in the phrase financial accounting. In
order to determine their value in the financial details, both various stakeholders are listed.
Similar activities are performed by five clients in perhaps a section of the survey.
TASK
PART A
1. Financial accounting with its main purpose for company.
In general terms, the phrase "financial statements" applies to the collection of financial
details in the context of financial reporting to diverse stakeholders (Nilsson and Stockenstrand
2015). This accounting is primarily designed to awaken corporations to produce shift in business
time over the course. Eventually, the annual statements shall be reported towards the close of the
fiscal cycle of the statutory reports. There will be several forms of difficulties in the lack of this
accounting method. Unlike other owners, the shareholder in the business would have little
impact. Moreover, the companies would have trouble understanding their current financial
position. Internal manager file different kinds of financial reports including a P&L report and the
balance sheet respectively within the consulting company. In addition, they provide complete
financial reports and make decisions based of that factors which impact business conditions.
In this respect, it is crucial to be aware of the financial accountability standards and rules.
This is how the annual results are found null in the lack of these reporting requirements. GAAP
is understood as the common accounting concept as the most basic characteristic of financial
performance. The accounts and analyses are defined under certain standards of financial
reporting. Below are listed other uses of financial accounting:
 Advantageous in calculating cash flow: Financial reports aid to reliably predict working
capital on the impact of accounting reports. It is important because businesses will

determine the operation that produces further cash and what is not, according to benefit
and loss report statistics. This allows the cash balance to be expected.
 Assistance to taxes decision-making: Financial management for companies is also
effective when getting tax judgments (Burritt and Schaltegger 2014). That is why firms
can calculate a total tax payable on earnings with both the assistance of income
declarations.
 Provide a basis for plans: In addition to the financial statements, successful and
strategic tactics are created. In the end, businesses will define means of generating
appropriate policies and proposals dependent on sales and investment.
 Provide accurate information: It is observed that financial information for about their
numerous functions and processes can be provided by revenue recognition firms. It is
therefore connected all in all to the quantification of the real financial position.
 Helpful in decision-making: Financial accounting is indeed helpful in making
appropriate decision, in addition to the above advantages for each sort of organisation.
For e.g. if the financial position of some business becomes stronger, they may plan to
grow the business. Therefore, for judgments, the financial statements are important.
 Good for the groups concerned: The banking structure is beneficial for all internally
and externally players. Efficient policies and approaches may be drawn up based on
financial reports by the internal customers. The financial position is understood and
commitment rendered appropriately, as will other stakeholders.
 Comparison benefit: It is among the most significant aspects of financial statements
as companies can monitor and correlate their previous accounts with their overall results
in the present accounting year with the support of financial system.
From the above all discussion, it has been stated that considerable usage in financial
statements is often related to as bookkeeping for reporting corporate transactions. The
accounting statements are used by company managers to list economic operations in the
corporate folders. Because each financial exchange involves a double entry scheme, two
accounts have an effect that reveals all sides of an exchange. For example, if the small
businessman is purchasing houses, a bank card to the real estate account is recorded to display
the value of the property receipt and then a cash-credit to demonstrate cash output. Financial
accounting may help owners to remind internal customers such as their staff of the successes and

limitations of the business. This detail may be utilized by organizations that include their
workers with income sharing or stock-based incentive schemes. For limited public firms, the
company's share price is a common indicator. In order to share the amount, and to promote
employee efficiency, small companies should balance their incentives and salary rates if
appropriate. These are the primary aims of financial accounting, because of this, are the
organizations' compulsory accounting systems.
2. Types of internal and external stakeholders.
Stakeholders: It is a collective of people involved in all company practices (McCarthy,
Shelmon and Mattie, 2012). Many stakeholders are concerned with earning income. The
stakeholders are usually categorized into two kinds:
• Internal interested parties
• External stakeholders
For enterprises, all of the shareholders are relevant since they have an involvement in market
practices. The following are listed and their specific meanings are elaborated underneath:
Internal interested parties: Local partners engage in regular market operations and learn about
the priorities. Such shareholders can be influenced by client strategies and policies. A few typical
examples involve staff, BOD (Director's Board), administrators, etc. The following parties are
listed in a specific sense: In this connection:
• Board of Directors: The BOD is a community of individuals who are obsessed about
laws and regulations are mindful that such laws are inferred within company process.
They are generally known as divisions at the upper level which make most of the crucial
decision within company. They demonstrate a role in the business's financial data, even
though they develop additional policies and tactics on this basis.
• Employees: These are seen as people or groups who carry out different activities and
tasks in order to get their salaries or salaries. Finally, workers play a significant part in
the organization's commitment to income. To the effect, they express a concern in the
financial state of the organization and assess if it has ample funds left to pay the
employees.
External stakeholders: These are individuals that are not involved in commercial practices but
have interest in each transaction. These parties' main aim is to put money the finance in the

company with the assumption that they will receive the return. Consumers, suppliers, creditors
etc. are a prominent example. The following are the following stakeholders:
• The Supplier: Depending on their financial state, they render the payment exchange with
businesses. This is to suggest, manufacturers offer the requisite content on credit for
goodwill to businesses. In theory, for the cash contract the vendors demonstrate concern
in the company's financial position.
• Investor: These are the number of people that buy shares their financial resources in the
exchange share of organizations. They assess the financial condition of businesses before
allowing even expenditure. To them, however, financial knowledge is very helpful in
predicting potential returns on their savings.
• Creditors: The investors are those that demand another party's assets (Blake, 2013). In
other terms, the individual about whom income owes may be identified. Finally, in order
to decide whether or not to offer financial support with some individual business, they
show their concern in the firm’s financial position.
• Government: This is the last player to differentiate from the others. They contribute to
the creation of regulations, statutes and laws that are important for businesses to obey.
Both government and organizations receive the tax that enables them to run the specific
activities for the growth of nation or firm operation.
These are also the external customers of firms that demonstrate their own involvement in
businesses task and function in order to earn a subsequent amount over the investment.
PART B
Client 1.
(I) Double entry with ledgers:
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